The future of total joints in the ASC — 6 surgeons weigh in on CMS' 2020 changes

CMS added total knee replacement to the ASC-payables list for 2020, and with it, a flux of patients are expected to migrate to the outpatient space. Centers can capitalize on the extra surgical volume, but Medicare's reimbursement rate will require ASC leaders to eliminate operational waste to fully recognize the opportunity.

In December, an advisory panel of orthopedic surgeons recruited by Becker's ASC Review in collaboration with Johnson & Johnson answered questions about how ASCs can capitalize on total joints in 2020. Participants included:

  • Scott Sigman, MD, of OSA Orthopaedics in Chelmsford, Mass.
  • Niirav Amin, MD, of Providence Health in Orange, Calif.
  • James Ballard, MD, of Oregon City, Oregon-based ROC Orthopedics
  • Chris Nanson, MD, of Portland, Oregon-based Orthopedics Northwest
  • Michael Ast, MD, of New York City-based Hospital for Special Surgery
  • Jaideep J. Iyengar, MD, of San Jose, California-based El Camino Health

While the opportunity from a patient volume perspective is immense, the financial margins are narrow. For total joints to succeed in the outpatient space, Dr. Ballard said physicians will need to standardize the processes and equipment around every procedure. While commercial payers pay higher rates than Medicare at the moment, the volume Medicare presents is unrivaled, even if CMS is only paying $8,609 per case.

"We wish [the reimbursement rate] was higher, but we will make it happen," Dr. Ballard said. "We had 14 knees scheduled for January and we're jumping in the pool headfirst. [These procedures] won't be as profitable as the commercial side but getting the patients into the ASC and away from the hospital is what we need now."

“Implant costs will be the biggest roadblock centers have to address,” Dr. Sigman said.

"There are systems you can implement [around total joint procedures to standardize them], but you have to make sure your implant costs are in line," Dr. Sigman said. "I think you can create good outcomes for your patients while still having profitability."

While the amount ASCs around the nation will collect for total joint replacement will vary, Dr. Nanson believes surgery centers will find success by balancing Medicare cases with commercial cases. He expects commercial rates to remain steady over the next few years.

Dr. Narson said the quality care ASCs provide, as well as their willingness to pursue value-based partnerships will differentiate ASCs from hospitals in the eyes of payers. "I think commercial payers appreciate that, and I think commercial pay stays robust in the total joint market … because they can't afford the hospital anymore," he said.

Dr. Amin agreed that commercial rates will be steady in the coming years, but only if ASCs go the extra mile to highlight the quality of care they provide.

"I think we can uphold value on the commercial side, especially when compared to [hospital reimbursement] for total knees," Dr. Amin said. "If we're able to show the value of care over the next 90 days, I think we can stabilize reimbursement from the commercial side."

As for public payer reimbursements, ASCs can capitalize on CMS' new payment rules for opioid alternatives. In 2019, CMS began making separate payments for nonopioid pain medicine to increase the use of opioid alternatives.

Drs. Sigman and Nanson said they both had outstanding success when it came to using non-opioid alternatives. Dr. Sigman elaborated on his use of non-opioid alternatives to treat pain in revision knee procedure patients, such as EXPAREL® (bupivacaine liposome injectable suspension), from Pacira BioSciences Inc.

"As of Jan. 1, 2019, CMS has provided a J-code to compensate for these very important opioid alternatives that support better patient care," Dr. Sigman said. "For example, with revision surgeries, which have notoriously been very painful, we can mitigate pain using new non-opioid alternatives … I think there's great opportunity to use these drugs for more complex surgeries."

However, not everyone expressed enthusiasm about public payer reimbursement changes. Dr. Ast, for example, cautioned that pursuing Medicare total knee cases may not be a winning strategy for every ASC, arguing that the low reimbursement rate will be a major challenge for total joint adaptation and could endanger patients in the ASC setting.

Some centers may try to increase Medicare volume to overcome the profit margin, which may mean stretching their indications and potentially putting patients at risk," Dr. Ast said.

However, others made the case that success with Medicare total knees now could mean greater success with more total joint procedures in the future. If centers have the same high success rates with Medicare patients as they do a commercial patients, CMS could pivot other joint replacement procedures to the outpatient space, Dr. Iyengar said.

"If CMS recognizes the benefit of adjusting payments for ASC joints to a more reasonable target, this will … provide massive value opportunities for all stakeholders going forward," Dr. Iyengar said.

Orthopedic surgeons have long predicted CMS would migrate other total joint procedures to the ASC setting. In 2020, that vision will become reality. Forward-looking surgery center leaders should assess the financial and clinical viability of performing these procedures in their facilities and prepare accordingly.

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