Winners and Losers: CMS’ Proposed Ortho Reimbursement

The Centers for Medicare and Medicaid Services (CMS) released proposed changes for reimbursement procedures on April 14, 2017. Although currently “just” a proposal, any secured changes will take effect in August 2018 for the 2018 budget year. Under the FY2018 Inpatient Prospective Payment System (IPPS) proposal, there are a number of suggestions that may impact orthopedics, including changes to total ankle replacement (TAR) reimbursement.

The proposed changes target diagnosis-related groups, or DRGs, which come into play with acute care hospital inpatient cases via Medicare Part A for hospital insurance. Every case is designated a DRG, which in turn has a payment weight linked to it based on averages. One of the biggest proposed changes for FY2018 is an “increase in operating payment rates for generate acute care hospitals” to an average of 1.6%, up from the current 0.95% average.

However, not all changes are treated equally. There’s a proposed 1.4% decrease for orthopedic and flattish supplies from the 2017 budget year. There’s also a proposed decrease for the following DRGs:

• 360 fusion by 17.0%.
• Hip/knee replacements 0.2%
• Spine fusion by 3.6%,
• Vertebroplasty/kyphoplasty by 15.9%

One area of orthopedics is enjoying a proposed increase in reimbursement payments—artificial discs at an increase of 0.9%.

CMS welcomes comments for the Proposed Rule through June 12, 2017. It’s very possible that final rates will differ from proposed rates, and input from medical professionals can make a big difference. CMS can, and often does, make changes to DRG reimbursement every year based on a number of factors including changes to the Affordable Care Act. Comments can be submitted online at https://www.regulations.gov/.