The Financial Implications of the Removal of Total Knee Arthroplasty From the Medicare Inpatient-Only List

Total knee arthroplasty reimbursement is declining overall and at a marginally faster rate amongst female orthopaedic surgeons: A Medicare analysis

Background

While the prevalence of total knee arthroplasty (TKA) is increasing, reimbursement is declining. The purpose of this study was to determine how surgeon gender influences procedure volume, reimbursement, practice style, and patient demographics for TKAs nationally and regionally between 2013 and 2021.

Methods

The Medicare Physician and Other Practitioners database was queried from 2013 to 2021 for procedure volume, TKA reimbursement, surgeon characteristics, and patient demographics for any surgeon who performed at least ten primary TKAs per year. Statistical tests were conducted to analyze differences based on surgeon gender, geography, and year.

Results

Of the 2,415,802 TKAs performed between 2013 and 2021, 1.5 % were billed by female surgeons. The number of TKAs performed annually increased by 29.1 % for female surgeons and decreased by 2.6 % for male surgeons. Between 2013 and 2021, reimbursement for TKAs decreased by 23.9 % for male surgeons and 26.2 % for female surgeons. In 2021, male surgeons were reimbursed $1017 per TKA while female surgeons were reimbursed $964 (p = 0.049). Male surgeons performed more TKAs annually in 2021 (Male: 39.3, Female: 30.9, p < 0.001), more total billable services (Male: 4148.0, Female: 2719.3, p < 0.001), and more unique billable services (Male: 70.7, Female: 55.3, p < 0.001) than female surgeons.

Conclusions

Female representation among surgeons who perform TKAs is increasing nationally. However, male surgeons treat more patients, perform more total billable services, and perform more unique billable services than female surgeons. TKA reimbursement is decreasing at a faster rate for female surgeons than male surgeons, although this is likely due to geographical differences.

Analysis of Costs Associated With Increased Length of Stay After Total Joint Arthroplasty at a Single Private Practice

INTRODUCTION

As the demand for total hip arthroplasty (THA) and total knee arthroplasty (TKA) increases, so does the financial burden of these services. Despite efforts to optimize spending and bundled care payments, THA and TKA costs still need to be assessed. Our study explores the relationship between perioperative costs and length of stay (LOS) for THA and TKA.

METHODS

A total of 614 patients undergoing THA or TKA at a single private practice with LOS from zero to 3 days were identified. All patients were insured by private or Medicare Advantage insurance from a single provider. Primary outcomes included total costs and their relationship with LOS, classified into surgeon reimbursement, facility costs, and anesthesia costs. Secondary outcomes included readmission rates and discharge disposition. Analyses involved Student t -test, analysis of variance, and chi-square tests.

RESULTS

Longer LOS was associated with increased total, facility, and anesthesia costs. Costs for THA patients were stable except for reduced surgeon reimbursement with longer LOS. Patients undergoing TKA experienced an increase in facility costs with longer LOS. Total facility and anesthesia costs increased with LOS for Medicare Advantage patients, but surgeon reimbursement remained stable. Privately insured patients experienced higher total and facility costs but stable surgeon reimbursement and anesthesia costs regardless of LOS.

CONCLUSION

Our study shows an increase in total cost with longer LOS, especially pronounced in privately insured patients. A notable reduction was observed in the surgeon reimbursement for Medicare Advantage patients with extended LOS. These findings underscore the need for efficient surgical practices and postoperative care strategies to optimize hospital stays and control costs.

Should Chronological Age be a Consideration in Patients Undergoing Elective Primary Total Knee Arthroplasty?

BACKGROUND

The optimal time for total knee arthroplasty (TKA) requires a balance between patient disability and health state to minimize complications. While chronological age has not been shown to be predictive of complications in elective surgical patients, there is a point beyond which even optimized elderly patients would be at increased risk for complications. The purpose of this study was to examine the impact of chronological age on complications following primary TKA.

METHODS

Using an administrative database, the records of 2,129,191 patients undergoing elective unilateral TKA between 2006 and 2021 were reviewed. The primary outcomes of interest were cardiac and pulmonary complications, and their relationship to the Charlson-Deyo Comorbidity Index (CDI) and chronological age. Secondary outcomes included risk of renal, neurologic, infection, and intensive care utilization postoperatively. The results were analyzed using a graphical method. The impact of chronological age as a modifier of overall risk for complications was modeled as a continuous variable. An age cutoff threshold of 80 years was also assigned for clinical convenience.

RESULTS

The risk of complications correlated more closely to the CDI (odds ratio (OR) 1.37 to 2.1) than chronological age (OR 1.0 to 1.1) across the various complications [Table 1. However, beyond age 80 years, the risks of cardiac, pulmonary, renal, and cerebrovascular complications were significantly increased for all CDI categories (OR 1.73 to 3.40) compared to patients below age 80 years [Table 2] [Figures 1A and 1B].

CONCLUSIONS

Chronologic age can impact the risk of complications even in well-optimized elderly patients undergoing primary TKA. As arthroplasty continues to transition to outpatient settings and inpatient denials increase, these results can help patients, physicians, and payors mitigate risk while optimizing the allocation of resources.

Site of Service Disparities Exist for Total Joint Arthroplasty

BACKGROUND

The rate of outpatient total joint arthroplasty procedures, including those performed at ambulatory surgical centers (ASCs) and hospital outpatient departments, is increasing. The purpose of this study was to analyze if type of insurance is associated with site of service (in-patient vs outpatient) for total joint arthroplasty and adverse outcomes.

MATERIALS AND METHODS

We identified patients undergoing unicompartmental knee arthroplasty (UKA), total knee arthroplasty (TKA), or total hip arthroplasty (THA) using Current Procedural Terminology codes in a national administrative claims database. Eligible patients were stratified by type of insurance (Medicaid, Medicare, private). The primary outcome was site of service. Secondary outcomes included general complications, procedural complications, and revision procedures. We evaluated the associations using adjusted multivariable logistic regression models.

