Medicare payment cuts for orthopaedic surgery in 2021  

Substantial cuts to physician payment for surgical services are looming, with reductions for Medicare reimbursements likely to go into effect beginning January 1, 2021. These policies from the Centers for Medicare & Medicaid Services (CMS) in the CY 2021 Medicare Physician Fee Schedule (MPFS) propose to cut all orthopaedic surgical services by 5% and conflict with current law (see AAOS summary). If Congress doesn’t take action before the end of the year and the cuts are finalized by CMS, they will destabilize an already challenged healthcare system and drastically diminish the opportunity for physician practices to recover financially from the public health emergency.

The agency failed to extend updates to global surgical codes 

In 2019, CMS finalized a proposal to revalue evaluation and management (E/M) office/outpatient visit codes but failed to extend the updates to global surgical codes. AAOS believes that CMS falsely conflated the requirement to review the number and level of visits in global codes with maintaining relativity across the fee schedule, yet the two issues are unrelated. Now for 2021, CMS is proposing to extend the updates made to office/outpatient E/M visits to certain bundled services. It failed again, however, to incorporate these RUC-recommended increases for the revised office/outpatient visit E/M codes in the global surgical codes.

Budget neutrality requirements exacerbate cuts for specialty care

Every year, CMS must ensure that RVU changes for all codes paid under the Medicare Physician Fee Schedule (MPFS) remain budget neutral up to a maximum of $20 million, as mandated by congressional statute. As a result, Medicare Part B providers may see incremental decreases in payments annually when CMS shifts funding to accommodate increases in payments for other services within the fee schedule.

CMS proposed two policies for 2021 which created a substantial cost, resulting in significant cuts to specialty RVUs per the statutory requirements for budget neutrality. The combined impact of 1.) updating the values of office/outpatient E/M visits and 2.) moving forward with the unjustified add-on code will result in negative payment adjustments of up to 13% and will have devastating effects on specialty physicians and their patients.

AAOS is advocating to protect access and preserve value of services

  • August 15, 2019Together with 52 other organizations, the AAOS urged CMS not to finalize the proposed policy for 2020 which failed to apply adjustments to global codes.
  • March 30, 2020 –  In anticipation of the CY 2021 Medicare Physician Fee Schedule (MPFS) proposed rule, AAOS and state orthopaedic societies stressed that CMS must apply the RUC-recommended changes to the global codes for CY 2021.
  • August 5, 2020AAOS publicly reiterated alarm when CMS released the CY 2021 MPFS proposed rule.
  • August 21, 2020 – Then we joined with 25 other organizations in expressing opposition to the reduced conversion factor and second failure to apply adjustments to global codes.
  • October 2, 2020 –  After many conversations and years of working with the agency on this issue, AAOS provided formal comments co-signed by several orthopaedic specialty and state societies to CMS on the CY 2021 MPFS proposed rule.
  • October 9, 2020 – On the legislative side, we worked with Senator Susan Collins (R-ME) in urging Senate leadership to waive budget neutrality and prevent cuts.
  • October 13, 2020 – AAOS met with U.S. Health and Human Services Department Deputy Secretary Eric Hargan for a discussion on the payment cuts and existing CMS authority to ameliorate some of them.
  • October 19, 2020 – Most recently, we worked with 229 members of the U.S. House of Representatives led by Reps. Ami Bera, MD (D-CA), and Larry Bucshon, MD (R-IN), in encouraging Congress to incorporate a bipartisan solution in upcoming legislation.
Congress must act quickly to pass a legislative fix

As we approach the January 1, 2021 implementation deadline, Congress has limited outstanding legislative vehicles which could be used to pass a solution:

  • Potential COVID-19 Relief Package: Additional dollars for COVID-19. Unlikely to pass due to political, spending, and programmatic disagreements.
  • Continuing Resolution/Omnibus: Package setting funding levels for government programs, agencies, and initiatives. Considered “must pass” legislation.
  • Healthcare Extenders: A renewal of programs that need reauthorization through the Social Security Trust Fund. Considered “must pass” legislation.

Outside of these three packages, it is very unlikely that other legislative movement will occur. On the regulatory side, it is also possible that CMS may refine the policies based on its consideration of comments from physician groups.

Meanwhile, the AAOS is continuing to work with congressional champions like Reps. Larry Bucshon, MD (R-IN), and Ami Bera, MD (D-CA), to get legislation introduced which would hold providers harmless from the planned cuts. If a fix isn’t secured through congressional intervention before the end of 2020, these cuts will go into effect on January 1, 2021.