The Unintended Impact of the Removal of Total Knee Arthroplasty From the Center for Medicare and Medicaid Services Inpatient-Only List

Total knee arthroplasty (TKA) was removed from the Centers for Medicare and Medicaid Services (CMS) Inpatient-Only (IPO) list starting January 1, 2018. Many hospitals responded by instructing surgeons to schedule all TKAs as outpatient procedures, and some local Medicare Advantage contractors began to expect outpatient status for all or most TKA cases. This activity and ensuing confusion has caused considerable unintended disruption for surgeons, hospitals, and patients. The purpose of this study was to gauge the impact on providers and patients.

Active members of the American Association of Hip and Knee Surgeons were sent a 9-question survey asking if the surgeon’s hospital was treating all patients undergoing TKA as outpatients and if Medicare Advantage administrators and commercial payers were treating all or most the same. Questions also inquired about the impact on surgeon practices and their patients.

Seven hundred thirty members (26%) responded; of which, 59.5% reported that their hospitals have instructed them that all Medicare TKAs should be scheduled as outpatient procedures; 40.5% have been asked to use proscribed documentation to justify that change; 30.4% reported that their patients have incurred added personal cost secondary to their surgical procedure being billed as an outpatient procedure; and 76.1% report that this issue has become an administrative burden.

The CMS clearly stated its expectation in the 2018 Outpatient Prospective Payment System Final Rule that the great majority of Medicare fee-for-service TKA patients would continue to be treated as inpatients. Nonetheless, many hospitals have decided to schedule all TKA cases as outpatients due to the 2-midnight rule despite a moratorium on recovery audits. It is the position of the American Association of Hip and Knee Surgeons that the CMS needs to provide more specific expectations concerning the needed language justifying admission or exempt TKA from the 2-midnight rule to mitigate the unintended confusion demonstrated by hospitals and some payers that has resulted from the removal of TKA from the Inpatient-Only list.