RESULTS

We identified 951,568 patients for analysis; 46,703 (4.9%) patients underwent UKA, 607,221 (63.8%) underwent TKA, and 297,644 (31.3%) underwent THA. Overall, 9.6% of procedures were outpatient. Patients with Medicaid were less likely than privately insured patients to receive outpatient UKA or THA (UKA: odds ratio [OR], 0.729 [95% CI, 0.640-0.829]; THA: OR, 0.625 [95% CI, 0.557-0.702]) but more likely than patients with Medicare to receive outpatient TKA or THA (TKA: OR, 1.391 [95% CI, 1.315-1.472]; THA: OR, 1.327 [95% CI, 1.166-1.506]). Patients with Medicaid were more likely to experience complications and revision procedures.

CONCLUSION

Differences in site of service and complication rates following hip and knee arthroplasty exist based on type of insurance, suggesting a disparity in care. Further exploration of drivers of this disparity is warranted and can inform interventions (eg, progressive value-based payments) to support equity in orthopedic services. [Orthopedics. 2024;47(3):179-184.].

Increasing the Volume of Outpatient Total Joint Arthroplasty Procedures: An Evaluation of a Novel Rapid Recovery Pathway Program Within an Academic Medical Center

Background

There has been a national trend toward shifting joint arthroplasty procedures to the outpatient setting. These cases are often performed in freestanding ambulatory surgery centers (ASCs), which are often not accessible to surgeons within academic practices.

Purposes

We sought to investigate a novel rapid recovery program used to transition arthroplasty patients to an outpatient-based care system within an academic medical center.

Methods

All patients undergoing hip or knee arthroplasty between November 2019 and April 2021 were retrospectively evaluated for their eligibility for a rapid recovery pathway through the Extended Stay Unit (ESU) based on clinical and social criteria. Once admitted, patients were evaluated for whether they were discharged from the unit or if hospital admission was necessary.

Results

Out of the 444 patients deemed candidates for the rapid recovery program, 188 patients were admitted to the ESU (42.3%); 18 (9.6%) required inpatient hospital admission, with the majority of these due to failing physical therapy (16; 88.9%). Of the ESU patients who were successfully discharged home, 55 (32.4%) were discharged on postoperative day (POD) 0 and 115 (67.6%) on POD 1 (<23 hours).

Conclusion

As total joint arthroplasties shift toward the outpatient setting, surgeons in academic institutions must employ strategies to increase their volume of patient candidates for outpatient procedures. Our retrospective study of prospectively collected data suggests the feasibility of creating a separate rapid recovery unit within the hospital that can be an effective method by which to eventually transition to the ASC setting.

Lower Revenue Surplus in Medicare Advantage Versus Private Commercial Insurance for Total Joint Arthroplasty: An Analysis of a Single Payor Source at One Institution

BACKGROUND

Since the Affordable Care Act was passed in 2010, reductions in Medicare reimbursement have led to larger discrepancies between the relative cost of Medicare patients and privately insured patients. The purpose of this study was to compare reimbursement between Medicare Advantage and other insurance plans in patients undergoing total hip arthroplasty (THA) and total knee arthroplasty (TKA).

METHODS

Patients of a single commercial payor source who underwent primary unilateral TKA or THA at 1 institution between the dates of January 4 and June 30, 2021, were included (n = 833). Variables included insurance type, medical comorbidities, total costs, and surplus amounts. The primary outcome measure was revenue surplus between Medicare Advantage and Private Commercial plans. t-tests, Analyses of Variance, and Chi-Squared tests were used for analysis. A THA represented 47% of cases and a TKA 53%. Of these patients, 31.5% had Medicare Advantage and 68.5% had Private Commercial insurance. Medicare Advantage patients were older and had higher medical comorbidity risk for both TKA and THA.

RESULTS

Significant differences were observed in medical costs between Medicare Advantage and Private Commercial insurance for THA ($17,148 versus $31,260, P < .001) and TKA ($16,723 versus $33,593, P < .001). Additionally, differences were seen in surplus amounts between Medicare Advantage and Private Commercial insurance for THA ($3,504 versus $7,128, P < .001) and TKA ($5,581 versus $10,477, P < .001). Deficits were higher in Private Commercial patients undergoing TKA (15.2 versus 6%, P = .001).

CONCLUSION

The lower average surplus associated with Medicare Advantage plans may lead to financial strain on provider groups who care for these patients and face additional overhead costs.

Association of Total Knee Replacement Removal From the Inpatient-Only List With Outpatient Surgery Utilization and Outcomes in Medicare Patients

Importance

Little is known about the association of total knee replacement (TKR) removal from the Medicare inpatient-only (IPO) list in 2018 with outcomes in Medicare patients.

Objective

To evaluate (1) patient factors associated with outpatient TKR use and (2) whether the IPO policy was associated with changes in postoperative outcomes for patients undergoing TKR.

Design, Setting, and Participants

This cohort study included data from administrative claims from the New York Statewide Planning and Research Cooperative System. Included patients were Medicare fee-for-service beneficiaries undergoing TKRs or total hip replacements (THRs) in New York State from 2016 to 2019. Multivariable generalized linear mixed models were used to identify patient factors associated with outpatient TKR use, and with a difference-in-differences strategy to examine association of the IPO policy with post-TKR outcomes relative to post-THR outcomes in Medicare patients. Data analysis was performed from 2021 to 2022.

Exposures

IPO policy implementation in 2018.

Main Outcomes and Measures

Use of outpatient or inpatient TKR; secondary outcomes included 30-day and 90-day readmissions, 30-day and 90-day postoperative emergency department visits, non-home discharge, and total cost of the surgical encounter.

