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CMS to Raise Ankle Bundle Reimbursement

News  |  By Philip Betbeze  
   September 18, 2017

Physician: The reimbursement increase should make total ankle replacement “rewarding” for hospitals that invest in those capabilities for their orthopedics service lines.

A little-noticed update in early September to CMS’s Inpatient Prospective Payment System promises to increase the reimbursement bundle for primary and revision total ankle replacement procedures, which a specialist says will yield far better reimbursement and margins for facilities where such procedures are performed.

The changes, which begin at the start of the 2018 fiscal year, move total ankle replacement from a broad, lower-paying joint category that includes total hip and total knee replacement that yielded thin margins and lower utilization into a higher-paying Medicare code, says Greg Berlet, MD, an orthopedic surgeon and certified specialist in total ankle replacement.

“This announcement and change is most significant on the facility level, not the provider level,” says Berlet, who is also managing partner of the Columbus, Ohio-based Orthopedic Foot & Ankle Center, whose nine physicians draw 20-% to 30% of their patients from out of state. “This also doesn’t apply to outpatient centers. The change reflects that people who are changing the regs are hearing us,” he says.

Patients undergoing ankle replacements typically require an overnight stay in the hospital, he says.

The alternative surgical option to replacement, ankle fusion, is a good option for pain relief for such patients, but replacement ideally restores functionality of the joint, while fusion generally reduces joint function. Berlet says the update was needed because knee replacements by comparison are more predictable, and usually are needed because of normal wear and tear and age. Ankle replacement, by contrast, is more complex, requires longer operative times, and may need other work such as ligament repair that is uncommon in knee replacements.

Ankle replacements are usually the result of past injury, thus patients are usually younger, averaging age 55, while knee joint replacement patients’ average age is 70. Given the younger population, Berlet is hopeful commercial insurers will also adjust their reimbursement consistent with the CMS change.

He says the business impact of the decision is that hospitals will be much more willing to embrace total ankle replacement in their musculoskeletal service line, and be more willing to partner with physicians.

Though many hospitals have said they expect to lose money on Medicare’s Comprehensive Care for Joint Replacement reimbursement model, Berlet doesn’t expect them to experience the same financial difficulty with total ankle replacements.

“I think they’re losing money in hip and knee because they have allocated costs from other service lines,” he says. “I would be more interested if those statements came from orthopedic hospitals, so I don’t buy that statement, but regardless, I believe this can be profitable for everyone and will enhance a hospital’s reputation.”

He says while knee replacements nationwide number between 500,000 and 600,000 procedures a year, ankle replacements represent a much lower number of procedures. Of the 50,000 or so surgeries that feature either ankle fusion or replacement, replacement represents only about a third. This decision will replace fusion in a large number of patients over the next few years, he says.

Berlet says in treatment terms, he expects the decision to remove the financial barriers to access to ankle replacement, and it’s up to hospitals to help remove the accessibility barrier.

“Executives should make sure they surround themselves with physicians who embrace this innovation and can bring this skill to their facility,” he says. “They will find a rewarding service line to invest in.”

Philip Betbeze is the senior leadership editor at HealthLeaders.

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