Knowledge Base Article

The Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Final Rule was released Friday November 1st. This week MMP highlights finalized changes to the Inpatient Only (IPO) List, a related change to medical review guidance for review contractors, and additions to the ASC Covered Procedures List (CPL). 

Total Hip Arthroplasty (THA) Removed from the IPO List

For several years now, CMS has discussed the removal of total hip arthroplasty (THA) as well as partial hip arthroplasty (PHA) from the IPO List. In response to the CY 2018 Proposed Rule, several surgeons and other stakeholders believe that, “given thorough preoperative screening by medical teams with significant experience and expertise involving hip replacement procedures, the THA procedure could be provided on an outpatient basis for some Medicare beneficiaries.”

CMS finalized their proposal to remove CPT code 27130 (Arthroplasty, acetabular and proximal femoral prosthetic replacement (total hip arthroplasty) with or without autograft or allograft) from the IPO List. This procedure will be assigned to C-APC 5115 (Level 5 Musculoskeletal Procedures) with a status indicator of “J1.” Note, CMS is also removing anesthesia code 01214 (anesthesia for open procedure involving hip joint; total hip arthroplasty) as a conforming change.

Similar to when the Total Knee Arthroplasty (TKA) procedure was removed from the IPO list, CMS has no plans to establish patient selection criteria for THA or any procedure. They do reiterate findings that may “likely (but not necessarily)” make a good candidate and who may not be a strong candidate for outpatient THA.

 “Likely” Candidate for Outpatient THA

• A patient with a relatively low anesthesia risk, and
• No significant comorbidities, and
• Has family members at home to assist with post-operative care.

Unlikely Candidate for Outpatient THA

• “A patient requiring a revision of a prior hip replacement, and/or
• Has other complicating clinical conditions including multiple co-morbidities such as obesity, diabetes, heart disease.”

All Procedure Codes being removed from IPO List for CY 2020 page 675

In addition to THA, CMS received several comments regarding procedures believed to meet the criterion for removal from the IPO list. The following table reflects the changes to the IPO list for CY 2020.

‍Short Inpatient Hospital Stays

The Two-Midnight Rule, as finalized in the FY 2014 IPPS Final Rule, clarified when an inpatient admission is considered reasonable and necessary for purposes of Medicare Part A payment. This policy established a benchmark for when a patient is considered appropriate for inpatient hospital admission and payment.

CMS also clarified that “when a beneficiary enters a hospital for a surgical procedure not designated as an inpatient-only (IPO) procedure as described in 42 CFR 419.22(n), a diagnostic test, or any other treatment, and the physician expects to keep the beneficiary in the hospital for only a limited period of time that does not cross 2 midnights, the services would be generally inappropriate under Medicare Part A.”

In the CY 2016 OPPS/ASC Final Rule CMS “finalized a proposal to allow for case-by case exceptions to the 2-midnight benchmark, whereby Medicare Part A payment may be made for inpatient admissions where the admitting physician does not expect the patient to require hospital care spanning 2 midnights, if the documentation in the medical record supports the physician’s determination that the patient nonetheless requires inpatient hospital care.” The following criteria are relevant to making this determination:

• Complex medical factors such as history and comorbidities;
• The severity of signs and symptoms;
• Current medical needs; and
• The risk of an adverse event.

Medical Review of Certain Inpatient Hospital Admissions under Medicare Part A for CY 2020 and Subsequent Years

When a procedure is removed from the IPO list, documentation in the record must support the need for the inpatient admission. These surgical claims are also subject to initial medical reviews of claims for short-stay inpatient admissions conducted by the Beneficiary and Family-Centered Care Quality Improvement Organization (BFCC-QIO).

BFCC-QIO’s may “refer a provider to the Recovery Audit Contractors (RACs) for further medical review due to exhibiting persistent noncompliance with Medicare payment policies, including, but not limited to:

• Having high denial rates;
• Consistently failing to adhere to the 2-midnight rule; or
• Failing to improve their performance after QIO educational intervention.”

For CY 2020 and subsequent years, CMS proposed a 1-year exemption from site-of-service claim denials, BFCC-QIO referrals to RACs, and RAC reviews for “patient status” (that is, site-of-service) for procedures that are removed from the IPO list under the OPPS beginning on January 1, 2020.

In response to public comments CMS finalized a two-year exemption rather than the proposed one year. CMS notes in a related Fact Sheet, “this two-year exemption period will allow providers time to update their billing systems and gain experience with respect to newly removed procedures eligible to be paid under either the Inpatient Prospective Payment System (IPPS) or OPPS, while avoiding potential adverse site of service determinations.”

As a provider, it is important to be mindful that this exemption is specific to site-of-service claim denials. This exemption does not include medical necessity based on a National or Local Coverage Determination meaning irrespective of site-of-service, a short stay claim can still be denied for lack of documentation supporting medical necessity of the procedure.

Total Hip Arthroplasty Moving Forward

“The removal of any procedure from the IPO list, including THA, does not require the procedure to be performed only on an outpatient basis. That is, when a procedure is removed from the IPO, it simply means that Medicare will pay for it in either the hospital inpatient or outpatient setting; it does not mean that the procedure must be performed on an outpatient basis.”

Following are a few things to think about as you plan for this change effective January 1, 2020:

• Make sure your Medical Staff is aware of the changes made to the IPO List.
• Potentially, develop protocols for patient site-of-service selection (IP vs. OP)?
• Educate Clinical Documentation Specialists who can assist with capturing the complexity of these patients through record review and potential physician queries.

Additions to the List of Ambulatory Surgical Center (ASC) Covered Surgical Procedures

In the CY 2019 OPPS Final Rule, CMS finalized the revision to the definition of a surgical procedure under the ASC payment system to include “procedures that are described by Level II HCPCS codes or by Category I CPT codes or by Category III CPT codes that directly crosswalk or are clinically similar to procedures in the CPT surgical range that we have determined are not expected to pose a significant risk to beneficiary safety when performed in an ASC, for which standard medical practice dictates that the beneficiary would not typically be expected to require an overnight stay following the procedure, and are separately paid under the OPPS.”

For FY 2020, CMS conducted a review of HCPCS codes currently paid under the OPPS but are not included on the ASC CPL. Based on this review, the following table highlights the procedures to be added to the ASC Covered Procedure List (CPL) for CY 2020.

Specific to the proposal to add Total Knee Arthroplasty (TKA) to the ASC CPL, CMS noted in the Proposed Rule that “we agree with commenters that there is a small subset of Medicare beneficiaries who may be suitable candidates to receive TKA procedures in an ASC setting based on their clinical characteristics. For example, based on Medicare Advantage encounter data, we estimate over 800 TKA procedure were performed in an ASC on Medicare Advantage enrollees in 2016. We believe that beneficiaries not enrolled in an MA plan should also have the option of choosing to receive the TKA procedure in an ASC setting based on their physicians’ determinations.”

Further, CMS noted “TKA procedures are still predominantly performed in the inpatient hospital setting in CY 2018 (82 percent of the time) based on professional claims data, and we are cognizant of the fact that the majority of beneficiaries may not be suitable candidates to receive TKA in an ASC setting. We believe that appropriate limits are necessary to ensure that Medicare Part B payment will only be made for TKA procedures performed in an ASC setting when the setting is clinically appropriate. Therefore, we are soliciting public comment on the appropriate approach to provide safeguards for Medicare beneficiaries who should not receive the TKA procedure in an ASC setting.”

Inpatient, outpatient or ASC, documentation is crucial to accurately reflect the complexity of the patient and support the medical necessity for services provided.