Results

A total of 37 588 TKR procedures were performed on 18 819 patients from 2016 to 2019, with 1684 outpatient TKR procedures from 2018 to 2019 (mean [SD] age, 73.8 [5.9] years; 12 240 female [65.0%]; 823 Hispanic [4.4%], 982 non-Hispanic Black [5.2%], 15 714 non-Hispanic White [83.5%]). Older (eg, age 75 years vs 65 years: adjusted difference, -1.65%; 95% CI, -2.31% to -0.99%), Black (-1.44%; 95% CI, -2.81% to -0.07%), and female patients (-0.91%; 95% CI, -1.52% to -0.29%), as well as patients treated in safety-net hospitals (disproportionate share hospital payments quartile 4: -18.09%; 95% CI, -31.81% to -4.36%), were less likely to undergo outpatient TKR. After IPO policy implementation in the TKR cohort, there were lower adjusted 30-day readmissions (adjusted difference [AD], -2.11%; 95% CI, -2.73% to -1.48%; P < .001), 90-day readmissions ( -3.23%; 95% CI, -4.04% to -2.42%; P < .001), 30-day ED visits ( -2.45%; 95% CI, -3.17% to -1.72%; P < .001), 90-day ED visits (-4.01%; 95% CI, -4.91% to -3.11%; P < .001) and higher cost per encounter ($2988; 95% CI, $415 to $5561; P = .03). However, these changes did not differ from changes in the THR cohort except for increased TKR cost of $770 per encounter ($770; 95% CI, $83 to $1457; P = .03) relative to THR.

Conclusions and Relevance

In this cohort study of patients undergoing TKR and THR, we found that older, Black, and female patients and patients treated in safety-net hospitals may have had lesser access to outpatient TKRs highlighting concerns of disparities. IPO policy was not associated with changes in overall health care use or outcomes after TKR, except for an increase of $770 per TKR encounter.

Trends in Outpatient Total Knee Arthroplasty (TKA) from 2012 to 2020

BACKGROUND

Trends over the past decade suggest a steady increase in the proportion of total knee arthroplasty (TKA) performed on an outpatient basis. However, the optimal patient selection criteria for outpatient TKA remain unclear. We aimed to describe longitudinal trends in patients selected for outpatient TKA and identify risk factors for 30-day morbidity following inpatient and outpatient TKA.

METHODS

We identified 379,959 primary TKA patients, 17,170 (4.5%) of whom underwent outpatient surgery from 2012 to 2020 within a large national database. We used regression models to evaluate trends in outpatient TKA, factors associated with undergoing outpatient (vs. inpatient) TKA and 30-day morbidity following outpatient and inpatient TKA. We used Receiver Operating Curves (ROC) to examine cut-off points for continuous risk factors.

RESULTS

The proportion of patients undergoing outpatient TKA increased from 0.4% in 2012 to 14.1% in 2020. Younger age, male sex, lower body mass index (BMI), higher hematocrit, and fewer comorbidities were associated with receiving outpatient (vs. inpatient) TKA. Variables associated with 30-day morbidity in the outpatient group included older age, chronic dyspnea, chronic obstructive pulmonary disease (COPD), and higher BMI. ROC curves indicated outpatients aged 68 and older, or with a BMI of 31.4 or higher were more likely to experience 30-day complications.

CONCLUSION

The proportion of patients undergoing outpatient TKA has been increasing since 2012. Older age (≥68 years), a higher BMI (≥31.4), and comorbidities such as chronic dyspnea, COPD, diabetes, and hypertension were associated with an increased odds of 30-day morbidity following outpatient TKA.

Same-Day Discharge Total Knee Arthroplasty in Octogenarians

BACKGROUND

One of the most important aspects of the transition to outpatient (OP) arthroplasty is patient selection, with guidance traditionally recommending that OP total knee arthroplasty (TKA) be reserved for patients <80 years old. However, there are limited data as to whether older age should really be considered a contraindication to OP-TKA. The purpose of this study is to assess the risk of complications and readmissions following OP-TKA in patients ≥80 years old.

METHODS

This is a retrospective, propensity-matched cohort study of the National Surgical Quality Improvement Program database from 2011 to 2019. Patients ≥80 years undergoing OP (same-day discharge) TKA were propensity matched to patients ≥80 years undergoing inpatient (IP) TKA based on age, gender, race, body mass index, American Society of Anesthesiologists classification, functional status, smoking status, anesthetic type, and medical comorbidities. There were 1,418 patients (709 IPs and 709 OPs) included. All baseline factors were successfully matched between IP-TKA versus OP-TKA (P ≥ .18 for all). Thirty-day complications, readmissions, reoperations, and mortality were subsequently analyzed.

RESULTS

Thirty-day readmission rates were identical between patients undergoing IP-TKA and OP-TKA (3.5% versus 3.5%, P = 1.0). Similarly, there was no significant difference in the incidence of major complications (2.7% versus 2.0%, P = .38), reoperations (1.3% versus 0.8%, P = .44), or mortalities (0.3% versus 0.3%, P = 1.0) within 30 days.

CONCLUSION

Octogenarians undergoing OP-TKA had comparable complication rates to similar patients undergoing IP-TKA. OP-TKA can be performed safely in select octogenarians and age ≥80 years likely does not need to be a uniform contraindication to OP-TKA.

RAPT Scores Predict Inpatient Versus Outpatient Status and Readmission Rates After IPO Changes for Total Joint Arthroplasty: An Analysis of 12,348 Cases

BACKGROUND

Changes to Medicare's Inpatient Only List (IPO) and factors associated with the COVID pandemic have led to more total joint arthroplasty (TJA) patients to be designated as outpatient (OP). This potentially complicates postoperative care for patients with lower functional status and poor social support. These factors make the decision between OP versus inpatient (IP) designation particularly challenging for healthcare teams. The Risk Assessment and Prediction Tool (RAPT) was designed to indicate patient risk for needing posthospital discharge to facility and considers social and functional factors. The purpose of this study is to 1) evaluate the correlation of RAPT as a clinical tool to aid decision-making regarding OP versus IP for Total Hip and Knee Arthroplasty (THA and TKA), 2) assess the impact of recent changes to the IPO and the COVID pandemic on OP TJA readmission rates, and 3) determine whether 90-day readmissions are correlated with RAPT scores after OP TJA.

