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Medicare reimbursement and orthopedic surgery: past, present, and future

  • Orthopaedic Health Policy (A Miller, section editor)
  • Published:
Current Reviews in Musculoskeletal Medicine Aims and scope Submit manuscript

Abstract

Purpose of review

This paper reviews the history and structure of Medicare reimbursement with a focus on aspects relevant to the field of orthopedic surgery. Namely, this includes Parts A and B, with particular attention paid to the origins of Diagnosis Related Groups (DRG) and the physician fee schedule, respectively. We then review newer policies affecting orthopedic surgeons.

Recent findings

Recent Medicare reforms relevant to our field include readmission penalties, the evolution of bundled payments including the mandatory Comprehensive Care for Joint Replacement (CJR) and Surgical Hip and Femur Fracture Treatment (SHFFT) programs, and the new mandatory Merit-based Incentive Payment System (MIPS) pay-for-performance program.

Summary

Providers are facing an increasingly complex payment system and are required to assume growing levels of financial risk. Physicians and practices who prepare for these changes will likely fare best and may even benefit.

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Abbreviations

ACE:

Acute Care Episode (Bundled Payment Program)

ACA:

Patient Protection and Affordable Care Act of 2010

ACI:

Advancing Care Information

ACO:

Accountable Care Organization

APMs:

Alternative Payment Models

BBA:

Balanced Budget Act of 1997

BPCI:

Bundled Payment for Care Improvement (Bundled Payment Program)

CC:

Complications and Comorbidities

CEHRT:

Certified Electronic Health Record Technology

CHIP:

Children’s Health Insurance Program

CJR:

Comprehensive Care for Joint Replacement (Bundled Payment Program)

CMMI:

Center for Medicare and Medicaid Innovation

CMS:

Centers for Medicare and Medicaid Services

COLA:

Cost-of-living adjustment

CPS:

Composite Performance Score (for MIPS)

CPT:

Current Procedural Terminology

DRG:

Diagnostic Related Group

DSH:

Disproportionate Share Hospitals

EHR:

Electronic Health Record

FFS:

Fee for Service

HAC:

Hospital Acquired Conditions

HCAHPS:

Hospital Consumer Assessment of Healthcare Providers and Systems

HMO:

Health Management Organizations

HRRP:

Hospital Readmission Reduction Program

ICD-10:

International Classification of Diseases, 10th Revision

IPAB:

Independent Payment Advisory Board

IPPS:

Inpatient Prospective Payment System

LEJR:

Lower Extremity Joint Replacement

MACRA:

Medicare Access and CHIP Reauthorization Act of 2015

MCC:

Major Complications and Comorbidities

MedPAC:

Medicare Payment Advisory Committee

MEI:

Medicare Economic Index

MMA:

Medicare Prescription Drug, Improvement, and Modernization Act of 2003

MIPS:

Merit-based Incentive Payment System

MSA:

Metropolitan Statistical Area

MS-DRG:

Medicare Severity-Diagnostic Related Group

MU:

Meaningful Use

P4P:

Pay for Performance

PQRS:

Physician Quality Reporting System

PRO:

Patient-Reported Outcomes

QPP:

Quality Payment Program

RBRVS:

Resource-based Relative Value Scale

RVU:

Relative Value Unit

SGR:

Sustainable Growth Rate

SHFFT:

Surgical Hip and Femur Fracture Treatment (Bundled Payment Program)

VBM:

Value Based Modifier

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  1. Rothman Institute at Thomas Jefferson University, 925 Chestnut St. Fifth Floor, Philadelphia, PA, 19107, USA

    R. Carter Clement, Suneel B. Bhat, Meredith E. Clement & James C. Krieg

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Carter Clement, R., Bhat, S.B., Clement, M.E. et al. Medicare reimbursement and orthopedic surgery: past, present, and future. Curr Rev Musculoskelet Med 10, 224–232 (2017). https://doi.org/10.1007/s12178-017-9406-7

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