Total Knee Arthroplasty Final Rule 2017 FAQs

Q:  Has TKA been removed from the IPO?

A:  Yes, CMS finalized the removal of the TKA procedure described by CPT code 27447 from the IPO list beginning CY 2018. The TKA procedure will be assigned to comprehensive APC C-APC 5115 (Level 5 Musculoskeletal Procedures) with status indicator “J1” (hospital Part B services paid through a C-APC).

Q:  When does this go into effect?

A:  January 01, 2018

Q:  Does the removal of TKA from the IPO eliminate the ability to perform TKA as an inpatient procedure? 

A:Absolutely not.  In fact, Medicare explicitly stated that they still expect most TKAs to be performed on an inpatient basis. There is a small subset of patients that could appropriately receive outpatient TKAs. It is for this minority of patients that Medicare is removing the requirement of inpatient surgery.

Q:  How will this change affect reimbursement?

A:  The IPO list status of a procedure has no effect on the MPFS (Medicare Physician Fee Schedule) professional payment for the procedure.

Q:  How will the removal of TKA from the IPO impact the BPCI and CJR models?

A:  CMS does not anticipate a substantial impact on the patient-mix for the BPCI and CJR models because it does not expect a significant volume of TKA cases to move from the hospital inpatient setting.

Q:  Will CMS create guidelines or protocols for patient selection?

A:  While CMS believes that some less medically complex TKA cases could be appropriately and safely performed on an outpatient basis, they do not expect to create or endorse specific guidelines or content for the establishment of providers’ patient selection protocols. CMS acknowledges the importance of deferring to patients and providers to decide the appropriate site of service for a particular patient.

Q:  Will TKA be subject to RAC audits?

A:   The RAC will not begin to audit these cases for site of service until 2020 and it will not be retroactive.  The delay in RAC for a period of two years will allow providers sufficient time to gain experience with performing these procedures in the outpatient setting.

Q:  Will the “2-midnight” rule continue to be in effect?

A:  The “2-midnight” rule continues to be in effect and was established to provide guidance on when an inpatient admission would be appropriate for payment under Medicare Part A (inpatient hospital services). 


Q:  How will this affect patient’s ability to go into a skilled nursing facility for rehab?

A:  There have been no changes to policies regarding skilled nursing facility (SNF) coverage.  A prior inpatient hospital stay of at least three consecutive days is required by law under Medicare FFS as a prerequisite for SNF. However, Medicare Advantage plans may elect, to provide SNF coverage without imposing the SNF three-day qualifying stay requirement and CMS has issued conditional waivers of the three-day qualifying stay requirement as necessary to carry out the Medicare Shared Savings Program and to test certain Innovation Center payment models, including the Next Generation ACO Model.

Q:  Are there other procedures that are being considered for removal from the IPO?

A:  CMS plans to remove additional procedures from the IPO in future years.  Moreover, there is interest in procedures appropriate for addition to the Ambulatory Surgery Center (ASC)-approved procedure list.  CMS stated it will consider the following arthroplasty procedures to be both removed from the IPO and added to the ASC in future rules.

  • Total hip arthroplasty (CPT Code 27130)
  • Hip hemiarthroplasty (CPT Code 27125)
  • Total shoulder arthroplasty (CPT Code 23472)
  • Shoulder hemiarthroplasty (CPT Code 23470)
  • Total ankle arthroplasty (CPT Code 27702)
  • Revision total ankle (CPT Code 27703)

  To learn more: Medicare Payment & CMS