METHODS

We identified all elective TKA and THA patients from 2015 through 2021 in our electronic health record at our large, urban, academic health system. Fracture patients were excluded. For those patients with available RAPT scores, we determined OP and IP designations, with IP defined as those with length-of-stay 2 midnights or more. We performed subanalysis of OP between same-day and next-day discharge. RAPT scores and readmission rates were compared at time points related to changes in the IPO: before TKA removal in 2018 (period A), from 2018 until THA removal in 2020 (Period B), and after January 1, 2020, inclusive of impact from the COVID pandemic (Period C).

RESULTS

Reviewed were 11,819 elective TKAs and 10,212 elective THAs. RAPT scores were available for 6,759 TKA patients and 5,589 THA patients. For both TKA and THA, RAPT scores between IP, same-day, and next-day discharged OP were significantly different across all time periods (P < .001). The percentage of OP designation increased across all time periods for TKA and THA. Over these same time periods, mean RAPT scores decreased significantly for both OP TKA and OP THA (P < .01). Concurrent with these changes were significant increases in OP THA 90-day readmission rates across Periods A and B (P = .010) as well as A and C (P = .006). Readmitted OP TKA had significantly lower RAPT scores than OP TKA without readmission during Period B (P < .001). Readmitted OP THA had significantly lower RAPT scores than those without readmission for all periods (P < .05). To facilitate clinical utility, median RAPT scores were also analyzed, and showed that RAPT scores for OP THA patients with readmission were 1 to 2 points lower for all time periods.

CONCLUSION

RAPT scores correlate with IP versus OP status for both TKA and THA and vary significantly with same-day versus next-day discharge. OP TJA RAPT scores may also help predict readmission, and counsel some patients away from OP surgery. Average RAPT scores of 10, 9, and 8 appeared to be separators for same day, next day, and inpatient stay. Changes to the IPO and COVID pandemic correlate with decrease in RAPT scores for both TKA and THA patients within all designations. In addition, a shift toward lower RAPT for OP TJA correlates with increased 90-day readmission rates for OP TJA. Taken together, these results suggest that patients with poorer function and worse social support systems are increasingly being driven toward OP surgery by these changes, which may play a role in increasing readmission rates. Social support and functional factors should be considered for OP elective TKA and THA. Further, any OP TJA value-based payment system must account for these variables.

Increased Patient-Level Payment After Removal of Total Knee Arthroplasty From the Inpatient-Only List

BACKGROUND

In January 2018, the Centers for Medicare and Medicaid Services removed total knee arthroplasty (TKA) from the Inpatient Only (IPO) list. This study aimed to compare patient-level payments in TKA cases with a length of stay (LOS) <2 midnights before and after removal of TKA from IPO list.

METHODS

In this retrospective cohort study, all Medicare patients who received a primary elective TKA from 2016-2019 with a LOS <2 midnights at an academic tertiary center were identified. Total and itemized charges and patient-level payments were compared between eligible TKA cases performed in 2016-2017 and those in 2018-2019. There were 351 eligible TKA cases identified: 151 in 2016-2017 and 200 in 2018-2019.

RESULTS

The percentage of patients making any out-of-pocket payment increased in 2018-2019 from 2016-2017 (51.0% versus 10.6%), as did median patient-level payment ($7.30 [range, $0.00-$3,389] versus $0.00 [range, $0.00-$1,248], P < .001 for both). A greater proportion of patients in 2018-2019 paid $1-$50 than in 2016-2017 (37.5% versus 1.3%, P < .001) with no change in the proportion of patients who made payments >$50. Total charges were less in 2018-2019 than in 2016-2017 (P = .001). Charges for drugs, laboratory tests, admissions/floor, and therapies decreased in 2018-2019, whereas charges for the operating room and radiology increased (P < .001 for all).

CONCLUSION

Patients receiving outpatient TKA in 2018-2019 were more likely to have out-of-pocket payments than patients with comparable hospital stay who were designated as inpatients, although most of these payments were less than $50.

Identifying and Creating Value for Employed Arthroplasty Surgeons in an Era of Decreasing Reimbursement

Recent regulatory changes made by the Center for Medicare and Medicaid Services (CMS) will result in a 9% decrease in reimbursement for hip and knee replacements by the end of 2022. Combining this with CMS's recent removal of total knee and total hip arthroplasty from the inpatient-only list has begun to take effect on the bottom line for hospital systems, which now employ around 50% of the arthroplasty community. Employed joint replacement surgeons should continue to innovate and be leaders within their hospital systems in the outpatient and ambulatory surgery space to recoup lost value, increase autonomy, and should be compensated for this work. Employed arthroplasty surgeon leaders can better align goals with and control the narrative in the C-suite to redefine their value as the most consistent, dependable, and transparent department within a larger health system or corporate medical group.

Life After BPCI: High Quality Total Knee and Hip Arthroplasty Care Can Still Exist Outside of a Bundled Payment Program

BACKGROUND

Concerns regarding target price methodology and financial penalties have led to withdrawal from Medicare bundled payment programs for total hip (THA) and knee arthroplasty (TKA), despite its early successful results. The purpose of this study was to determine whether there was any difference in patient comorbidities and outcomes following our institution's exit from the Bundled Payments for Care Improvement - Advanced (BPCI-A).

