A new proposed rule finalized by CMS on December 2nd eliminates the Inpatient-Only Procedure list over a three year period beginning in 2021 with the removal of a significant number of musculoskeletal surgeries. The comment period ended on October 5th, drawing comments and criticism from the orthopedic community. The rule stands poised to impact outpatient orthopedic care.
CMS finalized a complete, gradual list elimination beginning with orthopedics. As of today, about 300 musculoskeletal surgeries are slated for removal in 2021. It’s important to note that even though these surgeries would be removed from the Inpatient-Only Procedure (IPO) list, they can still be added to the Ambulatory Surgical Centers (ASC) covered procedures list. In fact, CMS is proposing to add total hip arthroplasty to the ASC list in 2021.
As the entire list is eliminated, designation of admission status will follow the “two-midnight” rule. First established in 2013, physicians preoperatively determine if a patient is expected to need two or more midnights in a hospital for post-surgical care. For some procedures, the answer is obvious. But there are many surgeries where patient characteristics and other factors complicate the decision making process.
Hip And Knee Replacements: A Test Case
In recent years, the most memorable example of an orthopedic procedure removal from the IPO list is hip and knee replacements. Innovations in surgical techniques and patient care advanced to the point that orthopedic surgeons could safely perform the surgery in an outpatient setting, prompting CMS to remove the procedure in 2018.
When procedures are eliminated, cases do not automatically default to outpatient. Admission status is left to the physician’s clinical judgment. However, hospitals and insurance payers did not interpret the law correctly when hip and knee replacements were removed. Hospitals defaulted to all outpatient status because they were afraid of audits and government retribution, while commercial insurance payers quickly required justification for all inpatient designations.
These extreme reactions simplified the law for large healthcare organizations, while disregarding clinical decision making. At the time, rural orthopedic surgeons were slammed with mountains of paperwork, justifying each inpatient designation because no ASC or HOPD existed in their geographic area.
CMS’s drive to shift healthcare towards a value-based model is one reason hip and knee replacements were removed at the time. And it’s another reason they’re focusing on eliminating orthopedic surgeries first in 2021. Many orthopedic procedures are high-volume and expensive for Medicare to reimburse.
In non-Medicare patients, many orthopedic procedures have already moved to an outpatient setting. But certain patients will always need inpatient care. The medical community’s apprehension about the removal of these surgeries from the list include if the outpatient setting is prepared, and if anyone will take advantage of the circumstances for their own benefit.
Advocacy experts from the American Academy of Orthopaedic Surgeons believe the long term impacts will include more options for orthopedic physicians, as well as increased reliance on physicians’ clinical judgment. They also believe the outpatient surgery industry will be pushed to innovate, and must prepare for a gradual but steady shift in volume.
Most likely, the shift will be seen first in the least sick or complex patients moving to freestanding healthcare facilities. It’s also likely that patients themselves will embrace the change. After the COVID-19 pandemic arrived, patients were much more willing to consider surgery at outpatient facilities to avoid hospitals entirely. Together with a lower total cost of care, patients will likely see outpatient status as a more favorable option.
Due credit to the American Academy of Orthopaedic Surgeons, Dr. Joseph A. Bosco and Dr. Daniel Murray for providing much of the factual information for this article in episode 10 of the Bone Beat Advocacy Podcast. Listen to the full episode here.
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