2021 MIPS Cost: Knee Arthroplasty Measure


This document details the methodology for the Knee Arthroplasty measure and should be reviewed along with the Knee Arthroplasty Measure Codes List file, which contains the medical codes used in constructing the measure.

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Measure Description

Episode-based cost measures represent the cost to Medicare for the items and services provided to a patient during an episode of care (“episode”). In all supplemental documentation, “cost” generally means the standardized1 Medicare allowed amount,2 and claims data from Medicare Parts A and B are used to construct the episode-based cost measures.

The Knee Arthroplasty episode-based cost measure evaluates a clinician’s risk-adjusted cost to Medicare for patients who receive an elective knee arthroplasty during the performance period. The measure score is the clinician’s risk-adjusted cost for the episode group averaged across all episodes attributed to the clinician. This procedural measure includes costs of services that are clinically related to the attributed clinician’s role in managing care during each episode from 30 days prior to the clinical event that opens, or “triggers,” the episode through 90 days after the trigger.


Measure Rationale

An estimated 45% of adults in the United States are at risk for developing knee osteoarthritis at some point in their life, and the rate of Medicare patients undergoing a Knee Arthroplasty to treat it (or other forms of arthritis) has recently increased. From 2000 to 2006, the rate increased by 58% from a rate of 55 per 10,000 to a rate of 85 per 10,000 Medicare patients. 3 Opportunities for improvement include potential for a reduction in readmissions and mitigation of Venous Thromboembolism (VTE), which can occur after a Knee Arthroplasty and result in a significantly more expensive and longer hospital stay. The Knee Arthroplasty episode-based cost measure was recommended for development by an expert clinician committee—the Musculoskeletal Disease Management - Non-Spine Clinical Subcommittee—because of its impact in terms of patient population and clinician coverage, and the opportunity for incentivizing cost-effective, high-quality clinical care in this area. Subsequently, members of the Clinical Subcommittee provided extensive, detailed input on this measure.


Measure Numerator

The cost measure numerator is the sum of the ratio of observed to expected4 paymentstandardized cost to Medicare for all Knee Arthroplasty episodes attributed to a clinician. This sum is then multiplied by the national average observed episode cost to generate a dollar figure.


Measure Denominator

The cost measure denominator is the total number of episodes from the Knee Arthroplasty episode group attributed to a clinician.


Data Sources

The Knee Arthroplasty cost measure uses the following data sources:

  • Medicare Parts A and B claims data from the Common Working File (CWF)
  • Enrollment Data Base (EDB)
  • Long Term Care Minimum Data Set (LTC MDS)5


Care Settings

Methodologically, the Knee Arthroplasty cost measure can be triggered based on claims data from acute inpatient (IP) hospitals, hospital outpatient departments (HOPD), ambulatory/officebased care centers, and ambulatory surgical centers (ASC).



The cohort for this cost measure consists of patients who are Medicare beneficiaries enrolled in Medicare fee-for-service and who receive an elective knee arthroplasty that triggers a Knee Arthroplasty episode.

The cohort for this cost measure is also further refined by the definition of the episode group and measure-specific exclusions (see Appendix A).



1 - Claim payments are standardized to account for differences in Medicare payments for the same service(s) across Medicare providers. Payment standardized costs remove the effect of differences in Medicare payment among health care providers that are the result of differences in regional health care provider expenses measured by hospital wage indexes and geographic price cost indexes (GPCIs) or other payment adjustments such as those for teaching hospitals. For more information, please refer to the “CMS Price (Payment) Standardization - Basics" and “CMS Price (Payment) Standardization - Detailed Methods” documents posted on the CMS Price (Payment) Standardization Overview page. (https://www.resdac.org/articles/cms-price-payment-standardization-overview)
2 - Cost is defined by allowed amounts on Medicare claims data, which include both Medicare trust fund payments and any applicable beneficiary deductible and coinsurance amounts. Claims data from Medicare Parts A and B are used to construct the episode-based cost measures.
3 - M. G. Cisternas et al., "Racial Disparities in Total Knee Replacement Among Medicare Enrollees -- United States, 2000-2006. (cover story)," MMWR: Morbidity & Mortality Weekly Report 58, no. 6 (2009).
4 - Expected costs refer to costs predicted by the risk adjustment model. For more information on expected costs and risk adjustment, please refer to Section A.5.
5 - For information on how LTC MDS data are used in risk adjustment, please refer to Section A.5.

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