METHODS

We reviewed consecutive 2,737 primary TKA and 2,009 primary THA patients following our withdraw from BPCI-A January 1, 2020-March 30, 2021 and compared them to 1,203 TKA and 1,088 THA patients from October 1, 2018-August 2, 2019 enrolled in BPCI-A. We compared patient demographics, comorbidities, discharge disposition, complications, and 90-day readmissions. Multivariate analysis was performed to identify if bundle participation was associated with complications or readmissions.

RESULTS

Post-bundle TKA had shorter length of stay (1.4 vs 1.8 days, P < .001). Both TKA and THA patients were significantly less likely to be discharged to a rehabilitation facility (5.6% vs 19.2%, P < .001 and 6.0% vs 10.0%, P < .001, respectively). Controlling for confounders, post-bundle TKA had lower complications (OR = 0.66, 95% CI 0.45-0.98, P = .037) but no difference in 90-day readmission (OR = 0.80, 95% CI 0.55-1.16, P = .224).

CONCLUSIONS

Since leaving BPCI-A, we have maintained high quality THA care and improved TKA care with reduced complications and length of stay under a fee-for-service model. Furthermore, we have lowered rehabilitation discharge for both TKA and THA patients. CMS should consider partnering with high performing institutions to develop new models for risk sharing.

Ambulatory shoulder arthroplasty provides a mild reduction in overall cost compared with inpatient shoulder arthroplasty cost of ambulatory shoulder arthroplasty

HYPOTHESIS

The purpose of this study was to determine the relative cost difference of inpatient vs. ambulatory total shoulder arthroplasty (TSA) procedures.

METHODS

A retrospective case series was performed to identify a consecutive series of patients who underwent primary anatomic or reverse TSA at 2 orthopedic specialty hospitals between September 2015 and August 2020. Those undergoing surgery for fracture or revision were excluded. Itemized facility costs were analyzed with a time-driven activity-based costing model and compared between ambulatory and non-ambulatory procedures. Ambulatory patients were defined as those admitted and discharged on the same calendar day. All other patients were considered non-ambulatory.

RESULTS

A total of 1027 patients were analyzed, comprising 38 ambulatory patients (3.7%) and 989 non-ambulatory patients (96.3%). There was a higher proportion of anatomic TSA than reverse shoulder arthroplasty in the ambulatory group (81.6% vs. 51.7%, P < .0001). Overall, there was no difference in cost between the 2 groups ($8832 vs. $8841, P = .97). However, personnel costs were greater in the non-same-day group ($1895 vs. $2743, P < .0001) whereas supply costs were less ($6937 vs. $6097, P < .0003). When implant costs were excluded, outpatient shoulder arthroplasty provided a cost savings of $745.

CONCLUSION

Ambulatory shoulder arthroplasty provides a mild cost savings of $745 after controlling for fixed costs. This is much less dramatic than previously reported and should raise concern as shoulder arthroplasty continues to be targeted by payers as a potential for cost savings through decreased reimbursement.

Same-Day Outpatient Lower-Extremity Joint Replacement: A Critical Analysis Review

➢ The economics of transitioning total joint arthroplasty (TJA) to standalone ambulatory surgery centers (ASCs) should not be capitalized on at the expense of patient safety in the absence of established superior patient outcomes. ➢ Proper patient selection is essential to maximizing safety and avoiding complications resulting in readmission. ➢ Ambulatory TJA programs should focus on reducing complications frequently associated with delays in discharge. ➢ The transition from hospital-based TJA to ASC-based TJA has substantial financial implications for the hospital, payer, patient, and surgeon.

Recent Trends in Private Equity Acquisition of Orthopaedic Practices in the United States

BACKGROUND

Private equity acquisition of medical specialty practices has increased in recent years. With the projected increase in the volume of elective, ambulatory orthopaedic procedures, especially in the outpatient setting, private equity firms are increasingly investing in orthopaedic practices. The purpose of this cross-sectional study was to report recent trends and variations in acquisitions of US orthopaedic practices by private equity firms and other institutional investors (venture capital firms, trusts, and large investment companies).

METHODS

Acquisition data through January 1, 2020, were collected and analyzed using various financial databases, supplemented with publicly available information from financial news outlets, press releases, and financial analyst and industry reports. Disclosed financing data were also included, in addition to pertinent geographic information (state, city, and zip code) of the target practices.

RESULTS

Between 2004 and 2019, 41 orthopaedic practices and surgeon groups across 22 states were acquired by 34 private equity and other investment firms. A significant increase was observed in the number of acquisitions between 2017 and 2019, consisting of 70.7% of total transactions during the study period, with a statistically significant upward yearly trend (P = 0.002). The compound annual growth rate in acquisition volume was 29.2% during the study period. A disproportionate share of private equity acquisitions took place in the South, where more than half (51.2%) of the total transactions took place. Firms were markedly more likely to acquire or invest in practices located in major metropolitan areas (population more than 1 million) compared with those in mid-sized or rural areas (70.7%, 17.1%, 12.2%, respectively; P < 0.001).

CONCLUSIONS

Private equity acquisition of orthopaedic surgery practices has increased markedly in recent years. The effect of private equity acquisition on physician independence, practice management, and procedure reimbursement remains unclear and may be important to explore as practice management evolves.

LEVEL OF EVIDENCE

Prognostic Level III.

A Novel Machine Learning Predictive Tool Assessing Outpatient or Inpatient Designation for Medicare Patients Undergoing Total Knee Arthroplasty

Background

Methods

Results

Conclusions

Improving Arthroplasty Efficiency and Quality Through Concentrating Service Volume by Complexity: Surviving the Medicare Policy Changes

We have an academic medical center (AMC), an associated community-based hospital (CBH) and several ambulatory care centers which are being prepared to provide same day discharge (SDD) total joint arthroplasty (TJA) and unicompartmental knee arthroplasty (UKA). The near-capacity AMC cared for medically and technically complicated TJA patients. The CBH wanted to increase volume, improve margins, and become a center of excellence with an efficient hospital outpatient department and SDD TJA experience.

