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Issue: April 2020
Disclosures: Iorio owns stock options in Muve Health. Vaccaro is president of Rothman Orthopaedic Institute, which owns physician hospitals and ASCs. Barnes, Davis and Hecht report no relevant financial disclosures.
April 17, 2020
10 min read

Outpatient TKA paves way for THA, spine procedures

Issue: April 2020
Disclosures: Iorio owns stock options in Muve Health. Vaccaro is president of Rothman Orthopaedic Institute, which owns physician hospitals and ASCs. Barnes, Davis and Hecht report no relevant financial disclosures.
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On Jan. 1, 2018, CMS removed total knee arthroplasty from the inpatient-only list for Medicare beneficiaries, which created a significant change for surgeons, patients and hospitals in part due to the implementation of the Two-Midnight Rule. Despite efforts by CMS to provide some clarity in this regard, it remained somewhat unclear to hospitals and physicians which patient cases should be coded as inpatient or outpatient, and many of them were identified on a case-by-case basis where a given surgery would be performed.

“Prior to [the ruling], all total knee arthroplasties were on the inpatient-only list and that meant that, for Medicare patients, regardless of how long they stayed in the hospital, their admission status was inpatient as opposed to being outpatient or what is called outpatient extended recovery or OPER,” Charles M. Davis III, MD, PhD, chief of the division of hip and knee arthroplasty at Penn State Health Milton S. Hershey Medical Center, told Orthopedics Today.

However, Davis said after the ruling took effect “it become much more complicated” because patients were considered outpatient or OPER unless they stayed in the hospital for two midnights. Exclusions to this rule included patients with medical conditions that necessitated an inpatient level of care who were then considered inpatient “even if they were only in the hospital for one midnight,” according to Davis. But these case-by-case exceptions were not well defined, Davis noted and he said the fear of quality improvement organization audits made it difficult for hospitals to determine which patients qualified for inpatient or outpatient status.

Charles M. Davis III, MD, said readmission and complication rates associated with outpatient orthopedic procedures that were once on the CMS inpatient-only list do not appear to be increasing nationally. However, surgeons should continue to monitor these rates as CMS transitions other procedures to the ASC setting.

Source: Karyn Miller

“As a result of that, there were a lot of different approaches taken by hospitals to characterize these patients,” Davis said. “Some hospitals made all patients outpatients or OPER unless they stayed two nights; some hospitals made everyone an inpatient even though they did not stay two midnights; and some hospitals did it selectively based on the patient’s medical conditions,” he said.

A study by C. Lowry Barnes, MD, chair of department of orthopedic surgery at University of Arkansas for Medical Sciences College of Medicine, and colleagues in the Journal of Arthroplasty highlighted the indecision among hospitals on how to code patients undergoing TKA in an outpatient setting. Barnes and colleagues found 25% of hospitals did not code any primary Medicare TKAs as outpatient when they calculated the percent of these procedures performed in the United States from January 2018 through March 2019. Results also showed the median hospital coded 12% of cases as outpatient, the 75th percentile hospital coded 49% as outpatient and the 90th percentile hospital coded 78% as outpatient.


“One thing we have learned is that we need better guidelines from CMS,” Barnes, president of the American Association of Hip and Knee Surgeons, said. “Just to take a procedure off the inpatient-only list with no real guidelines as to who should be inpatient and who should be outpatient after the change is made is a real challenge. For many diagnoses, the rule has always been the Two-Midnight Rule and that is challenging for us since many of these patients do go home the next day, but we never know for sure which one of those are going to [do that].”

Outpatient THA, spine procedures

Some sources who spoke with Orthopedics Today believe the reactions the health care system had to the removal of TKA from the inpatient-only list may foreshadow the reactions to the removal of total hip arthroplasty and certain spine procedures from the inpatient-only list, a change that went into effect Jan. 1, 2020.

“I think we are going to see the same thing we saw with total knees in that the same rules apply,” Barnes said. “Some hospitals will continue to treat these patients as inpatients, others will move them all to outpatients and others will be somewhere in between.”

When deciding whether a patient may be a candidate for outpatient THA or spine procedure, sources who spoke with Orthopedics Today noted surgeons need to perform a careful assessment of the patient.

Davis noted such an assessment includes evaluating patient morbidities, risk for complications and functional status.

