June 12, 2017
Seema Verma, MPH
Administrator
Centers for Medicare & Medicaid Services
Attention: CMS-1677-P
P.O. Box 8011
Baltimore, MD 21244-1850
Submitted electronically via http://www.regulations.gov
Subject: (CMS–1677–P)
Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care
Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed
Policy Changes and Fiscal Year 2018 Rates
Dear Administrator Verma:
On behalf of over 18,000 board-certified orthopaedic surgeons represented by the American
Association of Orthopaedic Surgeons (AAOS), we are pleased to provide comments on the
Centers for Medicare and Medicaid Services (CMS) Inpatient Prospective Payments System
Proposed Rule (CMS–1677-P) published in the Federal Register on April 28, 2017.
We commend CMS on its efforts to improve care quality and access. The Proposed Rule
touches on several issues which directly affect our membership and we sincerely hope that you
will take our comments into consideration when making any changes in policy.
Total Ankle Arthroplasty
We appreciate the proposed movement of Total Ankle Arthroplasty (TAA) from MS-DRG 470
to MS-DRG 469. As the Medicare claims data demonstrated, there is substantial cost difference
between TAA and other lower extremity joint replacements. However, we believe that further
examination of Total Ankle Arthroplasty with Major Complication (MS-DRG 469) and revision
TAA is merited. CMS determined that the average cost of TAA in MS-DRG 470 was $1689
higher than all cases in the group, yet, there was concern that the cost difference was
insignificant. Due to the limited number (n=31) of TAA cases assigned to MS-DRG 469, CMS
stated that a small number of expensive cases could artificially elevate the average cost. We
would assert that the opposite is equally possible. A small number of lower cost procedures
could underestimate average costs. The inherent difficulty and elevated complication rate
associated with revision surgery supports the latter explanation. Consistent under-

 reimbursement may render these procedures financially non-viable. Hospitals may be forced to
restrict TAA to low risk patients, with fewer co-morbidities. This limitation of patient access to
a proven treatment option for ankle arthritis, which decreases pain and increases functional
activity, works against the Triple Aim.
Accounting for Social Risk Factors and Risk Stratification
We commend CMS for addressing the complicated issue of social risk factors within each of its
quality programs. Social factors are well-studied determinants of health and are fundamental to
understanding and measuring quality. In addition to the standard socio-economic covariates,
such as education, marital status, and employment status, there are functional issues that affect
outcomes, particularly with respect to orthopaedic conditions. Patients lacking family assistance
or those having to navigate stairs at home tend to require more services, including longer length
of stay, inpatient rehabilitation, or home care services. Additionally, distance and transportation
to the site of care has a direct effect on outcomes and functional improvement. Consider the
patient who does not have a means of transportation to a physical therapy facility after knee
replacement surgery. Without extended home physical therapy services, this patient might
develop significant post-operative scarring, a painful and restrictive condition, often requiring
additional corrective surgery. It is clear that social needs are powerful drivers of care provision.
Accounting for these factors can illuminate the cause and legitimacy of cost variation. Programs
should be designed to enable teams of providers to redesign care in ways that reduce or eliminate
avoidable spending, while ensuring that patients with greater needs have access to increased
levels of care.
Risk stratification and adjustment are equally significant components of valid quality assessment.
Outcome measures are only reliable in a relative sense, as a means to compare baseline and postcare status. Comorbidities, functional impediments, and cognitive limitations must be accounted
for when assessing quality and costs. Importantly, the effects of multiple co-morbidities and
social factors are often synergistic. Providers should not be financially penalized when caring
for patients with greater needs. This could potentially discourage providers from performing
certain procedures or lead to restriction of warranted care.
Physician-Owned Hospitals
Physician-Owned Hospitals (POH) have been shown to provide higher quality care at lower cost
compared with those run by non-physicians or appointed boards. A higher percentage of POHs
have received the top 5-Star Rating by CMS than non-POH hospitals, which have considerably
higher risk of complications. Having physician- controlled operations, these hospitals are more
agile. They are able to shift focus and address frontline issues without the administrative redtape that cripples larger hospital systems. They contribute to local economies and meet a
growing demand for health care services, especially in rural areas. Concerns that POHs could
have an incentive to serve only the most profitable patients have been proven baseless. A
comprehensive peer-reviewed study published by the British Medical Journal found that, overall,