METHODS

We transitioned primary, uncomplicated TJA, UKA, and minimally invasive TJA to the CBH. Revision surgeries, patients with extensive comorbidities, and complex primaries were performed at the AMC. Protocols were developed to facilitate SDD UKA and total hip arthroplasty (THA) as well as rapid recovery protocols for total knee arthroplasty (TKA) at both hospitals. A protocol-based system was put in place to make both hospitals ready for the removal of TKA from the Inpatient-Only list to avoid Quality Improvement Organization and possible resultant Recovery Audit Contractor audits if referred after implementation.

RESULTS

The CBH volume increased 36.7% (+239). AMC volume slightly decreased (-0.46%, -5) resulting in an increase in margin contribution for the system. CBH quality metrics (surgical site infections, length of stay, readmissions, and mortality) were improved. Surgeon satisfaction improved as their volume, efficiency, quality metrics, and finances were enhanced. Although CBH per case revenue was 80.3% and 74.4% of the AMC for THA and TKA, net margins were 3.6% and 18.8% higher for THA and TKA, respectively. Increased efficiency, lower hospital cost, and higher volume at the CBH allowed for an increase in revenue despite lower reimbursement per case.

CONCLUSION

This strategy will help hospital systems improve net margins while improving patient care despite lower net revenue per TJA episode. These strategies will become increasingly important going forward with the transition of higher numbers of TJA patients to outpatient which will be subjected to further decreases in net revenue per patient.

Out-of-Network Facility Charges for Patients Undergoing Outpatient Total Joint Arthroplasty

BACKGROUND

The utilization of outpatient (OP) total joint arthroplasty (TJA) is increasing. Although many arthroplasty surgeons and hospitals have longstanding agreements with insurance companies, it may take time for ambulatory surgery centers (ASCs) to establish in-network agreements. The purposes of this study are to investigate trends in out-of-network facility charges for OP-TJA, as well as compare rates of out-of-network facilities between ASC and hospital outpatient department (HOPD) OP-TJA.

METHODS

This is a retrospective study of the MarketScan commercial claims database of OP-TJAs (same-day discharge) performed at ASCs or HOPDs from 2007 to 2017. Detailed demographic, geographic, operative, insurance, temporal, and financial details were collected. Out-of-network facility utilization was trended over time. Adjusted regressions compared the prevalence of out-of-network facilities between ASCs and HOPDs.

RESULTS

There were 13,031 OP-TJA patients (58.8% total knee arthroplasty). Utilization of out-of-network facilities significantly decreased over time, from 27.8% of surgeries in 2007 to 9.5% in 2017 (P_trend < .001); however, this was non-linear with a significant increase in 2013-2015 corresponding to rising use of out-of-network ASCs. Patients treated at ASCs were significantly more likely to be out-of-network than those treated at HOPDs (odds ratio 4.88, 95% confidence interval 4.28-5.57, P < .001; odds ratio 7.70, 95% confidence interval 6.42-9.25, P < .001 among the 11,870 patients with in-network surgeons). About 10.4% of patients with in-network surgeons were treated at out-of-network facilities.

CONCLUSION

Although the utilization of out-of-network facilities has decreased, over 10% of patients with in-network surgeons face out-of-network facility charges, which may often come as a surprise. Efforts are warranted to reduce the out-of-network facility burden for OP-TJA patients, including accelerating insurance contracting and reviewing patients' coverage statuses.

Amount of CMS Reduction in Facility Reimbursement Following Removal of Total Hip Arthroplasty From the Inpatient-Only List Far Exceeds Reduction in Actual Care Cost

BACKGROUND

Starting in 2020, Centers for Medicare and Medicaid Services (CMS) removed total hip arthroplasty (THA) from the inpatient-only list, resulting in an average of $1637 per case reduction in facility reimbursement. The purpose of this study is to determine whether the reduction in reimbursement is justified by comparing the difference in true facility costs between inpatient and outpatient THA.

METHODS

We identified a consecutive series of 5271 primary THA procedures from 2015 to 2019. Itemized procedural costs were calculated using a time-driven activity-based costing algorithm. Outpatient procedures were defined as those with less than a 24-hour length of stay. We compared patient demographics, comorbidities, and itemized costs between inpatient and outpatient procedures. A multivariate analysis was performed to determine the independent effect of outpatient status on true facility costs.

RESULTS

There were 783 (14.9%) outpatient THA procedures. The outpatient THA procedures incurred lower mean personnel ($1428 vs $2226, P < .001), supply ($4713 vs $4739, P < .001), and overall facility costs ($6141 vs $6595, P < .001) when compared with the same THA procedures done inpatient. When controlling for confounding variables, outpatient status was associated with a reduction in total facility costs of $825 (95% confidence interval, $734-$916, P < .001).

CONCLUSION

The reduction in CMS reimbursement far exceeds the $825 per-patient cost savings that can be achieved by a facility by performing THA as an outpatient. CMS should reconsider the Outpatient Prospective Payment System classification of THA to better incentivize surgeons to perform THA as a lower-cost outpatient procedure when safe and appropriate.

Despite Equivalent Medicare Reimbursement, Facility Costs for Outpatient Total Knee Arthroplasty Are Higher Than Unicompartmental Knee Arthroplasty

BACKGROUND

With the recent removal of total knee arthroplasty (TKA) from the Centers for Medicare and Medicaid Services (CMS) Inpatient Only list, facility reimbursement for outpatient TKA now falls under the Outpatient Prospective Payment System at the same rate as unicompartmental knee arthroplasty (UKA). The purpose of this study was to compare true facility costs of patients undergoing outpatient TKA with those undergoing UKA.

