Archive January 2018 XIX, No. 1

Legal Update: Medicare Shifts Its Stance on Total Knees

CMS will cover TKA in hospital outpatient departments, but not in ASCs.

Jennifer Skeels

Jennifer Skeels


Lisa Lucido

Lisa Lucido


Total Knee
TOTAL KNEES Medicare removed total knee arthroplasty from the inpatient-only list, but excluded it from the list of ambulatory surgery center covered procedures.

When CMS removed total knee arthroplasty from its inpatient-only list (IPO), many assumed it would cover knee replacements in ambulatory surgery centers. But that's not the case — at least not yet. While CMS no longer requires that TKA be performed solely in the inpatient setting, the agency also declined to include TKA on the ASC Covered Procedures List. Bottom line: Medicare will cover TKA performed in hospital outpatient departments effective Jan. 1, but not in the ASC setting. This policy change will impact all hospitals with orthopedic programs — especially those participating in the Comprehensive Care for Joint Replacement (CJR) and Bundled Payment for Care Improvement (BPCI) programs.

Inpatient-only considerations

CMS first proposed removing TKA from the IPO list in 2013, but declined to finalize that proposal after industry stakeholders opposed the policy change on the grounds that it would be unsafe for Medicare beneficiaries. As it does with all procedures being considered for removal from the IPO list, CMS considered the following criteria as applied to TKA:

  • whether most outpatient departments are equipped to provide the service to the Medicare population;
  • whether the simplest procedure described by the applicable CPT code may be performed in most outpatient departments;
  • whether the procedure is related to codes already removed from the IPO list;
  • whether the procedure is being performed in numerous hospitals on an outpatient basis; and
  • whether the procedure can be appropriately and safely performed in an ASC, and is on the list of approved ASC procedures or has been proposed for addition to the ASC list.

CMS emphasized that it does not require a procedure to meet all 5 criteria in order to be removed from the IPO List. In support of its decision to remove TKA from the IPO list, CMS found that TKA procedures met criteria 1, 2 and 4. Importantly, CMS also declined to include TKA on the ASC Covered Procedures List.

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