Adolph J. Yates Jr., MD, FAAOS
Published 9/8/2025
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Robert M. Orfaly, MD, MBA, FAAOS
The transition to a value-based healthcare system has come with several recent changes in the way orthopaedic care is reported to the Centers for Medicare & Medicaid Services (CMS). For example, the Transforming Episode Accountability Model (TEAM), launching in 2026, is set to expand on previous bundled payment models. The Merit-Based Incentive Payment System (MIPS) Value Pathways (MVPs) are new performance-based reporting systems that have grown out of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. Additionally, mandatory reporting for patient-reported outcome measures (PROMs) in total joint arthroplasty will begin to impact hospital reimbursement in the coming years.
For orthopaedic surgeons, it can be a significant burden to keep up to date and fulfill these new reporting requirements. AAOS Now Editor-in-Chief Robert M. Orfaly, MD, MBA, FAAOS, sat down with Adolph J. (Chick) Yates Jr., MD, FAAOS, to discuss what these requirements entail, how they will impact orthopaedic practice, and how surgeons can best adapt to make sure they are meeting all reporting requirements. Dr. Yates is a professor and vice chair for quality at the University of Pittsburgh, as well as chair of the AAOS Board of Specialty Societies. He is an expert in payment policy and quality improvement.
Dr. Orfaly: Most orthopaedic surgeons are aware of the increased reporting requirements, and many are feeling the acute challenges regarding the mechanics and unfunded costs of implementing the informatics required by CMS. Why don’t we begin with a level set — reviewing these mandates and the informatics requirements for compliance?
Dr. Yates: The three of them are going to impact orthopaedics in different directions. TEAM is going to impact hospitals, and the surgeons will be pulled in.
We’re not allowed to be conveners of risk within the bundles. We will be allowed to partner with the hospitals, but the hospital itself will be the convener of risk. It’s going to be a challenge because CMS has purposely decided not to go back to those hospitals that have already been through the Comprehensive Care for Joint Replacement (CJR) bundle; the TEAM episode will be smaller and focused on more rural hospitals, based on community service areas.
Another level of impact is the MACRA conversion to MVP — that is going to be very surgeon-specific. It will be a reporting burden on the offices and practices of all surgeons, particularly those for whom an MVP has been developed. Currently, that’s voluntary, but it’s clear that CMS intends to move on from the traditional MIPS scoring system for quality to the new MVP process.
When that happens, CMS will focus on the performance of, as an example, arthroplasty surgeons via the lower-extremity joint replacement MVP. To separate the surgeons from common tax IDs, CMS can utilize national physician identifying numbers. It will require reporting on specific performance measures for the practices and individual surgeons, which will require time and effort.
The third new reporting burden is the hospital-centered, CMS-required collection of PROMs; this applies to total joints only at this time, specifically the Hip Dysfunction and Osteoarthritis Outcome Score for Joint Replacement (HOOS JR) and Knee Injury and Osteoarthritis Outcome Score for Joint Replacement (KOOS JR).
This measure is, again, required to capture hospital-wide performance. In the process of collecting pre- and postoperative PROMs, however, hospitals will require assistance from the surgeons and their offices. There is a cost associated with surgeon and staff time and effort for data collection and reporting, and this is not compensated.
That puts a lot of weight on your shoulders to make sure that you fulfill the requirements that can impact the entire system.
The fact is that it’s required. The Patient-Reported Outcome-Based Performance Measure (PRO-PM) is being applied to the CMS hospital star rating system. The star ratings will be based on a stratification of scores, based on the percentage of patients who reach a substantial clinical benefit — defined as a change of 22 points in the HOOS JR and 20 in the KOOS JR. In the dry runs of the measure development, the average percentage of patients who reached those thresholds was in the low 60% range.
It is a bit of a game-changer in terms of being able to distinguish high performance versus low performance, since it lacks the low ceiling associated with the minimal clinical difference. As such, there will be competition around the scores. Right now, it’s for quality reporting, but it has been discussed as eventually being applied to the value-based purchasing program, which implies financial consequences. Currently, the cost risk to the hospital arises from a requirement to reach a 50% reporting rate for both pre- and postoperative PROMs. Failure to do so can cost a hospital 25% of its Medicare upgrade payment starting in 2028, which can equal millions of dollars depending on the size of your hospital. Hospitals will therefore be adamant that the surgeons help.
The current requirements, as they now stand, are limited to patients treated as inpatients, but that could change. It also can increase the stakes if you have less than full reporting, since a center that aggressively facilitates outpatient joint replacement will have a smaller number of inpatients. Each one missed is going to produce an outsized effect on your percentages.
What you’re referring to is the potential for a statistical prison of small numbers. Part of the problem is that, as soon as total knee came off the inpatient-only list seven years ago, consultants told hospitals to bill them all as outpatients because they were afraid they wouldn’t meet the suddenly applicable “two-midnight rule.”
I think it’s inevitable that CMS will transition to include the outpatient billing data, as well as the Diagnosis-Related Group (DRG) inpatient billings. I think that’s something everybody should just count on, because they want to capture the totality of arthroplasty and the Medicare fee-for-service (FFS) population.
Each practice is likely adapting to its specific local realities, but how do you expect health systems and individual surgeons to respond to these mandates?