METHODS

We reviewed a consecutive series of 2310 outpatient TKA and 231 UKA patients from 2018 to 2019. Outpatient status was defined as a hospital stay of less than 2 midnights. Facility costs were calculated using a time-driven, activity-based costing algorithm. Implants, supplies, medications, and personnel costs were compared between outpatient TKA and UKA patients. A multivariate analysis was performed to control for confounding medical and demographic variables.

RESULTS

When compared with patients undergoing UKA, outpatient TKA patients had higher implant costs ($3403 vs $3081; P < .001) and overall hospital costs ($6350 vs $5594; P < .001). Outpatient TKA patients had a greater length of stay (1.2 vs 0.5 days; P < .001) and greater postoperative personnel costs ($783 vs $166; P < .001) than UKA patients. When controlling for comorbidities, outpatient TKA was associated with a $803 (P < .001) increase in overall facility costs compared with UKA.

CONCLUSION

Despite equivalent reimbursement from CMS as UKA, outpatient TKA has increased facility costs to the hospital. Although implant costs can vary greatly by institution, CMS should consider appropriately reimbursing outpatient TKA for the additional personnel costs when compared with UKA.

From Winners to Losers: The Methodology of Bundled Payments for Care Improvement Advanced Disincentivizes Participation in Bundled Payment Programs

BACKGROUND

The Bundled Payments for Care Improvement (BPCI) initiative improved quality and reduced costs following total hip (THA) and knee arthroplasty (TKA). In October 2018, the BPCI-Advanced program was implemented. The purpose of this study is to compare the quality metrics and performance between our institution's participation in the BPCI program with the BPCI-Advanced initiative.

METHODS

We reviewed a consecutive series of Medicare primary THA and TKA patients. Demographics, medical comorbidities, discharge disposition, readmission, and complication rates were compared between BPCI and BPCI-Advanced groups. Medicare claims data were used to compare episode-of-care costs, target price, and margin per patient between the cohorts.

RESULTS

Compared to BPCI patients (n = 9222), BPCI-Advanced patients (n = 2430) had lower rates of readmission (5.8% vs 3.8%, P = .001) and higher rate of discharge to home (72% vs 78%, P < .001) with similar rates of complications (4% vs 4%, P = .216). Medical comorbidities were similar between groups. BPCI-Advanced patients had higher episode-of-care costs ($22,044 vs $18,440, P < .001) and a higher mean target price ($21,154 vs $20,277, P < .001). BPCI-Advanced patients had a reduced per-patient margin compared to BPCI ($890 loss vs $1459 gain, P < .001), resulting in a $2,138,670 loss in the first three-quarters of program participation.

CONCLUSION

Despite marked improvements in quality metrics, our institution suffered a substantial loss through BPCI-Advanced secondary to methodological changes within the program, such as the exclusion of outpatient TKAs, facility-specific target pricing, and the elimination of different risk tracks for institutions. Medicare should consider adjustments to this program to keep surgeons participating in alternative payment models.

Medicare Total Knee Arthroplasty Patients Need Not Stay 2 Midnights for Full Facility Reimbursement

BACKGROUND

Health care systems are concerned that facility reimbursements will be reduced based on patient length of stay (LOS) of <2 midnights with the removal of total knee arthroplasty (TKA) from the inpatient-only list. The purpose of this study was to evaluate the effect of LOS and postdischarge disposition on facility reimbursement.

METHODS

We evaluated a consecutive series of 470 primary Medicare TKA patients performed at a single institution from 2018 to 2019. We analyzed facility reimbursement based on patient LOS and discharge disposition. Descriptive statistics were analyzed using chi-square test, analysis of variance, and Student t test calculations.

RESULTS

Overall, the facility was fully reimbursed in 401 patients (85%) at a mean of $11,169. The facility received full reimbursement for 323 of 326 (99%) patients with an LOS of <2 midnights who were discharged to home at a mean of $11,156. This reimbursement was significantly (P < .001) higher than patients who had an LOS <2 midnights who were discharged with home health (mean, $9773) or to a facility (mean, $10,095). For those with LOS >2 midnights, there was no difference in mean reimbursement among discharge dispositions ($11,202 vs $11,249 vs $11,085, P = .65).

CONCLUSION

In this study, Medicare TKA patients with LOS <2 midnights were fully reimbursed 99% of the time as an inpatient as long as they are discharged to home without home health or to a rehabilitation facility. Those discharged before 2 midnights who require home health service or inpatient facility are more likely to be reimbursed at a lower penalized rate.

Are We at the Bottom? BPCI Programs Now Disincentivize Providers Who Maintain Quality Despite Caring for Increasingly Complex Patients

BACKGROUND

The Bundled Payments for Care Improvement (BPCI) initiative has been successful at reducing Medicare costs after total joint arthroplasty (TJA). Target pricing is based on each institution's historical performance and is periodically reset. The purpose of this study was to examine the performance of our BPCI program accounting for patient complexity, quality, and resource utilization.

METHODS

We reviewed a consecutive series of 9195 Medicare patients undergoing primary TJA from 2015 to 2018. Demographics, comorbidities, and readmissions by year were compared. We then examined 90-day episode-of-care costs, changes in target price, and financial margins during the duration of the BPCI program using Medicare claims data.

RESULTS

Patients undergoing TJA in 2018 had a higher prevalence of diabetes and cardiac disease (all P < .001) as compared with those in 2015. From 2015 to 2018, there was a decrease in the rate of discharge to rehabilitation facilities (23% vs 14%, P < .001) and length of stay (2.1 vs 1.7 days, P < .001) with no difference in readmissions (6% vs 6%, P = .945). There was a reduction in postacute care costs ($6076 vs $4,890, P < .001) and 90-day episode-of-care costs ($19,954 vs $18,449, P < .001). However, the target price also decreased ($22,280 vs $18,971, P < .001), and the per-patient margin diminished ($2683 vs $522, P < .001).

