AAOS Bulletin - December, 2005

Recommendations for Medicare five-year review

By Daniel H. Sung, JD


The Medicare five-year review is designed to adjust the current values for Medicare procedures.

Current values may be too high or too low because of changes in medical practice over the last five years. Or perhaps these procedures were incorrectly valued initially. Of the $3.2 billion in annual Medicare payments to orthopaedists, almost $600 million is at stake during this process.

The latest five-year review began in November 2004 and will end in January 2007 when the Centers for Medicare and Medicaid Services (CMS) publishes the new values. More than 100 orthopaedic procedures are being considered. The AAOS identified 96 potentially undervalued musculoskeletal procedures, primarily musculoskeletal tumor and fracture treatment procedures. CMS identified 19 musculoskeletal procedures and 11 integumentary and radiology procedures commonly performed by orthopaedic surgeons for reevaluation. CMS targeted a wide array of common musculoskeletal procedures, including codes for total hip and knee arthroplasty (27130 and 27447); spine (22520, 22554, 22612, 22840, 63047, 63048 and 63075); wrist, hand and finger (25447, 26055, 26160, 26600, 26951 and 64721); fracture treatment (27236); joint injection (20600 and 20610); and casting (29075).

Working for change

Throughout this process, AAOS has worked closely with several musculoskeletal specialty societies, including the American Association of Hip and Knee Surgeons, American Shoulder and Elbow Surgeons, American Society of Surgery for the Hand, Musculoskeletal Tumor Society, North American Hand Society and the Orthopaedic Trauma Association. The AAOS and the musculoskeletal specialty societies have two goals for the current five-year review. The first is to assess the values of musculoskeletal procedures targeted by CMS. If evidence proves the accuracy of the existing values, the AAOS will defend those values. The second goal is to assess the values of musculoskeletal procedures identified by the AAOS and the musculoskeletal specialty societies. If evidence proves these values are too low, the AAOS will seek increases for them.

From May through August 2005, the AAOS and the musculoskeletal specialty societies collected information on these procedures. Specialty society members were asked to complete surveys on the various procedures. The surveys asked for information on how long it takes to perform a procedure and how many postoperative visits (both hospital and office) are associated with a procedure. They also asked respondents to compare the intensity and difficulty of two procedures in relation to one another. In addition, the specialty societies reviewed other sources of data, including large databases that contained relevant pre-, intra- and postoperative information on musculoskeletal procedures.

In August and September 2005, AAOS and the musculoskeletal specialty societies presented their recommendations to the American Medical Association’s Specialty Society Relative Value Update Committee (RUC). The RUC is a multi-disciplinary body that makes recommendations to CMS. Although the RUC is merely an advisory body, CMS has accepted nearly 95 percent of the RUC’s recommendations in the past.

The AAOS and musculoskeletal specialty societies presented work relative value unit (RVU) recommendations for 25 musculoskeletal procedures. The recommendations included increasing the current work RVUs for eight procedures, decreasing them for three procedures and maintaining the existing work RVUs for 14 procedures. The RUC accepted most of these recommendations.

Next steps

There is still much work left for the AAOS and musculoskeletal specialty societies in the five-year review. The Academy is currently developing work RVU recommendations for 89 musculoskeletal procedures. This will require significant data collection efforts in the coming months.

In addition, there is no guarantee that CMS will accept the RUC’s recommendations when it reviews them early in 2006. If CMS does not accept the recommendations, the AAOS will continue to try to convince CMS of the appropriate values through other possible channels.

However, if CMS does accept the recommendations, orthopaedists will save tens of millions of dollars in Medicare payments they would have lost otherwise. They will also receive several million dollars a year in fee increases for previously “undervalued” procedures. Because many other payers use Medicare RVUs as the basis for their payments to physicians, even small changes can make a significant difference in reimbursements.

During the previous five-year review cycles, AAOS was able to increase RVUs for a number of musculoskeletal procedures. In 1997, CMS and the medical specialty societies evaluated more than 1,000 services and procedures; the 2002 review evaluated more than 800 medical services.

CMS will publish its initial decision on five-year review recommendations in the spring of 2006. The final decision will be announced next fall, and the final values and the new fee schedule will be effective on January 1, 2007. AAOS and the Bulletin will report on these decisions as they are published by CMS.

For more information on Medicare payment issues, contact Daniel H. Sung, JD, policy analyst in the AAOS department of socioeconomic & state society affairs, at (847) 384-4320 or via e-mail at sung@aaos.org


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