Advocacy News
October 16, 2012



AAOS President Issues Legislative Alert Warning of Potential Threat to In-office Ancillaries

AAOS Sends Letter to Congress Outlining Core Elements of New Medicare Payment System

AAOS Sends Letter in Support of Medicare Common Access Card Act

CMS Audits: What is AAOS Doing for You?

AAOS Launches POPTS Online Advocacy Toolkit

Special Message from American Medical Association President, Jeremy A. Lazarus, M.D. Promoting the Physician-Led Team for Patient Care; AMA Fights FTC Overreach

It’s Almost Election Time: Thank You to All of Our Orthopaedic Political Action Committee (PAC) Contributors!


AAOS website

AAOS Calendar

House of Representatives Legislative Activities


CMS Audits: What is AAOS Doing for You?

In 2010, President Obama announced three goals for cutting improper Medicare payments by 2012: reducing overall payment errors by $50 billion, cutting the Medicare fee-for-service error rate in half, and recovering $2 billion in improper payments. To that end, Medicare has initiated a number of audit programs with the intention of reaching those goals.  The audit programs that are currently most concerning to orthopaedic surgeons are being done by Medicare Administrative Contractors (MACs)--private companies that serve as contractors performing claims administration for Medicare.  Currently, there are 15 MAC jurisdictions.  See the MAC Jurisdiction map.

What Procedures are being Targeted by the MACs?

The procedures that are targeted for audits are those that have shown a high error rate in the MAC jurisdiction in which they are performed. At least three MACs have noted high error rates for DRG 470, total joint replacements. Each of them indicates that the improper payments are due to a failure to show medical necessity in the hospital record. This does not mean that the procedures were not medically necessary; generally speaking, the problem is not noting the failure of non-surgical interventions in the hospital records themselves.

What MAC’s are Currently Performing Audits?

MACs are currently auditing major lower extremity total joint arthroplasty procedures (DRG 470) in three MAC jurisdictions—MAC JH (CO, NM, TX, and WY), MAC J9 (FL, PR, VI), and MAC J12 (PA, NJ, DE, DC, MD).   The specific non-surgical treatments that need to be documented vary by MAC jurisdiction.  The AAOS believes that prior to performing audits, the MACs should notify physicians of the documentation they are going to require via a formal Local Coverage Decision (LCD).  The AAOS also believes that an LCD should be developed with input from physicians in the affected states.  This happened in MAC J9 which adopted a formal Local Coverage Determination policy in 2011.  Audits in Florida did not begin until January 2012, so the Florida Orthopaedic Society (FOS) had time to educate its members about the new coverage policy and documentation requirements.  In addition, the MAC contractor there—First Coast Service Options—engaged its Contractor Advisory Committee (CAC) and the AAOS, AAHKS, and FOS in its LCD process.  This led to a much improved coverage policy that reflected modern clinical practice.

However, some MACs have not issued formal local coverage determinations and most importantly, have not properly communicated this information to the physicians affected.  For example, in MAC JH and J12, which are both administered by Novitas Solutions, there has not been a formal coverage policy developed.  Instead, an informal policy has been developed without physician input and without appropriate physician notification.

What is the AAOS Doing about This?

The AAOS Board of Directors appointed the Coverage Determinations Project Team, led by David Templeman, MD, to spear-head the AAOS’ response to this issue. As its first task, the Project Team developed the AAOS’ first model coverage policy regarding major lower extremity total joint arthroplasty. This model coverage policy has been submitted to all MAC medical directors nationwide and other relevant CMS officials.  Read the Model Coverage Determination for DRG 470.

Under the project team’s leadership, the AAOS hosted a 2012 Annual Meeting session on Medicare audits that involved CMS officials, MAC medical directors, and legal professionals involved in audit appeals processes. The Project Team is planning a 2012 Fall Meeting symposium on the topic, as well as a webinar series.

In addition, the AAOS Health Care Systems Committee (HCSC) and others, worked with AAOS leadership to develop an article and recommendations for a documentation checklist for consideration by the Centers for Medicare and Medicaid Services (CMS) for publication as a Medicare Learning Network (MLN) article. In response to this request, CMS published an MLN Matters article September 17, 2012 that provides guidance to all Medicare providers. Read the CMS Guidance on Documenting Medical Necessity of TKA and THA Procedures.

In addition to several meetings with CMS from December through August, the AAOS placed pressure on Congress to get involved in this issue.  The AAOS coordinated a Congressional letter to CMS officials, calling on MAC JH and J12 administrators to cease audits on DRG 470 (major lower extremity total joint replacements) until such time as a formal coverage policy is put into place and orthopaedic surgeons are included in its development process.  To gain support for this letter, a Call to Action was sent by AAOS to physicians in the states currently affected by MAC audits.  In response, 80 orthopaedic surgeons wrote letters to Congress, urging their representatives to sign the letter. Ultimately, 45 of the 87 Members of Congress representing those states signed the letter, which was sent to CMS Administrator Tavenner on August 7, 2012.  Read the letter.

To ensure that members are properly educated on this issue, the AAOS has developed a webpage called “Medicare Audits 101” at  This webpage includes access to all AAOS publications regarding the issue, links to advocacy efforts related to the issue, and general background information. The AAOS has also developed an online reporting tool where orthopaedic surgeons and their staff can go online to report audit activity so that AAOS can monitor and respond to MAC developments. 

Future AAOS Actions

The AAOS is in the process of developing a nationwide network of orthopaedic Contractor Advisory Committee (CAC) representatives. This network will share information about orthopaedic coverage policies under consideration by MACs across the country and will be armed with information from the AAOS regarding our position on the various policies.

In part due to the efforts of AAOS Board of Counselors (BOC) Chair, Fred Redfern, MD , and the BOC, the AAOS has received information about 49 of the 51 orthopaedic CAC representatives in the U.S. (50 states plus DC).  There are 2 states (Arkansas and Maryland) for which we have no information.

Of the 49 states for which we have information, 19 of the orthopaedic slots are vacant.  The state orthopaedic societies via their BOCs are working to fill those vacancies. 

For more information on CMS audit activity please contact Ashlen Strong, AAOS Manager, State Government Relations at