Healthcare organizations are split about a CMS proposed rule to allow knee and hip replacement surgeries at outpatient facilities and surgery centers, rather than only inpatient settings. Medicare paid more than $7 billion on more than 400,000 knee and hip replacements in 2014.
In comments to the CMS, opponents of the proposal, which falls under the Medicare Physician Fee Schedule, say it will hurt patient safety. those who support the plan say it will save healthcare dollars and give Medicare beneficiaries more options, including less expensive surgical centers.
Supporters of the change noted private payers already allow elective outpatient hip and knee replacements.
The CMS is following private payers' lead with the proposed rule. Commercial payers, though, are likely covering surgeries for a population younger and healthier than Medicare beneficiaries. Providers are pushing back on these efforts, unsurprisingly. With continued pressure to lower healthcare costs and an increase in outpatient settings, however, that could be an uphill fight.
In comments to CMS, providers employed by hospitals endorsed keeping the procedures in-house, while surgical centers praised the proposal rule's change. If implemented, the rule would mean less money flowing to hospitals, which are already dealing with the loss of revenue from fewer inpatient services as payers nudge patients to outpatient services whenever possible.
Providers and officials against the change spoke about patient safety and said medical staff need to monitor patients in-hospital following surgeries. Michigan Health & Hospital Association said removing total knee arthroplasty from the inpatient-only list is not “clinically appropriate for Medicare patients.” Fort Madison Community Hospital in Fort Madison, Iowa, said many patients don’t have a strong support system at home to help them after a total knee replacement as an outpatient.
“It will be more difficult for patients to qualify for (skilled nursing facilities) for needed therapy after surgery. This may affect small hospitals quality scores. The criteria from CMS is ambiguous who should have their surgery done as an inpatient or outpatient,” according to the hospital.
Fort Madison Community Hospital added the changes would hurt small community hospitals.
However, Dr. Rina Jain of the Orthopedic Medical Group in San Diego, California, wrote in support of the proposed rule, and said patients enjoy better experiences and quality at a lower cost in outpatient facilities. Jain said the inpatient surgeries are expensive, and require several days in a hospital. However, less invasive techniques allow doctors to now perform the procedures "safely and effectively in outpatient facilities such as (ambulatory surgery centers)."
Missy Soliz, quality and risk manager at Mississippi Valley Surgery Center in Davenport, Iowa, said her surgery center has performed more than 1,400 outpatient total knee and total hip replacements for more than 10 years “with excellent outcomes.” She estimated about 25% to 40% of Medicare patients would make candidates for outpatient total knee or hip replacement. Soliz said her program consistently produces better outcomes than hospitals and “results in a faster recovery than a traditionally inpatient joint replacement.”
CMS’ proposed rule would take a revenue-generator from hospitals and could affect CMS’ bundled payment programs that involve joint replacement, while giving more business and revenue to outpatient services. What the CMS ultimately decides this fall will have a major financial impact on hospitals, and could be a windfall for outpatient facilities and surgery centers.