Hospital revenue at risk in CMS' proposal to move joint replacement to outpatient care
At stake is $3.2 billion in revenue for a one-day length of stay as 80% of revenue for all services is in joint replacement.
The Centers for Medicare and Medicaid Services' push to move procedures from inpatient to less expensive outpatient care continues, with revenue at risk for lucrative joint replacement starting in 2021.
CMS's continued push to the outpatient setting has been going on for some time, but the agency has found its sea legs in the recent hospital outpatient prospective payment system proposed rule, according to Stuart Clark, a managing director for the Advisory Board Company, in an August 27 presentation on payment updates.
CMS is slowly phasing out the inpatient only list over the next three years and is adding more services to the ambulatory surgical center list. There's around 1,400 total codes on the list right now which are expected to be phased out by 2024.
For 2021, CMS has added 11 new procedures to the ASC list, including musculoskeletal services and total hip replacement.
WHY THIS MATTERS
Eighty percent of hospital revenue for all services is in joint replacement. At stake is $3.2 billion in revenue for a one-day length of stay.
Per hospital, 12-15 procedures may shift from a one-day stay to outpatient, according to Clark and Shay Pratt, vice president of Strategy and Service Line Research for the Advisory Board.
Hospitals may not see a huge amount of revenue at risk if they can continue to keep the services in-house, but in an outpatient setting.
However, there is less revenue to be made from the move to a lower-cost-care setting. And an estimated 83% of ambulatory surgical centers are physician-owned.
There is still debate on the efficacy of total hip replacement done as an outpatient service. Commercial payers say ASCs can provide total hip replacement, while opponents say they are not equipped for the service, according to the Advisory Board.
The comment period for the proposed rule is set to close on October 5.
Next year, CMS is expected to add cardiovascular services to the outpatient list, but the volume and revenue is not on as large a scale as joint replacement.
THE LARGER TREND IN TELEHEALTH
In telehealth, CMS is implementing incremental change as its use has increased dramatically during the coronavirus pandemic.
For Medicare reimbursement, 22 services have been added to the telehealth list. Of these, nine codes have been added permanently and 13 are approved through the end of the year in which the public health emergency ends.
Audio-only services are eligible under the public health emergency, but CMS is inviting input on how long they should remain eligible. The agency has said it's uncertain about the value of an audio-only visit.
Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com