CONCLUSION

Surgeons have maintained quality of care at a reduced cost despite increasing patient complexity. The target price adjustments resulted in declining margins during the course of our BPCI experience. Policy makers should consider changes to target price methodology to encourage participation in these successful cost-saving programs.

Economic Analysis and Clinical Outcomes of Short-Stay Versus Inpatient Total Ankle Replacement Surgery

BACKGROUND

We aimed to perform an economic analysis and compare the clinical outcomes between inpatient and short-stay designation total ankle replacement (TAR).

METHODS

We performed a retrospective study on 178 consecutive patients undergoing primary inpatient versus short-stay designation TAR during the 2016 and 2017 fiscal years. Patient demographics, concomitant procedures, perioperative complications, patient-reported outcomes, and perioperative costs were collected.

RESULTS

The mean age of our cohort was 62.5 ± 9.6 years (range, 30-88 years), with a significant difference in age (64.1 vs 58.5 years) (P = .005) and Charlson Comorbidity Index (3.3 ± 1.9 vs 2.3 ± 1.4; P = .002) for the inpatient and short-stay designation groups, respectively. At a mean follow-up of 29.6 ± 11.8 months (range, 12-52.3 months), there was no difference in complications between groups (P = .97). The inpatient designation TAR group had a worse baseline Short Musculoskeletal Functional Assessment (SMFA) function score (76.1; 95% CI, 70.5-81.6) than the short-stay designation TAR group (63.9; 95% CI, 52.5-75.3) while achieving similar final postoperative SMFA function scores for the inpatient (55.2; 95% CI, 51.1-59.2) and short-stay (56.2; 95% CI, 48.2-64.2) designation TAR groups (P > .05). However, the inpatient designation TAR group showed a significantly greater mean improvement in SMFA function score (20.9; 95% CI, 19.4-22.4) compared with the short-stay designation TAR group (7.7; 95% CI, 3.7-11.1) (P = .0442). The total direct cost was significantly higher for the inpatient designation group ($15 340) than the short-stay designation group ($13 002) (P < .001).

CONCLUSION

While inpatient designation TARs were more comorbid, short-stay designation TARs were associated with a 15.5% reduction in perioperative costs, comparable complication rates, and similar final postoperative patient-reported outcome scores compared with inpatient TARs.

LEVEL OF EVIDENCE

Level III, retrospective comparative study.

Is the New Outpatient Prospective Payment System Classification for Outpatient Total Knee Arthroplasty Appropriate?

BACKGROUND

In 2018, the Centers for Medicare and Medicaid Services removed total knee arthroplasty (TKA) from the inpatient-only list, resulting in payment through the Outpatient Prospective Payment System with an average $3157 reduction. The purpose of this study is to determine if the reimbursement is justified by comparing the difference in facility costs between inpatient and outpatient TKAs.

METHODS

We identified 4496 consecutive primary TKA procedures performed at 2 hospitals from 2015 to 2019. Itemized facility costs were calculated using a time-driven activity-based costing algorithm. Outpatient procedures were defined as those with a length of stay of less than 2 midnights (3851, 86%). Patient demographics, comorbidities, and itemized costs were compared between groups. A multivariate regression analysis was performed to determine the independent effect of outpatient status on true facility costs.

RESULTS

Outpatient TKA patients had lower mean postoperative personnel costs ($1809 vs $947, P < .001), supply costs ($4347 vs $4229, P < .001), and overall total facility costs ($7371 vs $6937, P < .001) than inpatient TKA patients. Controlling for a younger patient cohort with fewer medical comorbidities, outpatient status was associated with a reduction in total facility costs of $972 (95% confidence interval $883-$1060, P < .001) compared to inpatient TKA.

CONCLUSION

Outpatient TKA costs hospitals nearly $1000 per patient less than inpatient TKA, yet the average difference in Medicare reimbursement for an outpatient procedure is $3157 less per patient. Centers for Medicare and Medicaid Services should reconsider the Outpatient Prospective Payment System classification of TKA to better incentivize surgeons to perform TKA as a lower cost outpatient procedure when safe and appropriate.

The Removal of Total Hip and Total Knee Arthroplasty From the Inpatient-Only List Increases the Administrative Burden of Surgeons and Continues to Cause Confusion

BACKGROUND

Several studies have shown that the removal of total knee arthroplasty (TKA) from the Centers for Medicare and Medicaid Services (CMS) inpatient-only (IPO) list has caused confusion among surgeons, hospitals, and patients. The purpose of this study is to determine whether similar confusion was present after CMS recently removed total hip arthroplasty (THA) from the IPO list.

METHODS

We surveyed the American Association of Hip and Knee Surgeons membership via an online web-based questionnaire in February 2020. The 12-question form asked about practice type and the impact that having both THA and TKA removed from the IPO list has had on each surgeon's practice. Responses were tabulated and descriptive statistics of each question reported.

RESULTS

Of the 2847 American Association of Hip and Knee Surgeons members surveyed, 419 responded (14.7% response rate). Three hundred forty-one surgeons (81%) stated that changes to IPO status have increased their practice's administrative burden. Fifty-four percent of surgeons reported that they have needed to obtain preauthorization or appeal a denial of preauthorization for an inpatient total joint arthroplasty at least monthly, while 257 surgeons (61%) have had patients contact their office regarding an unexpected copayment. Despite the commitment of CMS to waiving certain audits for 2 years, 43 respondents (10%) stated they had undergone an audit regarding a patient's inpatient status.

CONCLUSION

The removal of THA and TKA from the IPO list continues to be an administrative burden for arthroplasty surgeons and a source of confusion among patients. CMS should provide additional guidance to address surgeons' concerns about preauthorization for inpatient stays, unexpected patient copayments, and CMS audits.