CMS proposes removing total knee replacements from inpatient-only list

In the 2018 OPPS proposed rule, CMS is moving ahead with a proposal to remove total knee replacements under CPT code 27477 (arthroplasty, knee, condyle and plateau; medial and lateral components with or without patella resurfacing (total knee arthroplasty)) from the inpatient-only list. If finalized, the procedure would be added to comprehensive APC (C-APC) 5115 (Level 5 Musculoskeletal Procedures) and assigned status indicator J1 (hospital Part B services paid through a C-APC).

The agency solicited comments from the public on whether total knee arthroplasty (TKA) should be removed from the inpatient only list in the 2017 OPPS proposed rule. In making the decision to officially propose removal of TKA from the IPO list the agency indicates that they have reviewed (1) the clinical characteristics of the TKA procedure and related evidence, including current length-of-stay (LOS) data for inpatient TKA procedures, (2) peer-reviewed literature related to outpatient TKA procedures, (3) input from the comment solicitation and (4) the professional opinions of orthopedic surgeons and CMS clinical advisors. CMS also indicated that they had taken into account the recommendation from the summer 2016 Advisory Panel on Hospital Outpatient Payment (HOP Panel) meeting that this procedure be removed from the IPO list. Based on their review and evaluation of the above, CMS has determined that the TKA procedure would be an appropriate candidate for removal from the IPO list.

CMS indicated that they “expect providers to carefully develop evidence based patient selection criteria to identify patients who are appropriate candidates for an outpatient TKA procedure as well as exclusionary criteria that would disqualify a patient from receiving an outpatient TKA procedure.” CMS believes that the subset of Medicare beneficiaries who meet patient selection criteria for performance of the TKA procedure on an outpatient basis may have the procedure performed safely in the outpatient setting.

CMS said removing the procedure from the inpatient-only list does not prohibit providers from performing it in an inpatient setting; it simply allows for Medicare coverage and payment for the procedure when performed in either the inpatient or outpatient setting. CMS reiterated that the decision regarding the most appropriate care setting for a given surgical procedure is a complex medical judgment made by the physician based on the beneficiary’s individual clinical needs and preferences and on the general coverage rules requiring that any procedure be reasonable and necessary. The agency indicated that it will prohibit Recovery Audit Contractor (RAC) review for patient status for total knee replacements in the inpatient setting for two years to allow time and experience for these procedures under this setting:

We would not want hospitals to err on the side of inappropriately performing the procedure on an outpatient basis due to concerns about the possibility of an inpatient total knee replacement claim being denied for patient status. That is, given that this surgical procedure would be newly eligible for payment under either the IPPS or the OPPS, RAC denial of a hospital claim for patient status would be prohibited.

In addition to total knee replacements, CMS is soliciting comment on removing partial and total hip replacements from the inpatient-only list. This proposal would affect procedures described by CPT codes 27125 (hemiarthroplasty, hip, partial [e.g., femoral stem prosthesis, bipolar arthroplasty]) and 27130 (arthroplasty, acetabular and proximal femoral prosthetic replacement [total hip arthroplasty], with or without autograft or allograft]). Specifically, CMS has requested comments addressing the following questions:

  • Are most outpatient departments equipped to provide PHA and/or THA to some Medicare beneficiaries?
  • Can the simplest procedure described by CPT codes 27125 and 27130 be performed in most outpatient departments?
  • Are the procedures described by CPT codes 27125 and 27130 sufficiently related to or similar to other procedures we have already removed from the IPO list?
  • How often is the procedure described by CPT codes 27125 and 27130 being performed on an outpatient basis (either in an HOPD or ASC) on non-Medicare patients?
  • Would it be clinically appropriate for some Medicare beneficiaries in consultation with his or her surgeon and other members of the medical team to have the option of either a PHA or THA procedure as a hospital outpatient, which may or may not include a 24-hour period of recovery in the hospital after the operation?

The agency is also soliciting comment on whether to add total knee replacements to the list of ambulatory surgical center-covered surgical procedures.   Comments on the proposed rule are due by September 11th.