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On November 2, 2017, the Centers for Medicare & Medicaid Services (CMS) issued the final rule that includes updates to payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2018. The final payment rule provides for a 1.2 percent increase in ambulatory surgical center (ASC) reimbursement as well as makes certain changes that could have important implications for orthopedics medical billing in ASCs. The key changes that will impact orthopedic ASCs are as follows:

  • Total knee replacements removed from inpatient-only list: CMS removed total knee replacement from the inpatient-only list, but did not add it to the ASC payable list. However, many providers are hopeful that this could bring total knee arthroplasty closer to being added to the ASC payable list.
    Total knee replacement involves removing the damaged knee and replacing it with an artificial knee implant. While it was traditionally performed as an inpatient procedure, total knee replacement surgery is now available on an outpatient basis. Recent advances such as improved perioperative anesthesia, minimally invasive techniques and start of rehabilitation procedures soon after surgery have made it possible for patients to go home the same day of the surgery.
    According to a February 2017 report, outpatient total joint replacements are on the rise. Vizientinc reported a 47 percent increase in elective outpatient hip and knee replacement procedures. Sg2 expects joint replacements to grow by 77 percent over the next decade, while inpatient total joint replacements are expected to grow only 3 percent over the same period.
  • CMS invites comments on adding total and partial hip replacements to ASC payable list: CMS has decided not to add total and partial hip replacements to the ASC payable list, saying “Our understanding is that these procedures typically require more than 24 hours of active medical care following the procedure.” However, CMS has solicited comments for adding total and partial hip replacements to the ASC payable list. The agency will continue discussion on the other joint replacement codes before removing them from the inpatient-only list as well.
  • Addition of two spine procedures to ASC payable list: CMS added two spine procedures to the ASC payable list:
    • CPT 22856 – Total disc arthroplasty (artificial disc), anterior approach, including discectomy with endplate preparation (includes osteophytectomy for nerve root or spinal cord decompression and microdissection), single interspace, cervical
    • CPT 22858 – Second level, cervical disc arthroplasty with discectomy
      Artificial Total Disc Replacement involves the replacement of a degenerating intervertebral disc with an artificial disc in adults with degenerative disc disease (DDD) in either the lumbar or cervical region of the spine. The artificial disc is intended to preserve range of motion (ROM) and reduce pain, and prevent adjacent disc degeneration. Like knee arthoplasty, cervical disc arthoplasty can also be performed using minimally-invasive techniques and patients can go home in less than 24 hours.
  • Quality reporting: CMS finalized adding a new Ambulatory Surgical Center (ASC) Payment System and Quality Reporting (ASCQR) measure that will impact orthopedic surgery centers specifically:
    ASC-17: Hospital Visits after Orthopedic Ambulatory Surgical Center Procedures, which assesses all-cause, unplanned hospital visits within seven days of an orthopedic procedure performed at an ASC (beginning with the CY 2022 payment determination). For the purposes of this measure, “hospital visits” include emergency department visits, observation stays, and unplanned inpatient admissions.
  • Payment rates: Overall, ASC payment rates will increase 1.2 percent in 2018. Hospital outpatient departments received a 1.35 percent increase.

CMS acknowledges that it is possible to deliver safe, effective, and lower-cost spine care in a freestanding ASC and is continuing with its policy of moving higher-acuity cases to the outpatient setting. However, while the removal of total knee replacement from the inpatient-only list is perceived by many industry experts as bringing the procedure closer to the ASC payable list, others think that it can negatively impact ASCs’ ability to negotiate pricing with private payers if CMS sets the rate too low. ASC owners and operators should understand the rule changes and evaluate the impact that it will have on them. The impact will depend on how private payers react to the final rule. There are three things that ASCs can do:

  • Consider how to optimize potential new reimbursement opportunities created by the rule
  • Equip themselves with the necessary rate information from their contracts
  • Reach out to their third party payers ahead of January 1, 2018, when the rule goes into effect and negotiate rates if they perceive potential adverse effects to their overall case-level reimbursement

Orthopedics covers a wide variety of procedures and rules vary by payer. ASC reimbursement is governed by complex and ever-changing compliance regulations. In this context, the support of a reliable medical billing company can prove invaluable to optimize ASC reimbursement.

Julie Clements

Julie Clements, OSI’s Vice President of Operations, brings a diverse background in healthcare staffing and a robust six-year tenure as the Director of Sales and Marketing at a prestigious 4-star resort.

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