Hospital
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Has moving TKA off the CMS inpatient-only list affected bundled payment programs?
It is my understanding that in 2020 the Hospital Outpatient Prospective System rate reimbursement will be $11,899.38 for TKA (CPT code 27447). The final 2020 Ambulatory Payment Classification base rate for CPT code 27447 will be $8,609.17. A ligament reconstruction (CPT code 27429), in comparison, has a reimbursement of $10,717.80. It is my understanding that these rates do not include the professional fee, which is between $1,350 and $1,450 for a TKA. Thus, the reimbursement for a Medicare outpatient TKA is approximately $10,000 including the professional fee. Most orthopedic groups that perform outpatient TKAs state that the average cost including all direct, indirect and variable expenses is approximately $9,000 unless fixed costs are not included in the analysis or if prosthetic costs are reduced significantly. This is not, as yet, a bundled payment reimbursement. If that were the case, it would be imperative for the group to have a “stop loss insurance policy” that would cover the costs of an “unintended complication” in the first 90 days postoperatively. Commercial bundles for TKA typically vary between $18,000 and $27,000. Thus, there is a significant amount of difference between the hospital reimbursement, the Hospital Outpatient Prospective System rate and the ASC base rate for a TKA. Unless a significant number of TKAs with good outcomes at a low cost are ensured, I am not convinced Medicare outpatient ASC TKA is going to become popular among surgeons who have an ownership interest in ASCs. However, bundled payment commercially based outpatient TKA will continue to increase due to the improved profitability and desirability of providing this procedure in optimized patients.