Proposed Medicare cuts average 8% for orthopedists - up to 21% for arthroplasty

Few orthopedists will end up with the average. Most will see cuts of ‘a lot more or a lot less.’

A series of potential physician payment cuts recently announced by the Centers for Medicare and Medicaid Services could reduce average reimbursements by 8% for orthopedic surgeons.

Combined with other proposed cuts, orthopedists could face a devastating drop in reimbursement.

“You can't look at this one proposed rule in isolation, because there are about four or five rules that come into play,” David A. Lovett, director of the American Academy of Orthopaedic Surgeons’ (AAOS) Washington office, told Orthopedics Today.

Last week, the Centers for Medicare and Medicaid Services (CMS) said that it anticipated a 5.1% reduction to the physician fee schedule on average across all areas of medicine. The schedule is based on a statutory formula and sets the same payment rate for all physicians. The news comes on the heels of additional proposed payment changes.

During the 5-year review of the relative value update committee (RUC), the CMS recommended changes to orthopedic-specific work and practice relative value units (RVU), which would lead to an additional 2% payment cut on average. Some procedures could see far larger cuts.

The Deficit Reduction Act of 2005 also calls for a 1% decrease in physician payments. The bottom line: On average, orthopedic surgeons could see an 8% drop in reimbursements, Robert Jasak, the senior regulatory advisor for the AAOS, told Orthopedics Today. But do not expect the cuts to get applied evenly.

“There are probably few physicians that are going to experience that actual 8% cut,” he said. “For most of them, it’s going to be a lot more or a lot less.”

According to CMS’ five-year review recommendation, reimbursement rates for total knee and hip arthroplasty would drop 21% and 10%, respectively. The rate for hip fracture treatment would decrease 18%. If all of these proposals are enacted, the result could be crushing for hip and knee surgeons.

“If you've got anybody who specializes in just the areas that got hit the hardest, though, they’re going to feel it the most,” Jasak said.

In the past, Congress has intervened and halted negative updates to the physician fee schedule. But even if the agency steps in to block these cuts in the same way this time, “we still have all of these other rules in play,” Lovett said.

He said the AAOS continues to search for solutions to the flawed physician payment formula and works to block other impending cuts.

“We’re working at various levels to not only overturn CMS’ five-year review recommendation; we take issue with CMS’ practice expense rule and this most recent one, too,” he said. “So we're working on all of these proposed cuts.”