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 “physician-owned hospitals have virtually identical proportions of Medicaid patients and racial
minorities and perform very similar to other hospitals in terms of quality of care.”
The Stark Law, which has not been updated statutorily for more than two decades, limits the full
potential of POHs as innovative health care delivery models. Its implementation has not realized
the goal of decreasing medical costs. Rather, it has resulted in large hospital systems that
disincentivize competition. These hospital systems are absorbing surrounding medical practices,
becoming de facto monopolies. The presence of physician-owned hospitals serves to incentivize
traditional hospitals to improve, innovate, and control costs. Additionally, as rural hospital
failures accelerate, physicians (or physician-led groups) should be allowed to purchase them
outright or partner in a joint venture with the current management structure. This is just another
way to preserve access to rural medical care while driving downs costs and increasing quality
care.
We encourage the Secretary to explore all regulatory avenues to lift the arbitrary ban on new and
expanding POHs. The Secretary has broad authority in creating a new demonstration project
through the Center for Medicare and Medicaid Innovation for POHs which would include a
waiver or exemption that would allow POHs to expand if they are accepted into the program.
We also encourage the Secretary to explore a defined process for states to waive the Affordable
Care Act’s provisions on POHs through state and regional waivers. Based on legal analysis of
the relevant statutes, regulations, and guidance regarding state section 1115 waivers and the POH
restrictions, the secretary has broad authority to modify section 1877 and lift the POH
moratorium.
While the Stark Law is structured to control the volume of referred services, it is a liability
statute that leads to heavy penalties for unintentional and technical errors by physicians and their
staff. Liability statutes, such as the Stark Law, do not encourage physicians to participate in
coordinated care models. The Bundled Payment for Care Improvement (BPCI) Initiative and the
Comprehensive Joint Replacement (CJR) models reveal weaknesses in current law. The costs of
compliance and disclosures required can be prohibitive for small and medium-sized physician
practices participating in these models. Physician referrals in Accountable Care Organizations
(ACOs) are theoretically exempt from the Stark Law requirements through fraud and abuse
waivers. There should be similar exceptions/protections to physicians participating in APMs.
As AAOS and several of our partners have noted earlier in our comments to CMS and the US
Congress, we would like to reemphasize the importance of protecting the In-Office Ancillary
Services Exception (IOASE) and the need to lift the ban on expansion and new construction of
POHs.
“Communication About Pain” in HCAHPS
Orthopaedic surgeons are intimately aware of the difficulties of providing pain relief amidst the
opioid crisis. Many orthopaedic conditions require narcotic pain management for weeks or

