Medicare policy alters require physicians and coders to rethink billing techniques for TKA patients.

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Recent years have brought important alters in the performance and reporting of total knee arthroplasty (TKA). The Centers because that Medicare & Medicaid services (CMS) has played a an essential role v the April 1, 2016, beginning of the considerable Joint instead of (CJR) program, followed by the removal of TKAs native the inpatient-only perform (IPO) because that 2018. With the transition in website of service, and payment v bundled episodes, wellness information management (HIM) and case monitoring departments are an essential to effective clinical and financial outcomes for both patient and also facility.

CMS Makes known Its Intent and Medicare Policy

TKA actions are performed to treat degenerative joint diseases. Follow to the American Academy the Orthopedic Surgeons, TKAs space common, through an approximated 600,000 performed last year. The mean period of patient is 67 years; however, advances in an innovation and surgical an approach has led to boost in the variety of surgeries perform in patients under the period of 60.The Medicare IPO list suggests which procedures and also services CMS identifies as typically listed in the inpatient setup only — and therefore not paid under Medicare’s Outpatient Prospective Payment mechanism (OPPS). To keep pace with technological advancements and also surgical improvements, CMS reviews and also updates this list annually, and also publishes it as Addendum E come the OPPS last rule.Effective Jan. 1, 2018, CMS eliminated TKAs from the Medicare IPO list. The decision was made based upon information gathered from non-Medicare patients, which argued that a subset of healthy and balanced patients to be able to experience the procedure in one outpatient setting. This led CMS come conclude that comparable patients additionally exist in the Medicare population.Through the 2018 OPPS final dominance process, CMS enabled Medicare coverage for outpatient TKA surgeries, however only when performed in outpatient facilities connected with a hospital, and not in a free-standing ambulatory surgery center (ACS) setting. CMS to be clear that removal from the IPO list did not mean that TKAs can be performed only on an outpatient basis. Return CMS clearly stated that is intent, the change from the IPO list left physicians and also facility companies with outstanding questions connected to present Medicare policies, such together documentation requirements, post-acute professional care, interplay with the 2 Midnight Rule, and the CJR program.

Clear up the Confusion

When CPT code 01402 is reported v CPT password 27447, Arthroplasty, knee, condyle and plateau; medical and also lateral compartments through or there is no patella resurfacing (total knee arthroplasty), this code is payment under the OPPS and also payment because that this organization is packaged right into the payment because that CPT code 27447. If the code is not reported v CPT password 27447, the password is treated together an inpatient procedure the is not paid for under the OPPS. This readjust is retroactive come January 1, 2018.

Heed the 2 Midnight Rule

TKA was not subject to the two Midnight rule when top top the IPO list, but it is now:

… the hospital admission is meant to expectations at least two midnights in order to be extended as one inpatient procedure. If it deserve to be reliably intended that the patient will certainly not need at the very least two midnights in the hospital, the “Two-Midnight Rule” argues that the patience is considered an outpatient and is therefore subject come outpatient payment policies.

In former guidance, CMS additionally states that Medicare may treat part admissions spanning much less than 2 midnights together inpatient actions if the patience record contains documentation of medical need.Documentation must support the need for an inpatient remain (as it would with any kind of inpatient admission); however, that was no CMS’ intent for practitioners to paper the justification of one inpatient stay versus an outpatient stay. As soon as discerning inpatient vs. Outpatient status, consider: patient comorbidities, expectation because that the patience to require a continue to be that crosses two midnights, and also the need for skilled post-acute care.The an excellent news is, CMS has directed restore Audit builders (RACs) to hold-up audits of TKA situations for website of business until 2020, allowing providers and practitioners an possibility to improve documentation habits. But the directive only references website of service —nothing precludes CMS functional builders (i.e., RACs, Unified regime Integrity Contractors, Medicare bureaucratic Contractors) indigenous reviewing claims for worries of medical necessity or Medicare fraud, because that example.

Verify documented Medical Necessity


Description that the pains (onset, duration, character, aggravating, and also relieving factors); Limitation of activities of everyday living (ADLs) – specify; Safety concerns (e.g., falls); Contraindications to non-surgical treatments; Listing and description of failure non-surgical treatments such as: attempt of drugs (for example, NSAIDs); physics therapy; Intra-articular injections; and Braces, orthotics, or assistive devices.

