The election is over. Unless a lame-duck Congress acts between now and the end of the year, more than one million physicians and providers will be subject to a 26.5% across-the-board cut to their Medicare payments in January as required by the Sustainable Growth Rate (SGR). In addition, there’s a “fiscal cliff” waiting to take an additional 2% out of Medicare’s total budget in 2003.
Sounds ominous. But what can orthopedic surgeons really expect to be paid in January 2013?
Behind the Curtain of Codes
There’s some good news.
While the focus is on the larger federal budget issues, the real calculations of payments, reimbursements and public healthcare policies that affect a surgeon’s bottom line take place behind the curtain of codes and relative values of procedures, commonly referred to as “RUCs”, determined by the American Medical Association (AMA) and adopted by the Centers for Medicare and Medicaid Services (CMS).
We got our first look into 2013 when CMS issued a final physician payment rule on November 1, 2012 for Medicare’s payments for physician fees for 2013. The physician payment rule is not to be confused with CMS’ August 1 announcement that they will increase hospital payments for orthopedic surgeries in 2013 by on average 4.4%. The surgeons’ portion of those payments depends on their individual hospital negotiations.
Winners and Losers
Payments to family practitioners will increase by 7%, while other primary care providers will receive a 3-5% increase. Since the physician payment bucket is a zero-sum proposition, higher payments for some mean lower payments for others. For instance, independent laboratory providers (14% payment declines), neurologists (7% reductions), radiation oncologists (down 7%), pathologists (down 6%), interventional radiologists (down 3%) and cardiologists (down 2%) will all experience pay cuts.
But the headlines don’t tell the whole story for orthopedics.
Orthopedic Opportunities
According to the American Academy of Orthopaedic Surgeons (AAOS), the procedures and services most utilized by orthopedic surgeons are listed in 28 new or revised work RVUs (relative value units). AAOS presented these RVUs to the AMA/RUC and which then presented them to CMS. There were no procedures or services where CMS did not accept the RUC/AAOS recommendations.
The estimated cumulative impact on orthopedic surgery is 0% meaning CMS doesn’t expect that there will be any large changes for orthopedic surgery payments—positively or negatively.
The rule also includes a new policy to pay a patient’s physician or practitioner to coordinate the patient’s care in the 30 days following a hospital or skilled nursing facility stay. “Recognizing the work of community physicians and practitioners in treating a patient following discharge from a hospital or nursing facility will ensure better continuity of care for these patients and help reduce patient readmissions, ” said CMS in the rule to justify higher payments for primary care physicians.
But primary care physicians aren’t really getting more money as much as the codes they submit are being reimbursed at higher rates. And there is an increased number of codes to use to report their services. The real impact on orthopedic surgeons has to do with the RVUs that Medicare accepted from the AMA and are used to reimburse surgeons.
The good news for orthopedic surgeons is that they perform many of the procedures that are described in these new codes. So orthopods may well receive more income if they also perform those procedures and submit the associated new codes.
The Top Orthopedic Policies
From the perspective of the orthopedic surgeon, the major policies promulgated in the rule are the following.
- Creation of relative value units and payment for transition of care services (i.e., non face-to-face patient encounters). The AAOS supported this initiative.
- The extension of the multiple procedure reduction rule (MPRR) to apply to certain diagnostic testing. Even though this isn’t relevant to orthopedic surgery, AAOS commented in opposition to the proposal because it is similar to a previous CMS action that extended a payment reduction for multiple imaging or therapy services provided by the same provider on the same day.
- Updated interest rate assumption for practice expense inputs. AAOS supported the CMS proposal to update their interest rate assumptions for equipment. CMS switched to a more current rate and AAOS supported this because it is more accurate and fair.
- Proposed inputs for the Medicare value-based modifier. The Affordable Care Act (ACA) required CMS to create a modifier to provide differential payment rates based on “value.” CMS has announced they intend to start implementing the payment modifier in 2015. The AAOS supports the payment modifier in theory but has called for changes to the inputs and methods as proposed.
Dale Blasier, M.D. MBADale Blasier, M.D. MBA, is chair of the AAOS Coding, Coverage and Reimbursement Committee. Dr. Blasier told us that the RUCs did not have any great gains or losses for orthopedics. “That’s good news.”
