The Centers for Medicare and Medicaid Services, on November 1, 2017, finalized their proposed rule to remove total knee arthroplasty (TKA) from the inpatient procedure only (IPO) list and allow Medicare beneficiaries to have their knee replaced on an outpatient basis beginning with dates of service on and after January 1, 2018. This procedure will be paid under the outpatient prospective payment system (OPPS).
Removal of the TKA from the IPO list does not preclude a Medicare beneficiary from having a TKA as an inpatient. The decision whether to have a TKA as an inpatient or an outpatient will be the combined decision of the Medicare beneficiary and their physician.
So what does this mean if the Medicare beneficiary requires physical therapy services in order to go home after having their knee replaced on an outpatient basis? The Centers for Medicare and Medicaid Services (CMS) has assigned the TKA procedure to C-APC 5115 with a status indicator (SI) of J1 for payment purposes. J1 indicator means all covered Part B services on the claim are packaged with the primary J1 service for the claim, except services with OPPS SI=F,G, H, L and U; ambulance services; diagnostic and screening mammography; all preventive services; and certain Part B inpatient services. To view what services are included in SI F, G, H, L and U, click here.
As you review the list, you will see that physical therapy is not included in the services listed in SI F, G, H, L and U. Physical therapy, along with occupational therapy and speech therapy, is listed under SI A. In addition, physical therapy was not specifically listed above as being excluded in the services packaged under the SI of J1. So the question I am receiving is when a Medicare beneficiary has a TKA on an outpatient basis and is seen by a physical therapist (PT) in order for them to be able to go home, are the physical therapy services included in the APC payment or should they be billed separately as outpatient physical therapy under a physical therapy plan of care? This is a must read article for hospitals who are having Medicare beneficiaries have a TKA as an outpatient in 2018.
Per CMS, payment for outpatient department services that are similar to therapy services is
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This article is not intended to and does not serve as legal advice or as consultative services, but is for general information purposes only.