Introduction

In November 2017, the Center for Medicare and Medicaid Services (CMS) finalized the 2018 Medicare Outpatient Prospective Payment System rule that removed total knee arthroplasty (TKA) procedures from the Medicare inpatient-only (IPO) list of procedures. This action had significant and unexpected consequences.

For several years, CMS has utilized a rule called the “Two-Midnight Rule” to define outpatient status for all procedures not on the IPO list. CMS made TKA subject to the “Two-Midnight Rule” in conjunction with the decision to move TKA off the IPO list. According to the “Two-Midnight Rule,” a hospital admission should be expected to span at least two midnights in order to be covered as an inpatient procedure. If it can be reliably expected that the patient will not require at least two midnights in the hospital, the “Two-Midnight Rule” suggests that the patient is considered an outpatient and is therefore subject to outpatient payment policies. Under prior guidance related to the “Two-Midnight Rule;” however, CMS also states that Medicare may treat some admissions spanning less than two midnights as inpatient procedures if the patient record contains documentation of medical need. The final rule was clear in stating CMS's expectation was that the great majority of TKAs would continue to be provided in an inpatient setting.

Aims. The purpose of this study was to determine the impact of the removal of total knee arthroplasty (TKA) from the Medicare Inpatient Only (IPO) list on our Bundled Payments for Care Improvement (BPCI) Initiative in 2018. Methods. We examined our institutional database to identify all Medicare patients who underwent primary TKA from 2017 to 2018. Hospital inpatient or outpatient status was cross-referenced with Centers for Medicare & Medicaid Services (CMS) claims data. Demographics, comorbidities, and outcomes were compared between patients classified as ‘outpatient’ and ‘inpatient’ TKA. Episode-of-care BPCI costs were then compared from 2017 to 2018. Results. Of the 2,135 primary TKA patients in 2018, 908 (43%) were classified as an outpatient and were excluded from BPCI. Inpatient classified patients had longer mean length of stay (1.9 (SD 1.4) vs 1.4 (SD 1.7) days, p < 0.001) and higher rates of discharge to rehabilitation (17% vs 3%, p < 0.001). Post-acute care costs increased when comparing the BPCI patients from 2017 to 2018, ($5,037 (SD $7,792) vs $5793 (SD $8,311), p = 0.010). The removal of TKA from the IPO list turned a net savings of $53,805 in 2017 into a loss of $219,747 in 2018 for our BPCI programme. Conclusions. Following the removal of TKA from the IPO list, nearly half of the patients at our institution were inappropriately classified as an outpatient. Our target price was increased and our institution realized a substantial loss in 2018 BPCI despite strong quality metrics. CMS should address its negative implications on bundled payment programmes. Cite this article: Bone Joint J 2020;102-B(6 Supple A):19–23

At our tertiary, large, academic healthcare system, we have access to an academic medical center (AMC), a community based, orthopedic friendly, efficient hospital (CBH) and several ambulatory care centers (ASC) which are being prepared to provide same day discharge (SDD) TJA and UKA. We had a near-capacity AMC with an excellent ability to care for medically and technically complicated TJA patients. However, efficiency was less than desired regardless of case complexity with an average effective case time of 4 hours. Concurrently, the orthopaedically, under-utilized community-based hospital (CBH) wanted to increase volume, improve margins, and become a TJA Center of Excellence with the ability to provide an efficient Hospital Outpatient Department (HOPD) and SDD TJA surgery experience. Methods. The CBH had a main operating floor and a separate floor of four OR suites which were repurposed with the goal of utilizing these rooms for TJA four days per week with an average of 3.5 cases per room per day. We preferentially performed primary, uncomplicated TJA, UKA, and minimally invasive TJA at the CBH. Revision surgeries, patients with extensive medical comorbidities, and complex primary surgeries would be performed at the AMC. Our goals were to decrease costs, readmissions, length of stay, and increase margins at the CBH while increasing efficiency, revenue and volume. Protocols were developed to facilitate SDD UKA and THA at both hospitals as well as rapid recovery protocols for TKA at both hospitals with the understanding that the CBH would perform more of these cases but the efficiency could also be implemented at the AMC when possible. We also needed a strategy to deal with TKA and eventually THA being removed from the Inpatient Only (IPO) list. CMS has utilized the “Two-Midnight Rule” to define outpatient status for both THA and TKA. This has distinct financial implications for the facility's reimbursement with outpatient being $10,123 on average versus $12,380 for inpatient status. A protocol-based system was put in place to make both hospitals compliant with the removal of TKA from the IPO List in order to avoid Quality Improvement Organization (QIO) and Recovery Audit Contractor (RAC) after implementation. Results. Comparing FY 2018 to FY 2019, volume increased 26.4% at the CBH. Outpatient case volume rose substantially from 14 cases to 243. Volumes were slightly decreased at the AMC (−4.57%) resulting in a substantial increase in margin contribution for the parent enterprise. Quality metrics at the CBH (surgical site infections (SSI), length of stay (LOS), readmissions, and mortality) were improved. LOS improved from 52% to 71% discharge before 48 hours. The LOS decreased 12% for THA and 8.1% for TKA. CBH readmission rates decreased from 1.38% to 0.9% with no deaths. Surgeon satisfaction is greatly improved as their volume, efficiency, quality metrics, and finances were enhanced. Financial performance was improved in aggregate and per case for the CBH. Although the CBH per-case revenue was 80.3% and 74.4% of the AMC for THA and TKA: the net margins were 3.6% and 18.8% higher for THA and TKA, respectively. The increased efficiency, lower hospital cost and higher volume at the CBH allowed for an increase in revenue despite lower reimbursement per case. Conclusions. A shifting reimbursement landscape, value-based payment initiatives, and increasing volume have challenged traditional TJA delivery systems. This demonstrates one strategy to 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 settings including ambulatory surgery centers which will be subjected to even further decreases in net revenue per patient

Aims

To identify variables independently associated with same-day discharge (SDD) of patients following revision total knee arthroplasty (rTKA) and to develop machine learning algorithms to predict suitable candidates for outpatient rTKA.

Aims

There is concern that aggressive target pricing in the new Bundled Payment for Care Improvement Advanced (BPCI-A) penalizes high-performing groups that had achieved low costs through prior experience in bundled payments. We hypothesize that this methodology incorporates unsustainable downward trends on Target Prices and will lead to groups opting out of BPCI Advanced in favour of a traditional fee for service.