Physical examination:

Deformity; variety of motion; Crepitus; Effusions; Tenderness; and Gait summary (with/without mobility aides).


Results the applicable imaging: MRI, X-ray

Clinical judgment: reasons for deviating indigenous a stepped-care approach

Auditors intend to view this info in the medical note as it uses to the patient’s situation. The information generally is discovered in the surgeon’s pre-procedure development notes, which leaves the hospital vulnerable throughout an audit if the admitting physician’s history and physics does not provide enough detail to assistance the clinical necessity that the procedure. Continuous conversations between case management, HIM, and also the operated doctor are useful to insure medical necessity documentation and also continuity of care regarding post-acute services. Failing to list comorbidities and social circumstance have the right to lead come a delay in home wellness services, physics therapy, and also skilled nursing basic placement.

Account for the affect on Hospital Reimbursement

The impact on hospital reimbursement can not be overlooked: Reimbursement for TKAs will be reduced when performed together an outpatient compared to what Medicare will certainly pay under the Inpatient Prospective Payment mechanism (IPPS). The reduced reimbursement will be limited to instances done on one outpatient basis and paid under an APC; TKAs perform in an inpatient setup will continue to be reimbursed at the price for Medicare Severity Diagnosis Related group (MS DRG) 469 or 470. Using national averages (the 50th percentile IPPS payment that DRG 470 and also the unadjusted substantial APC (C-APC) 5115), a facility deserve to expect to receive about $1,600 less for a TKA performed together an outpatient.Medicare participating hospitals paid under a cost-based methodology, such as vital access hospitals (CAHs), have another factor come consider: the gaue won implication to the patient. Because that PPS hospitals, whether the TKA is performed together an inpatient or outpatient, patience liability is restricted to the inpatient deductible ($1,364 in 2019). Because that TKAs performed in a CAH, the patience financial legal responsibility is not restricted to the Medicare part A deductible (20 percent the the reasonable price charges).Another area to think about is the impact on facilities compelled to get involved in the CJR program. CJR is an episodic go together payment the is retrospective and applies to complete hip and knee replacements. Hospitals participating in the CJR version are hosted to a jae won responsibility and are accountable for quality and also cost of the complete joint replacement illustration of care. CMS determines a target price based on hospital particular costs and regional costs. The payment has all reimbursement because that the 90-day period to all connected providers. Suppliers are paid under the suitable reimbursement at the time of service. At the perfect of a performance year, really spending that the “episode” is contrasted with a calculate target price. If the basic spends much less than the target price, a reconciliation payment is made to the facility. If prices exceed the target price, a reconciliation payment is made by the basic to Medicare.The CJR program uses to Medicare patients enrolled in traditional Medicare and is no applicable come Medicare Advantage, end-stage renal disease, or united Mine employees Medicare patients. Although the CJR regime was narrowed to 37 areas in the second year, hospitals in these locations are compelled to get involved in the program. TKAs performed together an outpatient will certainly be eliminated from the pool of CJR TKA patients, leaving the greater cost patient in the CJR program and also increasing expense per patient. Through the increased expense of care due to higher severity patients, infrastructure are at threat of exceeding the target price and also having to do reconciliation payments to Medicare.

Take ideal Measures

Given the outpatient option, existing Medicare rules (Two-Midnight rule and qualifying three-day stays) and also patient variables must be considered prior come a procedure. Effective conversations must take place between the surgeon and the health and wellness system to ensure the best patient outcome. Facilities should take into consideration adopting protocols to address patient variables (co-morbid conditions, anesthesia risks, article procedure complications) to provide an effective method of prioritizing patients for planned inpatient or outpatient procedures.

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Yvette M. DeVay, CPC, CIC, CPMA, CPC-I, is a regulation specialist v HCPro. She has much more than 20 years’ endure in matters of Medicare compliance, coding, and also audit. She holds a Bachelor of Science level from Pennsylvania State University and also a master’s level in Health management from Seton room University. DeVay is a member the the Harrisburg, Pa., neighborhood chapter.