August 2003 Bulletin

Orthopaedics responds as Medicare questions arthroscopy for osteoarthritis of the knee

By Daniel H. Sung, JD

Over the course of the past year, the AAOS has spearheaded a coalition of musculoskeletal specialty societies that has worked with the Centers for Medicare and Medicaid Services (CMS) to develop an appropriate coverage policy for arthroscopic surgery and osteoarthritis of the knee for the Medicare program. This article summarizes those efforts to date.

Controversy first arose as a result of the July 2002 publication in the New England Journal of Medicine (NEJM) of the article, "A controlled trial of arthroscopic surgery for osteoarthritis of the knee," by Moseley et al. The article presented the results of a randomized, placebo-controlled trial that evaluated the efficacy of arthroscopic lavage and arthroscopic debridement for osteoarthritis of the knee. The authors concluded that outcomes of patients who underwent these procedures were no better than outcomes of those patients who underwent placebo surgery.

Widespread press coverage of the NEJM article misinterpreted the results and suggested that all arthroscopic surgery was questionable. The leadership of the AAOS, Arthroscopy Association of North America (AANA) and the American Orthopaedic Society of Sports Medicine (AOSSM) responded by publicly addressing the limitations of the article.

However, the NEJM article prompted the CMS to begin a national coverage analysis and determination to "evaluate the scientific evidence to determine the indications for which arthroscopic lavage and/or debridement for the treatment of the osteoarthritic knee is reasonable and necessary." CMS noted that "recent evidence published in the New England Journal of Medicine suggested that arthroscopic lavage and/or debridement in patients with osteoarthritis of the knee without other specific indications is no better than placebo surgery."

CMS makes national coverage decisions for the Medicare program because the laws that govern Medicare do not explicitly list the medical devices, surgical procedures or diagnostic services that are covered or excluded under the program. Instead, Congress has authorized CMS to determine which items and services are "reasonable" and "necessary" and will be covered under Medicare. When CMS makes a coverage decision, it issues a national coverage determination (NCD). These NCDs affect the entire Medicare program and are binding on all Medicare carriers.

Early in October 2002, in response to the CMS coverage analysis, William Tipton, Jr., MD, AAOS director of medical affairs, assembled a group of representatives from the AAOS, American Association of Hip and Knee Surgeons, AANA, AOSSM and the Knee Society to develop a unified response from the orthopaedic community. Alan Morris, MD, then chair of the AAOS Council on Health Policy and Practice, played an instrumental role in developing the coalition's position.

First meeting

In November 2002, musculoskeletal representatives met with CMS to provide them with clinical and scientific information on specific arthroscopic procedures and osteoarthritis of the knee. The representatives made several important points:

There are many patients with osteoarthritis of the knee that can be significantly helped by arthroscopic surgery. An overly broad change in Medicare policy would deny many patients a valuable treatment option.

There are indicators for arthroscopic debridement in patients with osteoarthritis of the knee, and the well-established teaching in the orthopaedic community is that pain alone is not a specific indicator for arthroscopy.

The patient selection process is based on a combination of variables, such as mechanical symptoms, limb and knee joint alignment and severity of arthritis.

All of these are important factors that can lead to positive responses to arthroscopic surgery and significantly better patient outcomes.

Second meeting

In January 2003, musculoskeletal representatives met again with CMS specifically to discuss the NEJM study, in light of the publicity and media attention surrounding this issue. The representatives addressed the article's conclusions and applicability to Medicare coverage policy.

The representatives acknowledged the design strengths of the study and encouraged further high-quality, evidence-based studies. However, they also emphasized the risks of basing CMS coverage policy on the results of one study. The representatives also noted what they viewed as drawbacks of the NEJM study: Use of an unpublished instrument to measure pain outcomes, potential selection bias due to the number of patients who did not participate in the study, lack of well-defined specific indicators as inclusion and exclusion criteria and flaws in the statistical analysis of data from the study.

Furthermore, the representatives argued it would be wrong to create policy that extended beyond the scope of the NEJM study. The authors of the study concluded that arthroscopic lavage and debridement for patients with osteoarthritis of the knee, without other specific indications, was no better than placebo surgery. The NEJM article examined the outcomes of arthroscopic lavage and debridement in patients with osteoarthritis of the knee. The study did not analyze the outcomes of the subgroup of patients who had specific mechanical symptoms in addition to osteoarthritis. Representatives argued that any coverage decision by CMS should not extend beyond the scope of the study.


To provide CMS with current information and to assist in the coverage determination process, the musculoskeletal societies submitted a report, "Arthroscopic Surgery and Osteoarthritis of the Knee." The report provided current scientific evidence that supported the indications of arthroscopic debridement for the treatment of the osteoarthritic knee, as well as definitions, treatment options and detailed information on the specific indicators for arthroscopic surgery. The report also included a bibliography of recent clinical and scientific articles on the arthroscopic management of osteoarthritis, along with the AAOS evidenced-based document, "Improving Musculoskeletal Care in America (IMCA) Project: Osteoarthritis of the Knee."

Current Situation

In July 2003, CMS posted a decision memorandum that outlined its coverage position on arthroscopy for the osteoarthritic knee. CMS determined "arthroscopic lavage alone is not reasonable and necessary for patients with osteoarthritis of the knee." CMS also determined "arthroscopic debridement is not reasonable and necessary for patients presenting with knee pain only or with severe osteoarthritis (Outerbridge classification III or IV)." The memorandum was based on the CMS review of the existing literature, the two meetings with the musculoskeletal representatives and the report submitted by the musculoskeletal societies.

The coverage decision parallels the position of the musculoskeletal societies. CMS recognized that arthroscopy is appropriate in virtually all circumstances in which the orthopaedic community now employs this technology. The CMS' decision limits the use of arthroscopic lavage or debridement in two subgroups of patients: those who present with knee pain only and those with severe cases of osteoarthritis.

The musculoskeletal societies have already contacted CMS to discuss next steps in the NCD process. Although the CMS decision was largely in line with the musculoskeletal societies position, it does raise some concerns.

First, there are specific problems with the use of the Outerbridge system as a method of determining the severity of arthritis because it is a post-operative classification system. Second, the musculoskeletal societies believe local Medicare carriers will need specific and detailed instructions to implement the coverage decision appropriately. The instructions should clearly reflect the limited applicability of the policy decision–the decision affects the subgroups of Medicare patients who suffer from knee pain only or who present with severe cases of arthritis in the knee.

Because of the importance of this issue, the AAOS and the other musculoskeletal specialty societies have agreed to continue working with CMS to develop specific instructions that will ensure the appropriate implementation of this coverage decision.

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