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 months, particularly those involving trauma or aggressive post-surgical physical therapy. We
continue to utilize multimodal pathways for pain control, thus decreasing the need for oral pain
medication.
We believe that payment incentives for higher scores on the Pain Management dimension of the
HCAHPS survey may have created the unintended consequence of overprescribing opiates in the
inpatient setting. This scoring system of “Pain as a Fifth Vital Sign” has also created a culture of
opioid expectation among patients which has made discontinuation of narcotics challenging.
We appreciate the proposed change in the Pain Management category of HCAHPS, but maintain
that it is unreasonable to expect physicians to solve the opioid crisis during an acute pain
episode. It is important to distinguish between chronic and acute pain when regulating narcotic
use. For example, states are restricting narcotics (i.e., the 7-day rule, required E-prescribing) and
have mandated DEA logging for each narcotic prescription. These stop-gap regulations place
extraordinary burden on patients and physicians treating acute pain in the post-operative period,
when narcotics are necessary and warranted. Pain medication dosing is often increased as
patients become more active in the days following hospital discharge. This leads patients to
prematurely complete the 7-day supply. As can be expected, it is not uncommon for patients to
suffer weekends without pain medication in the days following surgery when physicians lack
access to the EMR.
Health Care System Flexibilities and Efficiencies
The AAOS commends the Administration’s efforts for initiating various payment, quality and
delivery models under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).
We appreciate your aim to reduce the administrative burden on clinicians and to introduce
greater flexibility in reporting requirements and eligibility rules. However, there have been
challenges for providers in meeting the requirements of the Physician Quality Reporting System
(PQRS) and Meaningful Use (MU). We appreciate that the 2016 PQRS reporting requirements
are reduced from eight to six measures. This is consistent with the Merit-based Incentive
Payment System (MIPS) and will enable more physicians to succeed. In addition, we urge CMS
to substantially expand the hardship exemption criteria for 2016 MU to include older physicians,
low volume physicians (similar to MIPS), hospital based physicians, rural practices and small
practices. Additionally, we request for 2018 to be treated as a transition year under MIPS, with
no penalties for failing to report.
Further and more pertinent to the IPPS, the AAOS strongly supports voluntary bundled and
episode-of-care payment models. The Comprehensive Care for Joint Replacement (CJR) and the
soon-to-launch Surgical Hip Femur Fracture Treatment (SHFFT) models’ mandatory
participation requirement for all surgical episodes triggered by MS-DRGs 469-470 and MSDRGs 480-482 respectively in each of the 67 randomly selected Metropolitan Statistical Area
(MSA) is flawed and should be replaced by a voluntary payment model for providers and

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 facilities. Many hospital systems use this program as a lever to coerce physicians to sell their
practices, further limiting competition and patient choice. In effect, any provider practicing in
these designated MSAs is mandated to participate in these programs. This will force many
surgeons and facilities who lack familiarity, experience, or proper infrastructure to support care
redesign efforts into these bundled payment models and will be at a disadvantage. A voluntary
program that allows surgeons, facilities, and non-surgical providers to tailor their episode-of-care
models to their particular patient population would lead to far better patient care as well as more
accurate and efficient payments. BPCI results clearly show physician-run bundles are more
successful.
Thus, we strongly urge CMS to revise the mandatory nature of the proposals and instead create
incentives for interested participants to participate voluntarily. Specifically, we recommend that
CMS require that any participating entity have verifiable interoperability, infrastructure, and
agreements between all necessary entities. We strongly urge the Administration to remove the
requirement for providers to upgrade to 2015 Edition Certified EHR Technology (CEHRT), as
most EHR developers have not yet met the 2015 CEHRT requirements. Only 54 of the more
than 3,700 EHR products are currently certified and posted on the Certified Health IT Product
List (CHPL). Any penalties envisioned should be directed to the EHR vendors, rather than the
physician.
The AAOS is concerned about the requirement that all providers use G-codes for all postoperative patient encounters. In addition to being unnecessarily burdensome, this will most
likely result in inaccurate data. While reviewing the requirements for reporting post-operative
visits (99024), the American Academy of Orthopaedic Surgeons (AAOS) has uncovered many
errors in the long descriptors on the code list published on the CMS website. We identified a
26% error rate in the long descriptors for just the musculoskeletal codes (20000 series). For
example, the long descriptor listed for code 29822 is arthroscopy, shoulder, surgical;
capsulorrhaphy. This descriptor is incorrect and should read arthroscopy, shoulder, surgical;
debridement, limited. These errors are not insignificant and are causing tremendous confusion
for providers in an already demanding reporting environment. AAOS believes these errors will
cause the data collected to be incorrect and requests that the mandatory reporting period
scheduled to begin on July 1, 2017, be postponed until the corrections can be made and provider
education efforts reinstated with the corrected information.
The 21st Century Cures Act includes provisions meant to address the issues of data blocking and
interoperability, which continue to interfere with efforts for quality improvement and
participation in CMS quality programs. Again, data blocking is a system and vendor issue over
which physicians have no control. We hope the Inspector General and Secretary Price will act
on the authority provided by the 21st Century Cures Act to investigate claims of data blocking by
EHR vendors and enforce compliance.

