Update: CMS Guidelines for Outpatient Orthopedic Prosthetics Procedures

By Dr. Diana Rangaves, PharmD

 

Effective January 2018, the Centers for Medicare & Medicaid Services (CMS) revised guidelines concerning coverage for Total Knee Arthroplasty (link to CMS Publication).

There has been some confusion regarding the guidelines, in particular, the so-called “2 Midnight Rule” and their implementation.

Therefore, in response on January 24, 2019, CMS published a revised Medicare Learning Network bulletin “Total Knee Arthroplasty ITKA) Removal from the Medicare Inpatient Only (IPO) List and Application of the 2 Midnight Rule” (link to CMS Fact Sheet on TKA Removal from IPO).

CMS removed the “Current Procedural Terminology (CPT) code describing TKA procedures from Medicare’s Inpatient-Only List (IPO) effective January 2018.”

This allows TKA procedures to be performed on an inpatient or outpatient basis. Regardless, if a beneficiary is hospitalized as an outpatient or inpatient, Medicare disbursements are received by the hospital for TKA procedure.

Among the essential points made regarding this guidance from the American Academy of Orthopedic Surgeons (AAOS) (link to AAOS Statement on CMS TKA Removal from IPO List) are:

• Removal of a procedure from the IPO list does not require the procedure to be performed on an outpatient basis;

• Medicare expects most procedures to be performed on an inpatient basis and there is no additional justification needed for inpatient procedures;

• The Medicare policy regarding the “two-midnight” rule remains essentially unchanged;

• CMS is planning to consider several other arthroplasty procedures for removal from the IPO list. CPT codes under consideration include total and hemi hip and arthroplasty; total and hemi shoulder arthroplasty and; total ankle arthroplasty.

Health systems must evaluate how the change will affect its finances. CMS expects most procedures will continue to be done on an inpatient basis; therefore, health system admissions personnel are advised to carefully consider and evaluate the myriad of variables that must be considered.

Health system administrators and orthopedic surgeons must carefully consider these new regulations and revised develop protocols. These would include the utilization review standards to prioritize patients for planned inpatient or outpatient procedures to minimize the risk of financial and clinical care exposure.

CMS has allowed providers a window of 24 months to implement these activities before they allow Recovery Audit Contractors to start reviewing TKAs for the level of care billing.

A summary of all CMS changes to IPO and Out Patient procedures is in the January 2019 Medicare Learning Network bulletin “Update of the Hospital Outpatient Prospective Payment System (OPPS)” (link to the Medicare Learning Network newsletter updating TKA IPO guidelines).

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