2015 CMS Ortho Hospital Payments Up Slightly

Payments from CMS (Centers for Medicare & Medicaid Services) to hospitals will decline by $756 million for 2015. Payments for orthopedic DRGs (diagnostic related groups), according to Wells Fargo analyst, Larry Biegelsen were up 0.3% vs. the final 2014 rule.

On August 4, 2014, the agency issued their 2015 Inpatient Prospective Payment System (IPPS) 2, 442-page final rule. Overall, CMS will pay hospitals an increase of 1.4%. However, in a news release the agency said that after accounting for penalties for hospital readmission and other factors, the actual payments will decline by approximately 0.6%.

One of the new provisions required under the Affordable Care Act is requiring more hospital price transparency. Each hospital must establish and make public a list of its standard charges for items and services.

Orthopedics

BMO Capital Market analyst Joanne Wuensch and her team pored over the rule to tease out the orthopedic related payments. Notably there were no add-ons for any orthopedic devices this year.

Wuensch reported that lower extremity joint replacement (including hip and knee) with major co-morbidities decreases 0.3% and without the co-morbidities decreases 0.4%. Upper extremity joint replacement (e.g., shoulders) with the co-morbidities decreases 7.6%.

Hip or knee revision procedures with co-morbidities decrease 1.2% and without co-morbidities increases 1.2%. Spine procedures with co-morbidities increase 0.4%. Artificial discs were up 3.6%

Biegelsen noted that the agency also finalized the collapse of two upper extremity replacement codes (483 & 484) into the 483 code. It also created three new DRGs (518, 519, 520) for cervical discs and deleted existing cervical disc DRGs 490 and 491.

To see the entire rule, start your access with an agency fact sheet with a link to the entire rule.