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  • Proposed Medicare Outpatient Payment Rule Allows Payment for TKA in Outpatient Settings, Increases Overall Payment by 2%

    If the proposed Medicare outpatient prospective payment system (OPPS) rule for 2018 gets adopted as-is, payment for total knee arthroplasty (TKA) will no longer be an inpatient-only arrangement, outpatient hospitals would see an overall 2% increase in payments, and ambulatory surgical centers could see a boost of nearly that much.

    APTA and other therapy groups are on record as supporters of the move toward reimbursement for outpatient-based TKA, though the association cautioned that the change would need to be accompanied by updated payment methodologies. Late last year, The New York Times described the possibility of the move toward outpatient-based TKA as one "sowing deep discord in the medical world."

    But CMS isn't stopping with TKA: the proposed rule also asks for comments on the possibility of removing total hip arthroplasty from inpatient status at some point in the future.

    The 2% payment increase to outpatient hospitals is an estimate based on a combination of a market basket update offset by adjustments related to productivity and cuts called for under the Affordable Care Act (ACA). While the increase is welcome, many hospital groups are concerned about other proposed changes that could negatively impact bottom lines, particularly a provision that would result in CMS paying 22.5% less than average sales prices for drugs purchased through the 340B program for "safety net" providers. Under the current rule, those providers receive payments that are 6% above average sale prices.

    Also of note in the proposed rule:

    • CMS would return to "non-enforcement" of direct supervision requirements for outpatient therapeutic services delivered in designated critical access hospitals and rural hospitals with fewer than 100 beds. It's a move designed to help rural hospitals recruit physicians, according to a CMS fact sheet on the proposed OPPS.
    • The Outpatient Quality Reporting Program would shed 6 measures, a change that CMS estimates will reduce administrative burden by 152,680 hours and save $6.5 million in reporting costs by 2020.
    • The mandatory startup of the Consumer Assessment of Healthcare Providers and Systems Outpatient and Ambulatory Surgery Survey would be delayed, though hospitals would be able to voluntarily report survey results next year.
    • Ambulatory surgical centers would receive an estimated 1.9% payment increase.
    • As in previous proposed rules, CMS also seeks input on how the overall Medicare system might be improved—an offer APTA took up in its comments to proposed rules earlier this year.

    APTA will review the OPPS proposed rule and submit comments on behalf of its members by the September 11 deadline. The association will provide a fact sheet on OPPS after the final rule is released later this year.

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