AAOS Bulletin - April, 2006

AAOS advocates for changes in coding, payments

By Daniel J. Sung, JD

The AAOS represents the interests of the orthopaedic community in many ongoing advocacy efforts. Every year, AAOS representatives make recommendations on Medicare payment rates for new musculoskeletal procedures through a process known as the AMA/Specialty Society RVS Update Committee (RUC).

The AAOS makes its recommendations to the RUC based on survey data collected from members. The surveys rate important aspects of the procedure, such as the preoperative, intraoperative and postoperative time required for the procedure; the intensity, skill, physical and mental effort needed; and an estimated relative value for the procedure as compared to existing procedures. After a thorough analysis of the survey results, the AAOS presents its recommendations to the RUC.

At RUC meetings, the AAOS must convince committee members that the Medicare payment recommendation is reasonable. Once the AAOS is successful in convincing the RUC of the appropriate payment rate, the recommendation is forwarded to Medicare for approval. The RUC process is important because Medicare almost always adopts the RUC’s recommendations and uses them to set payment rates for all Medicare procedures.

Recently, the RUC has been criticized by the Medicare Payment Advisory Commission (MedPAC), which recommended creation of an outside panel to identify overvalued procedures. MedPAC charged that the Centers for Medicare and Medicaid Services has relied too heavily on physician specialty societies, such as the AAOS, to identify misvalued services. The AAOS will continue to monitor this development carefully, to ensure that any such panel has the representation, expertise and resources needed to adequately identify such services.

Previous successes

In 2005, the AAOS succeeded in getting payment approved for several new procedures, including kyphoplasty, incision and drainage of spine abscesses, and high-energy electrocorporeal shock-wave therapy for plantar fasciitis.

In addition to making payment recommendations for new procedures, the RUC also makes payment recommendations for existing procedures through a process known as the five-year review. This process allows specialty societies (including the AAOS) and Medicare to identify potentially undervalued and overvalued Medicare payments for existing procedures.

The five-year review is similar to the annual RUC process because recommendations are based on the results of survey data. The main difference is that the review covers payments for existing procedures.

The RUC has just completed another five-year review, in which the AAOS was heavily involved. In a typical five-year review, the payment rates for many procedures are examined, and this time was no exception. The AAOS defended the values for dozens of high-volume musculoskeletal procedures performed by orthopaedic surgeons, such as total hip and knee arthroplasties (27130 and 27447); spine procedures (22520, 22554, 22612, 22840, 63047, 63048 and 63075); wrist, hand and finger procedures (25447, 26055, 26160, 26600, 26951 and 64721); treatment of hip fractures (27236); application of short arm casts (29075); and joint injections (20600 and 20610).

In addition to defending the payment for numerous musculoskeletal procedures, the AAOS made recommendations for payment increases in 96 procedures, including many musculoskeletal tumor and fracture treatment procedures. The AAOS and the orthopaedic community will learn whether there will be any increases or decreases in payment as a result of this process early this summer, when Medicare publishes this information.

In its Report to the Congress earlier this year, MedPAC charged that the five-year review should examine services that have experienced substantial changes in length of stay, site of service, volume, practice expense and other factors that may indicate changes in physician work values. MedPAC noted that the work required to perform a procedure should decrease over time, as physicians become more familiar with it. If challenged, the data collected by the AAOS could be helpful in counteracting this argument.

Voicing orthopaedic concerns

The AAOS also advocates on behalf of orthopaedics with respect to other payment policy issues by commenting on changes made by Medicare through the rule-making process. Every year, Medicare announces changes and updates in payment policies through the Physician Fee Schedule Rule. Often this rule contains provisions that affect orthopaedics.

In 2005, the AAOS commented on behalf of orthopaedics on issues related to practice expense reimbursement, the methodology used to report casting supplies and reductions in payment for multiple diagnostic images.

CPT is another process where the AAOS advocates on behalf of the interest of orthopaedics. Physicians’ Current Procedural Terminology (CPT), which is updated annually by the American Medical Association (AMA), contains a list of services and procedures, enabling physicians to report what they do in everyday practice. CPT is important because almost all health insurance payers (including Medicare) use it as a reporting tool in the reimbursement process.

The AMA allows anyone to submit a coding proposal for a new procedure, but there is no guarantee a proposal will be approved. The AMA engages in thorough deliberations to determine whether to accept a coding proposal, and will incorporate a proposal into CPT only if certain criteria are met.

The AAOS monitors the CPT process and provides its support for legitimate musculoskeletal coding proposals. Representatives on the AAOS Coding, Coverage, and Reimbursement Committee have vast experience in the CPT process. Because the committee includes representatives from 13 different musculoskeletal societies, it has complete representation across all of orthopaedics. In addition, three CPT advisors sit on the Academy’s Coding Committee. The AAOS can help ensure a coding proposal is accepted by the AMA by using these advisors’ knowledge and experience to successfully navigate this complex process.

The AAOS devotes significant resources to advocacy efforts and will continue to diligently represent its members on musculoskeletal issues in the RUC, CPT, and Physician Fee Schedule Final Rule processes.

Daniel J. Sung, JD, is a policy analyst in the department of socioeconomic and state society affairs.

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