CMS changes ICD-9 and DRG codes for revision TJA
AAOS/AAHKS are instrumental in effort to establish new codes
By Kevin J. Bozic, MD, MBA
Recently, the Centers for Medicaid and Medicare Services (CMS) announced a major change in its coding and reimbursement for revision total hip and total knee arthroplasties. This change, which will directly benefit acute care hospitals and indirectly benefit orthopaedic surgeons as well as their patients, is the end result of many years of work by the AAOS and the American Association of Hip and Knee Surgeons (AAHKS) Health Policy Committees.
In March 2003, with input from the AAOS and AAHKS Health Policy Committees, a multi-center research group was formed to collect and analyze data on resource utilization in primary and revision total joint arthroplasty (TJA). The research group included AAOS members and hospital administrators from the University of California, San Francisco (UCSF) (Kevin J. Bozic, MD, MBA), Mayo Clinic (Daniel J. Berry, MD) and Massachusetts General Hospital (Harry E. Rubash, MD). The primary objectives of this work were to improve the quality of administrative claims data related to TJA and to ensure equitable hospital and surgeon reimbursement for revision TJA, commensurate with the level of resource utilization associated with these procedures.
Members of the AAOS/AAHKS team who presented to CMS are (from left): Brian S. Parsley, MD, Baylor College of Medicine; David G. Lewallen, MD, Mayo Clinic; Robert Fine, JD, director, AAOS department of socioeconomic and state society affairs; Kevin J. Bozic, MD, MBA, University of California, San Francisco (UCSF); William J. Maloney, MD, Stanford University; James M. Naessens, MPH,Mayo Clinic; James H. Herndon, MD, MBA, Harvard Medical School; William L. Healy, MD, Lahey Clinic; and Richard F. Santore, MD, UCSF.
Our group completed two studies on hospital resource utilization in TJA. A pilot study compared detailed resource utilization (using activity-based costing methodology) between primary and all types of revision total hip arthroplasty (THA) procedures at UCSF.1 The second, a multi-center study involving more than 10,000 patient clinical and financial records from all three institutions, compared relative resource utilization among primary, single component and both component revision THA and total knee arthroplasty (TKA).2
The findings were consistent with those of previous investigators3-5 who demonstrated significant differences in operative time, length of stay, complication rates and overall resource utilization between primary and different types of revision TJA procedures.
Limitations of ICD-9-CM Codes
These studies highlighted the fact that the current ICD-9-CM diagnosis and procedure codes related to revision TJA are inadequate to detect relevant differences in patient characteristics, cause of failure, type and complexity of the revision procedure and resource utilization among TJA procedures.
The most commonly used ICD-9 diagnosis codes associated with failed TJA are 996.4 (complication of an orthopaedic device) and 996.66 (infection associated with an orthopaedic joint). Furthermore, all revision TJA procedures are grouped under one of only two ICD-9 procedure codes: 81.53 (revision THA) and 81.55 (revision TKA).
In October 2004, our team was invited to give a presentation at the ICD-9-CM Care & Coordination Committee meeting at CMS headquarters in Baltimore. This committee is charged with making all changes to the ICD-9-CM diagnosis and procedure codes. With input from the AAOS and the AAHKS Health Policy Committees, we proposed a series of additional, more descriptive diagnosis and procedure codes related to revision TJA (see sidebar on page 10). There was strong support from both the committees and the American Hospital Association to adopt these new codes.
On April 25, 2005, CMS officially adopted the proposed ICD-9-CM diagnosis and procedure codes for revision TJA and published them in the Federal Register. These codes will become effective in October 2005. The addition of these codes will lead to a better understanding of failure mechanisms in TJA and will ultimately facilitate quality improvement and better patient outcomes. They will also provide valuable and more accurate data for the American Joint Replacement Registry Project. Finally, the use of these codes will provide more accurate and relevant data inputs for risk adjustment models used by payors to predict resource utilization related to specific diagnoses and surgical procedures.
However, these benefits will only be realized if TJA surgeons improve their documentation so that hospital coders can abstract the appropriate diagnosis and procedure codes from the hospital record (admission and operative notes, discharge summaries, etc.). The August Bulletin will include helpful coding hints to ensure accurate coding related to revision TJA procedures.
A new DRG for revision TJA
The new ICD-9-CM diagnosis and procedure codes for revision hip and knee replacements stimulated CMS’ interest in learning more about differences in resource utilization between primary and different types of revision TJA procedures.
Previously, Medicare hospital reimbursement was the same for all lower extremity arthroplasty procedures under Diagnosis-Related Group (DRG) 209, regardless of the diagnosis, the complexity of the procedure or the patient’s health status at admission. This differs from Medicare reimbursement policies for other surgical procedures, including spinal fusion and coronary artery bypass grafting, which have been modified to reflect differences in patient characteristics and the complexity and resource intensity of these procedures.
The discrepancy between resource utilization and Medicare reimbursement for revision TJA procedures has resulted in substantial financial losses for hospitals that perform these procedures,3 and could ultimately jeopardize patient access to care as hospitals attempt to limit ongoing losses.
In 2002, Bernard F. Morrey, MD, of the Mayo Clinic, requested that CMS consider a separate DRG for revision TJA. Dr. Morrey’s request included the claim that certain hospitals (such as Mayo Clinic) were incurring “an undue financial burden” associated with revision TJA procedures “due to high referral rates from other hospitals.”
