Total Joint Replacement Under Scrutiny Again

Hospitals are urged to devote the resources to ensure that medical necessity is met, and the proper status is ordered.

The attention given to total joint replacement has been a recurring headache for both physicians and hospitals over the last several years, and it appears that there is little chance of it abating. The latest is the announcement by RELI Group, a contractor for the Centers of Medicare and Medicaid Services (CMS), that an upcoming comparative billing report will look at medical necessity for joint replacement.

For those unfamiliar with comparative billing reports, these are developed using Medicare claims data and provide individualized physician-specific information regarding the use of particular billing codes and compares those results with those of the physician’s entire peer group. As with PEPPER, which is also produced by RELI Group, the results go directly to the provider and are not released publicly. Although neither CMS nor the RELI Group discloses how topics are chosen, the topics that have been addressed in the past suggest that they look at areas of potential overuse such as Mohs surgery, vitamin D testing, and upper and lower endoscopy performed on separate days on the same patient.

In this new report, they will look at each total joint replacement, represented by HCPCS codes 27130 and 27447, at any site of service, with a diagnosis of osteoarthritis of the hip or knee, and then query the CMS system for any Medicare claims for either physical therapy or occupational therapy (HCPCS codes 97161-97168 or 97110, or a joint injection (HCPCS codes 20610-20611) within the prior 12 months. If there is no indication of either therapy or an injection, then the patient will be considered as lacking a trial of conservative therapy prior to surgery.

While the individual patient data is unavailable, RELI Group does provide state and national data for comparison. And in the case of total joint replacement, those numbers are not reassuring. Nationally, 51.36 percent of patients have not had prior conservative therapy, with state-specific results showing 39.73 percent for Illinois, and up to 70.67 percent for Vermont.

There are many reasons why this data may not be accurate. For instance, the patient may have had therapy that was covered by another insurer, or the patient may have been deemed inappropriate for a trial of therapy or may have had therapy or an injection more than a year prior to surgery. There is also no national coverage determination (NCD) on total joint replacement and the local coverage determinations (LCD) generally specify that a trial of conservative therapy must be tried, but none specify that the trial must include therapy or an injection. A patient who tried and failed a course of anti-inflammatory therapy would meet the requirements without having undergone therapy or receiving a joint injection. These caveats, though, apply to all physicians – so despite the limitations, it still allows an individual physician to compare their performance to others.  

This data is certain to receive attention from CMS and the recovery audit contractors (RACs). Although audits and topic approvals are on hold due to the COVID-19 pandemic, CMS has maintained their list of proposed RAC audit topics – with medical necessity for both hip and knee replacement remaining on the list from March.

As far back as 2013, when First Coast Service Options (FCSO) recouped surgeon fees when documentation did not support medical necessity for joint replacement, we have seen efforts by CMS contractors to ensure that only eligible patients undergo surgery. Add that to the removal of total knee replacement from the inpatient-only list in 2018 and total hip replacement in 2020 and the resulting confusion about status determinations, and it is clear that hospitals would be wise to devote the resources to ensure that medical necessity is met and the proper status is ordered.

The lack of proper oversight certainly has the potential to result in significant financial loss and increased regulatory scrutiny.

Programming Note: Ronald Hirsch, MD is a permanent panelist on Monitor Mondays. Listen to his live reporting every Monday at 10 EST.