The next big thing on the horizon for coding and reimbursement, according to Dr. Blasier, has to do with “non-face-to-face” services. Those are services where orthopedic surgeons are providing oversight and managing transitional work and chronic care conditions. In effect, billing for the “in-between” services.
Dr. Blasier also wants to be sure surgeon payments remain fair while hospitals continue to acquire private orthopedic practices and while payers move to bundling payments for the hospital (parts) and the physician (labor). He said that AAOS will be vigilant in assuring that payments to surgeons are fair because hospitals seem to have better representation.
A Good Trend
Maintaining the orthopedic payment status quo is significant considering that CMS enacted considerable pay cuts in other specialty areas, said Tim Hunter, vice president of Health Economics, Reimbursement & Public Policy at MCRA, LLC. “It also means that orthopedic surgery as a whole has maintained the positive gains from the 2011 rule.” He shared the following summary with us:
Estimated Impact on Total Allowed Charges-Orthopedic Surgery
| CY 2013 | |
| · Allowed Charges: | $3, 643 (million) |
| · Combined Impact: | 0% |
| CY 2012 | |
| · Allowed Charges: | $3, 584 (million) |
| · Combined Impact | |
| o Fully implemented: | 0% |
| o Transition: | -1% |
| CY 2011 | |
| · Allowed Charges | $3, 432 (million) |
| · Combined Impact | |
| o Fully implemented: | 4% |
| o Transition | 3% |
| CY 2010 | |
| · Allowed Charges | $3, 261 (million) |
| · Combined Impact | |
| o Fully implemented: | 2% |
| o Transition: | 0% |
Hunter said the obvious focus within the rule is the improvement in payments for frontline care—internal medicine, family practice, and geriatrics (though the total expenditure for this line is relatively small). “However, this focus on direct physician-patient interaction also has a positive impact on orthopedic practices. CMS has increased the practice expense of RVUs associated with non-facility physician office visits for new and established patients, which positively impacts that portion of the orthopedic practice associated with non-surgical and conservative care treatment.”
The Rest of the Rule
In non-orthopedic specific areas, the final rule continues efforts by CMS to align quality reporting across programs to “reduce burden and complexity.” The rule makes changes to the PQRS (Physician Quality Reporting System) and the Electronic Prescribing (eRx) Incentive Program. These changes, says the agency, will simplify reporting and align the various programs’ quality reporting approaches so they support the National Quality Strategy.
The final rule also lays out next steps to enhance the Physician Compare website, including posting names of practitioners who, as part of the Million Hearts campaign, successfully report measures to prevent heart disease. These are recommended measures under PQRS as well.
Among other changes, the final rule expands access to services that can be provided by non-physician practitioners. The rule allows Certified Registered Nurse Anesthetists (CRNAs) to be paid by Medicare for providing all services that they are permitted to furnish under state law. This change will allow Medicare to pay CRNAs for services to the full extent of their state scope of practice. The rule also allows Medicare to pay for portable X-rays ordered by nurse practitioners, physician assistants and other non-physician practitioners.
Another rule outlines how Medicaid reimbursements will be brought on par with those of Medicare for primary care providers in 2013 and 2014, as outlined in the Affordable Care Act. The federal government will pay for 100% of the difference between the Medicaid state plan payment as of July 1, 2009 and the applicable Medicare rate.
Of particular interest to surgeons participating in ambulatory surgery centers is a 0.6% increase in payments. Hospital outpatient departments get an additional 1.8% in 2013. CMS also makes some changes to the quality reporting programs for both types of facilities.
Finally, the rule explains how Medicare will pay for molecular pathology services, which the agency says is the next innovation of clinical laboratory tests that will foster the development of personalized medicine. These tests will be paid under the Clinical Laboratory Fee Schedule with 2013 payment set by the gap filling method. The final rule also requires a face-to-face encounter as a condition of payment for certain durable medical equipment (DME) items for orders written on or after July 1, 2013.
Keep on Movin’
Relatively speaking, orthopedic surgeons and procedures have done well by Medicare for 2013. The agency seems to be saying it favors therapies which keep seniors moving and active over labs and testing procedures. Some might call this rationing. Orthopedists should call it effective medicine.
The final fee schedule rule will be published in the Federal Register on November 16 and take effect January 1, 2013.