Based on this request, CMS performed a detailed review of DRG 209. They found that hospital charges for revision TJA procedures were 20 percent to 30 percent higher than for primary TJA. CMS also found that 70 percent of hospitals that performed primary TJA procedures also performed at least one revision TJA per year. However, only 5 percent of TJA hospitals performed at least 30 percent revisions.
CMS ultimately denied the request for a separate DRG for revision THA “based largely on concern that at least a significant portion of these revision cases are occurring in the same hospital that performed the initial replacement (and may, in fact, reflect factors related to the initial procedure that led to the need to perform a revision)…” This finding speaks to limitations in the current Medicare Provider Analysis and Review dataset and the need for more accurate and descriptive codes regarding the cause of failure and type of revision.
A convincing argument
On February 22, 2005, representatives of the AAOS, AAHKS and the Hip Society met with CMS leaders to discuss issues related to DRG 209. We presented data from both the pilot study and the multi-center study that demonstrated significant differences in hospital resource utilization between primary and revision TJA procedures. According to our research, hospital resource utilization for revision TJA was up to 45 percent higher than for primary TJA. Resource utilization was higher in nine of 11 hospital cost centers.2
Furthermore, preoperative comorbid disease was associated with significantly higher resource utilization among both primary and revision TJA patients. A diagnosis of periprosthetic fracture and the presence of femoral or acetabular bone loss were associated with significantly higher resource utilization in revision TJA.1,2 Another interesting finding of our work was that fewer hospitals and surgeons were willing to perform revision TJA procedures, due to the lack of incremental reimbursement associated with these procedures.
During the meeting, numerous options for addressing disparities between hospital resource utilization and reimbursement for revision and primary TJA procedures were discussed. Options considered varied from leaving all TJA procedures under DRG 209 to creating a separate DRG for revision TJA procedures, with a new comorbidity and complication (“cc”) adjustment for both primary and revision TJA DRGs.
Our committee strongly recommended that CMS adopt a new DRG for revision TJA and a cc adjustment for both primary and revision TJA. The AAOS, AAHKS and others requested CMS to revisit the issue of resource utilization associated with primary and revision TJA procedures.
Another issue addressed at the meeting was the impact that an increase in hospital reimbursement for revision TJA would have on reimbursement for primary TJA. According to CMS, the budget-neutral formula used for modifying DRG weights would offset any increase in reimbursement for revision TJA by reducing all other DRGs. Therefore, the impact on reimbursement for primary TJA would be negligible, at least in the short-term.
Change becomes a reality
The April 25 Federal Register 6 contained an announcement from CMS splitting DRG 209 into two separate DRGs: DRG 544 (Primary Hip and Knee Replacement) and DRG 545 (Revision Hip and Knee Replacement). In explaining its decision, CMS cited the importance of the input from the AAOS and orthopaedic surgeons, stating “We agree with the commenters and the AAOS that the creation of a new DRG for revisions of hip and knee replacements should resolve payment issues for hospitals that perform the more difficult revisions of joint replacements.”
CMS also noted that the data they received on differences in resource utilization in primary and revision TJA were most convincing. “The commenters reported on a recently completed study comparing detailed hospital resource utilization and clinical characteristics in over 10,000 primary and revision hip and knee replacement procedures at three high-volume institutions: the Massachusetts General Hospital, the Mayo Clinic, and the University of California at San Francisco.”
CMS credited the importance of input and collaboration with members of the AAOS and AAHKS in helping it understand the issues related to coding deficiencies and reimbursement discrepancies related to TJA procedures. Finally, CMS expressed a strong interest in maintaining an ongoing dialogue with representatives of the AAOS and AAHKS on health policy issues related to orthopaedic surgery.
Kevin J. Bozic, MD, MBA, is assistant professor in residence, UCSF Department of Orthopaedic Surgery, and a member of the AAOS Coding, Coverage and Reimburse-
ment Committee and the AAHKS Health Policy Committee. He can be reached at firstname.lastname@example.org
1. Bozic K, Katz P, Cisternas M, Ono L, Ries M, Showstack J. Hospital resource utilization for primary and revision total hip arthroplasty. J Bone Joint Surg Am. 2005;87(3):570-576.
2. Bozic K, Durbhakhala S, Berry D, et al. Differences in Patient Characteristics, Procedures Characteristics, and Hospital Resource Utilization in Primary and Revision TJA. J Arthroplasty (Accepted for Publication, March. 2005).
3. Iorio R, Healy W, Richards J. Comparison of the hospital cost of primary and revision total hip arthroplasty after cost containment. Orthopedics 1999;22(2):195-199.
4. Lavernia C, Drakeford M, Tsao A, Gittelsohn A, Krackow K, Hungerford D. Revision and primary hip and knee arthroplasty. A cost analysis. Clin Orthop 1995 Feb;(311):136-141.
5. Barrack RL, Sawhney J, Hsu J, Cofield RH. Cost analysis of revision total hip arthroplasty. A 5-year followup study. Clin Orthop 1999 Dec;(369):175-178.
6. Center for Medicare and Medicaid Services. Medicare Program; Proposed Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2006 Rates. Accessed at http://www.cms.hhs.gov/providerupdate/regs/cms1500p.pdf on April 26, 2005.