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Medicare has begun testing its bundled payment model for hip and knee replacement in 67 metropolitan areas across the nation. This will make orthopedics medical coding even more challenging for hospitals and orthopedic practices.

Hip and knee replacements are the most common inpatient surgery for Medicare beneficiaries and usually involve long recovery and rehabilitation periods. The Comprehensive Care for Joint Replacement (CJR) model, the rules of which were published in July, 2015, aims to maintain better and more efficient care for Medicare beneficiaries undergoing hip and knee replacements, also known as lower extremity joint replacements or LEJR.

The reason why the Centers for Medicare and Medicaid (CMS) chose to test the joint replacement first is that Medicare spent more than $7 billion for more than 400,000 operations in 2014 alone. The CJR model tests bundled payment and quality measurement for an episode of care associated with hip and knee replacements to drive hospitals, physicians, and post-acute care providers to work together to improve the quality and coordination of care from hospital admission to recovery, including post-discharge home health and physical therapy.

Hospitals and physician practices will need to pay special attention to medical coding and billing as the new model fundamentally changes how providers will receive Medicare reimbursement. In the traditional fee-for-service system, Medicare made separate payments to health care facilities for every individual service they provide beneficiaries for a single illness or course of treatment. The problem with this fragmented approach is that it did not ensure that patients would get high quality care.

On the other hand, in the bundled payment initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care. Bundling payments for multiple services for patients incurred during a single care episode is expected to lead to higher quality and more coordinated care as hospitals and orthopedic practices will be held responsible for:

  • how well patients fare during their hospitalization for hip and knee replacements as well as for 90 days afterward
  • how costs were managed in the process

Greater provider responsibility will lower Medicare’s expenditure.

According to the Pittsburg Post-Gazette, Pittsburgh health systems UPMC and Allegheny Health Network began their own internal joint replacement bundling initiatives two years ago. However, for small practices dealing with bundled claims can be frustrating and confusing. To get properly reimbursed, orthopedic specialists should:

  • Clearly understand the bundled payment methodology’s use of cost and quality benchmarks, risk adjustment and other mechanisms that are common to all risk arrangements
  • How each episode of care is defined, including each item or service included in the bundle, identified by CPT, HCPCS, ASA, and ICD-10-CM codes, and any applicable modifiers
  • How the payment will be shared between the participating providers;
  • How to manage bundled charges without affecting practice revenue

Lack of awareness of bundling rules can lead to claim denials and even penalties for fraud.

Physicians can meet coding, billing, and compliance requirements under the bundled payment model by opting for professional medical billing and coding services. With expert AAPC-certified medical coders having extensive knowledge of the latest CPT, ICD-10, HCPCS codes, NCCI edits, and bundling rules, a reliable company can help orthopedic specialists to improve care for patients and get proper reimbursement for the Medicare program.

Natalie Tornese

Holding a CPC certification from the American Academy of Professional Coders (AAPC), Natalie is a seasoned professional actively managing medical billing, medical coding, verification, and authorization services at OSI.

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