You could take that question in several different directions. Much of this has to do with the milieu that the surgeon is working within. It’s a different game for a practice with three or four surgeons versus a practice that might have 100 surgeons. It is totally different if you’re in a multispecialty group.
It’s another thing altogether if you’re in a hospital-employed position, with an increasing likelihood of coupled economies of scale. When you’re in a large group, you have the advantage of being able to disperse the cost of increasing your digital footprint and ability to capture and report required data. There will be utilization of consultants and outside vendors, as has become very prominent during the CJR bundle, since some practices couldn’t handle interpreting their data and looking at where they were in terms of winning or losing on costs and quality. I believe that you’re going to see a diversity of responses in that regard.
What are the potential opportunities to improve patient care with these initiatives?
Starting with bundled care, I can speak from experience at my institution that, to a large degree, we had already gone through a lot of the preparatory work through a very intense look at our preoperative and perioperative pathways. We formed multispecialty subcommittees to improve our patient education, patient preoperative optimization, and many other elements, so that we would be competitive on quality as well as cost.
Competition with other providers is something I have a problem with. I don’t know why CMS makes us fight each other. Nonetheless, coming from a large system, we were able to demonstrate that our consistency, standardization, and preoperative optimization efforts caused quality improvements.
We decided from the outset that our bundled efforts would not just be applied to Medicare FFS patients. We applied them to all our patients, with quality improvements for all. I do not advise applying cost and quality efforts to just the involved FFS Medicare population. It may look like it’s less expensive to do that at the onset, but if you’re going to compete on cost and quality, apply everything that you’re doing across all your patients so that all are lifted by the same tide.
In addition to improving the quality of outcomes, we were able to show decreases in length of stay. Our quality went up and our costs went down during the CJR. This will be harder for some of the smaller centers in TEAM that have no prior experience with bundled care.
Due to the MVP conversion, there will be more detailed, procedure-specific outcomes and patient-reported metrics. There will be more detailed improvement activities that are different from just picking the six easy-to-get-to ceilings of MIPS metrics. With those changes, surgeons will have a new advantage of better feedback on how patients are doing, leading to actionable information to adjust practice.
I’m concerned that the focus on smaller groups will make it harder for the quality to shine through, but it can be done.
The last of the new mandates is the PRO-PM. If you’re not seeing a significant difference in your outcomes with HOOS JR and KOOS JR, it may be an eye-opener, causing introspection regarding surgeon-specific processes. If you are showing an improvement, it only incentivizes you to continue with what you’re doing, and it gives you positive feedback.
That’s how it’s supposed to work — the measures should benefit patients. The carrot at the end of the stick is that, within the MVP process, you will still be part of MACRA and competing for 9% up and 9% down risk. In terms of CMS reimbursement, within TEAM, you’re looking at payouts for being successful in costs against other regional competitors versus having to make an extra payment. And within the PROM reporting, the hospital will be at risk for their Medicare upgrade if they fail to submit the reports.
Are there any other threats that you have to think about as you guide your institution through this process?
Aside from the monetary incentives, there’s the fact that we’re in an increasingly transparent world. The quality of your outcomes becomes a driver for patient satisfaction and patients seeking out your services. Likewise, aside from the cost, there’s reputation for the individual surgeons, as opposed to the hospital.
Many of these processes are unfortunately dependent on significant investments in human capital, as well as digital or electronic outlays. It’s going to be tough, given less reimbursement. Unreimbursed medical inflation is harder to justify from CMS, given the additional mandate requirements.
To summarize, what are the best practices to help meet the challenges of these requirements?
You want to protocolize the data-collection process. You need to make sure that it’s embedded into your scheduling and follow-up, so that you can capture all these important reporting outcomes and everything else that’s required.
Some of that can be done through smart phrases and options within various electronic medical records (EMRs). It’s a different topic, but I’ve developed a smart phrase for shared decision-making at our institution that gets captured in the reporting area of our EMR, where it can then be collated and offloaded. Demonstrating use of shared decision-making is one of the lower extremity MVP reporting options.
If you don’t know that you’re missing a lot of these requirements, it will be hard to catch up at the end of the reporting year. Ideally, your reporting cycle is frequent, with monthly reports to ensure your group within a hospital system is on track to meet the requirements.
Keep in mind that the new TEAM will apply to spine fusions as well as hip fractures. Many will have no idea what’s going to hit them, but at least for joint replacement, there are lots of us who have been through it. Others in the orthopaedic community have approached us to talk about benchmarking.
Reaching out to centers that went through the CJR bundle and asking how they did it is cheap and very valuable. We’re more than happy to take questions.
It can be an eye-opener to learn where your costs are. In the CJR bundle, the most important cost that we found was the post-acute care. Everybody gets the same DRG, which is a black box. If the patient doesn’t go home, and instead goes to a skilled nursing facility or, even more expensive, an inpatient rehab facility, it costs tens of thousands of dollars per patient. We were able to reduce that and get more people home, with equal safety and outcomes, and reduced costs. Embedding things into protocols and learning how to make the EMR work for you rather than against you are critical.
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Robert M. Orfaly, MD, MBA, FAAOS, is a professor in the Department of Orthopaedics and Rehabilitation at Oregon Health and Science University. He is also the editor-in-chief of AAOS Now and chair of the AAOS Now Editorial Board.