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 Furthermore, our recommendation to explicitly place a surgeon as head, or co-head, of episodes
would significantly reduce barriers to achieving high quality patient outcomes. It is the
orthopaedic surgeon who is involved in the patient’s care throughout the episode-of-care, from
the pre-operative workup, to the surgery itself, to inpatient post-operative care, to the postoperative care provided in rehabilitation facilities, at home, and in the physician’s office.
Therefore, it is logical that all episodes treated under the musculoskeletal condition/procedurebased bundles be overseen by orthopaedic surgeons and not an acute care hospital facility.
Having the hospital in charge of the bundle provides the hospital inappropriate leverage over
surgeons and other participants and could allow some hospitals to exclude surgeons and other
care providers if those parties don’t wish to meet the hospital’s terms.
The AAOS recommends that CMS eliminate all limits on gainsharing among providers to give
providers flexibility to allocate the CMS payment among the members of program teams in ways
that maximize incentives for each specific team to improve quality, as opposed to a one-size-fitsall model.
The AAOS urges the Administration to remove the burdensome requirements in the Affordable
Care Act (ACA) for insurers and the healthcare industry to provide translation and interpreting
services for limited English proficiency (LEP) individuals. In certain settings, such as rural
areas, it is difficult to procure translation and interpreting services.
The AAOS opposes the Independent Payment Advisory Board (IPAB) and supports repeal of
this entity. IPAB’s mandate to contain Medicare costs will likely subject physicians to unfair
cuts in reimbursement. IPAB is severely constrained in what it can recommend to slow the pace
of Medicare spending growth. IPAB recommendations cannot increase beneficiary premiums or
cost-sharing, cannot reduce benefits in any way, and cannot increase taxes. The only options
available are adjustments to what Medicare pays for various medical services. Since hospitals
are exempt from cuts until 2020, the burden of payment reductions will fall heavily on
physicians.
Lastly, we support efforts that produce greater transparency and consumer education. However,
we strongly oppose the publication of quality improvement surveys and plans of correction by
accrediting organizations (AO) in current form. Quality Assurance (QA) committees and
documentation have been held as non-discoverable in medico-legal actions by most states
(Kentucky being an exception). To make the list of discrepancies public would essentially
negate this protection. Without a proper determination of which elements should be made
public, and sufficient time for AOs to standardize their reports for reasonable comparison, there
is substantial risk of contextual misinterpretation. AOs must prepare the information in a way
that limits unintended consequences when published. It is imperative to ensure that the
accredited entities do not minimize safety concerns for fear of public reprisal or extricate

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 themselves from the accreditation process, altogether. This proposal of publication goes against
quality assurance activities across health systems.
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In conclusion, the AAOS appreciates CMS taking the opportunity provided by the Proposed Rule
to ask for stakeholder comments on reducing burdens on providers, introducing flexibilities,
improving competition via POHs, and improving the health care system for Medicare
beneficiaries. Please do not hesitate to contact the AAOS Medical Director, William O. Shaffer,
MD, at shaffer@aaos.org if you have any further questions or comments.
Sincerely,

William J. Maloney, MD
President, American Association of Orthopaedic Surgeons (AAOS)

This letter has received sign-on from the following specialty societies:
American Association of Hip and Knee Surgeons (AAHKS)
American Orthopaedic Foot and Ankle Society (AOFAS)
American Orthopaedic Society for Sports Medicine (AOSSM)
American Shoulder and Elbow Surgeons (ASES)
Arthroscopy Association of North America (AANA)
Cervical Spine Research Society (CSRS)
Musculoskeletal Tumor Society (MSTS)
Ruth Jackson Orthopaedic Society (RJOS)
Scoliosis Research Society (SRS)
Society of Military Orthopaedic Surgeons (SOMOS)
The Hip Society (HIP)
The Knee Society (KNEE)
Cc: Thomas E. Arend, Jr., Esq., CAE, CEO, AAOS
William O. Shaffer, MD, Medical Director, AAOS
David A. Halsey, MD, First Vice-President, AAOS
Kristy L. Weber, MD, Second Vice-President, AAOS

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