In addition to the hospital administration and staff having buy-in to outpatient surgery, Alexander R. Vaccaro, MD, PhD, MBA, president of Rothman Orthopaedic Institute, noted patients and their families also need to buy into and understand the purpose and benefits of moving to an outpatient procedure.

Barnes noted getting such patient and family buy-in can be achieved through education.

“Whether they are done as an outpatient or as an inpatient with a short stay, there needs to be an educational program,” Barnes said. “Patients come to a class prior to their hip or knee replacement, they bring their coach with them, usually a family member who is going to be helping take care of them after surgery, and they go through an hour or so in an interactive class teaching them what is expected of them before and after their surgery.”

Procedure considerations

Several sources also noted surgeons must take the type of procedure being performed into consideration. For spine procedures, the recent removal from the inpatient-only list included arthrodesis, combined posterior or posterolateral technique with posterior interbody technique, including laminectomy and/or discectomy that is sufficient to prepare the lumbar interspace and segment and each additional interspace and segment (CPT codes 22633 and 22634); cervical laminectomy (CPT code 63265); thoracic laminectomy (CPT code 63266); lumbar laminectomy (CPT code 63267); and extradural laminectomy (CPT code 63268).


Among non-Medicare patients, Andrew C. Hecht, MD, chief of spine surgery and professor of orthopedics and neurosurgery at Mount Sinai Hospital and Health System, noted the most common spine procedures being performed in the ASC setting include lumbar microdiscectomy, cervical foraminotomy, one- or two-level lumbar laminectomy, anterior cervical discectomy and fusion at one level, and cervical disc replacement. Although some surgeons have considered performing minimally invasive transforaminal lumbar interbody fusion in an outpatient setting, Hecht said it depends on the patient, with many older patients needing extra care or having additional medical issues that require an overnight stay compared with younger patients.

“It is not for everyone, and it has to be carefully thought through. I would rather see surgeons err on the side of being conservative than pushing the envelope,” Hecht, an OrthopedicsToday Editorial Board Member, said.

Vaccaro said he would advise against performing procedures that access the anterior part of the thoracic and lumbar spine in a surgical center that does not have appropriate medical support for complications that may occur, such as a vessel injury. He noted he would also avoid performing a posterior cervical laminectomy and fusion mainly because these patients often require a drain for a day or two to prevent a symptomatic hematoma.

C. Lowry Barnes

“Other cases that are large cases that surgeons would probably not want to do would be a scoliosis operation. Surgeons would not want to do anything more, in general, than a two-level anterior cervical decompression and fusion,” Vaccaro said. “It does not mean they cannot, but they want to consider that the patient may have swallowing difficulties with a multi-level procedure.”

Davis noted surgeons should monitor readmission and complication rates among patients undergoing outpatient surgery to ensure those rates are not increasing beyond what they usually are with these procedures.

“I do not think we have seen that nationally thus far, but I think that that needs continued monitoring, as well as the long-term outcomes,” Davis said.

Choose the best location

Hecht noted there are three main places where orthopedic surgeons can perform outpatient surgery: in a hospital as an outpatient, in an ASC attached to a hospital or in a freestanding ASC.

If the procedure is being performed in a hospital, Barnes noted the entire team “from the check-in desk at the hospital up to the last person who sees the patients before they leave” needs to be involved and understand the outpatient surgery process.


“If the patient is getting mixed messages about how long they are going to be in the hospital, whether they are an inpatient or outpatient, what kind of therapy they need, where they need to go to rehabilitation, etc., it only takes one person who is off-message, and the patient and their family is confused. So, it is important everybody is singing from the same song book,” Barnes told Orthopedics Today.

If surgery is performed in a freestanding ASC, Richard Iorio, MD, said surgeons should have a transfer agreement with a hospital in place in the event there is a complication during surgery, such as a cardiovascular or vascular incident.

“If somebody has a stroke or a cardiac event, there is no facility [at an ASC] to do interventional cardiology. [The patient] has to go to a hospital, to transfer,” Iorio, chief, adult reconstruction and total joint arthroplasty service of orthopaedic surgery, Brigham and Women’s Hospital, said. “All of the stuff that is in a big hospital that makes it cost more is not available at the ASC or in an outpatient department that is not attached to a hospital.”

Alexander R. Vaccaro

Another option for freestanding ASCs is to have an observational unit for 23-hour observations, according to Hecht.

Vaccaro said some freestanding ASCs are now being designed with extended care suites for patients who may benefit from an extended stay for medical reasons or observations.

“Some elderly patients may need an extra day to ambulate safely and acclimate to home care. In this situation, instead of an expensive inpatient stay, the patient will receive additional therapy without the undue expense experienced with a hospital admission,” he said.

As CMS continues to transition outpatient procedures to ASCs, Davis said surgeons need to assess patient resources at home before deciding where to perform the surgery.

“I think it is incumbent on surgeons to carefully select the patients who may [be in same-day surgery centers outside of hospitals], so patients are getting their procedure in the ... setting that is safest for them,” Davis said. “To have patients go home earlier does require more preoperative preparation for the patients and the surgeons. Surgeons have to continue to pay attention to the patient social status at home, how much help they have at home ... as well, when making determinations about inpatient vs. outpatient,” he said.

Cost advantages, disadvantages

Iorio believes the health care system has been ready for these changes to the inpatient-only list, which will “have implications on the health and financial welfare of the hospitals.”


“[The CMS outpatient designation] has cut down on the profitability for the hospitals. It saves CMS money, which, in the end, they want to do. They do not want to impact access and they have not so far. In a way, it is a win-win,” Iorio told Orthopedics Today.

Patients are the one group at a disadvantage in terms of outpatient surgery costs, according to Iorio, who noted outpatient procedures are subject to a higher copay compared with inpatient procedures, which can be up to 20% of the procedure for CMS beneficiaries.

Besides costs, Davis said the removal of THA and spine procedures from the inpatient-only list may create additional preoperative work due to decision-making and challenges for surgeons on whether a patient should be inpatient or outpatient.

“Those decisions do not affect physician reimbursement, but it does create more work for the physicians to try to sort out and deal with compliance departments to figure out the most appropriate admission status,” he said.

Need for guidelines

Currently, surgeons are waiting for CMS to release guidelines to help them better understand how patients undergoing outpatient TKA, THA and spine procedures should be coded across the country, Barnes noted.

“Surgeons want to be in control of their patients, and we feel stuck in between when hospitals are making decisions as to how patients should be treated as inpatient or outpatient,” Barnes said. “If we had the appropriate guidelines, the surgeons could make that decision.”

Andrew C. Hecht

Iorio said specific guidelines from the CMS are also needed regarding proper patient surgical environment based on their comorbidities and how payment would be handled for each case. However, he believes CMS should allow doctors and hospitals to decide on the best location for each patient with the same episode payment based on a 90-day diagnosis-related group for all patients.

“That way, if [surgeons] decide to [operate on a patient] in an ASC and send them home early, [they] will take on the responsibility of taking care of them for the full episode, even if they have complications because of their choice of environment or, if they were sicker, they are taken care of in a more intense delivery site,” Iorio said. “Then, it does not matter how long they stay in the hospital or whether they stay overnight. Surgeons will just take care of the patients and they will [operate on] them in the appropriate setting — tertiary hospital, community or outpatient hospital or ASC, depending on the health of the patient. If the episode pricing is consistent, then the system will determine where the optimal site of surgery is for different comorbidity burdens.”


Even in the absence of such guidelines, Barnes noted surgeons should always put the patient first in their decision-making.

“Regardless of the situation, if the patient is not ready to go home, regardless if they have been billed as an inpatient or outpatient, then do not send them home,” Barnes said. “Take care of the patient and let the other problems solve themselves later.”

With the move of TKA, THA and spine procedures off the inpatient-only list, Vaccaro said the volume of these procedures will increase in the outpatient setting as organizational changes take place.

“We will start learning which patients are safe to do it, which patients are unsafe to do it, what are the operational changes, ie, the support systems you have to design, what type of educational programs have to be instituted and all the stakeholders have to be on the same page, such as anesthesia, the nurses, as well as the physicians, physician assistants and extended-care providers,” Vaccaro said. – by Casey Tingle

Disclosures: Iorio owns stock options in Muve Health. Vaccaro is president of Rothman Orthopaedic Institute, which owns physician hospitals and ASCs. Barnes, Davis and Hecht report no relevant financial disclosures.

Click here to read the Point/Counter to this article "Has moving TKA off the CMS inpatient-only list affected bundled payment programs?"