Orthopedics billing
For as long as the inpatient-only list has existed, an orthopedic surgeon booking a listed procedure did not have to justify the admission: 42 CFR 412.3(d)(2) made it appropriate for Part A payment regardless of the expected duration of care. That changed for musculoskeletal surgery on 1 January 2026, and it changed for musculoskeletal surgery before it changed for anything else.
- 42 CFR 419.22(n) sets a three-year phase-out of the inpatient-only list, beginning 1 January 2026
- CMS started with 285 mostly musculoskeletal-related services -- the second time this specialty has gone first
- 42 CFR 419.23, the codified criteria for removing a procedure, was deleted as a conforming change
- Removed procedures keep a medical-review shield with no calendar expiry, ending on a data test instead
This is an educational guide to how billing works for orthopedics — its workflow, coding, and payer considerations. It is general information, not a statement that US Medical Billing serves this specialty, and not billing, coding, or legal advice.
What makes orthopedics billing distinct
Global periods, the modifier family that breaks out of them, fracture-care packages and correct-coding edits are the daily work of an orthopedic revenue cycle, and each is covered in depth elsewhere on this site. None of them is unique to orthopedics -- every surgical specialty lives inside a global period. What is currently unique to orthopedics is that it is the only specialty whose procedures have already moved through the first year of the elimination of the inpatient-only list.
42 CFR 419.22(n), as amended by the CY2026 hospital outpatient final rule, now reads: "Effective beginning on January 1, 2026, the Secretary shall eliminate the list of services and procedures designated as requiring inpatient care through a 3-year transition, with the list eliminated in its entirety by January 1, 2029." In the same rule CMS finalized eliminating the list "over the course of the next 3 years, starting with the removal of 285 mostly musculoskeletal-related services" for CY2026, and removed 42 CFR 419.23 -- the five codified criteria for deciding whether a procedure should come off the list -- as a conforming change. There is no longer a published test a procedure has to satisfy before it is removed; removal is now scheduled.
The consequence is a patient-status question rather than a coding question, and it is the one an orthopedic practice now has to answer that it did not have to answer before. Under 42 CFR 412.3(d)(2), an admission for a procedure still on the list is generally appropriate for Part A payment regardless of the expected duration of care. Once the procedure is off the list, the same admission is appropriate only under 412.3(d)(1) -- the physician's documented expectation that the patient will need hospital care crossing two midnights -- or under 412.3(d)(3). The surgery has not changed. What has changed is that the record now has to carry a reason.
How orthopedics billing flows
The stages below trace an orthopedic episode from access through follow-up. The patient-status decision is placed where it actually happens, which is before the case is booked rather than after the claim is denied.
Access, referral, and prior authorization
Advanced imaging, many surgical procedures, some injections and much durable medical equipment commonly require prior authorization. Capturing the referral, the planned procedure codes and the authorization before the service prevents avoidable administrative denials.
Common operational challenges
The first item below is eight months old. The rest are the structural features of orthopedic billing that create rework when they are not managed deliberately.
A patient-status decision that used to be automatic
While a procedure sits on the inpatient-only list, no expectation about length of stay is needed to support the admission. Once it comes off, the same procedure needs the documented two-midnight expectation or a case-by-case justification. Practices tend to discover this through the facility, not through their own claims.
No published criteria to check a procedure against
42 CFR 419.23 held five criteria for deciding whether a procedure should be removed from the list. It was deleted in the CY2026 rule as a conforming change, so no procedure-level test survives for a practice to check a case against. What the CY2027 proposed rule put in its place is a schedule rather than a test -- a proposed removal order by clinical family, which tells a specialty roughly when its turn comes without telling it whether any particular procedure qualifies. That is a proposal and not a final rule; the families, the counts and the transition years are set out in the article on the Medicare inpatient-only list.
Global-period judgment
Many procedures include a global surgical package covering related follow-up care for a set period. Distinguishing routine postoperative visits, which are bundled, from separately reportable services is a repeated, documentation-dependent decision.
Two devices on one fracture, under two different benefits
A cast or splint used for reduction of a fracture is paid under 42 CFR 410.36(a)(1) as a medical supply or appliance. A bone growth stimulator for the same patient is durable medical equipment with its own national coverage determination and its own documentation gate. The same episode straddles two benefit categories with different evidence requirements.
Documentation and coding considerations
Accurate orthopedic coding depends on documentation that supports the specific service, its laterality and site, its relationship to any prior procedure, and -- since 2026 -- the setting the patient was treated in.
Fracture care: global versus itemized
The NCCI Policy Manual states the fork rather than leaving it to judgment. Where a physician treats a fracture, dislocation or injury with an initial cast, strap or splint and also assumes the follow-up care, the casting codes may not be reported at all -- they are included in the fracture or dislocation code. Where the cast is an initial service with no other definitive procedure and only initial care is expected, an E/M service, a casting code and a supply code may all be reported. What decides it is whether follow-up care was assumed, not how much was done on the day.
Casting, splinting, and who applied it first
Cast and splint application has its own procedure codes and its own supply codes, but the manual bundles them in several directions: closed, percutaneous and open fracture and dislocation treatment codes already include the application, and a casting code may not be reported alongside another musculoskeletal service for the same anatomic area. Removal or repair is reportable only where a different entity applied the device in the first place -- so the question is not only what was done, but who did the original application.
Global-period modifiers
The modifier family that governs services around a global period includes 24 for an unrelated E/M during a postoperative period, 25 for a significant, separately identifiable E/M on the day of a procedure, 57 for the decision-for-surgery visit, 58 for a staged or related procedure, 78 for an unplanned return to the operating room for a related procedure, and 79 for an unrelated procedure during the postoperative period.
The bone growth stimulator's radiograph gate
National coverage determination 150.2 covers osteogenic stimulators only for listed indications, and for nonunion of a long bone fracture it defines nonunion by evidence rather than by clinical opinion: serial radiographs must confirm that healing has ceased, across more than one set of films taken multiple views at a time and separated by a stated minimum interval, before treatment begins. For ultrasonic stimulators the NCD adds a written physician interpretation of each set stating that no clinically significant healing occurred between them. The intervals and set counts are in the NCD itself.
Denial and rejection risks
The patterns below recur across orthopedic practices and are largely preventable at the front end and in coding.
Site-of-service and patient status
An admission for a procedure that has come off the inpatient-only list, without documentation supporting the expected length of stay, is exposed to site-of-service review. The exposure is new for musculoskeletal surgery and it lands on the facility claim rather than the surgeon's, which is why it is easy for a practice to miss.
Global-period bundling
Services provided during a global period are denied as bundled when a supporting modifier is missing or when documentation does not establish that the service was unrelated, staged, or separately identifiable.
Device coverage documented after the fact
The serial-radiograph evidence NCD 150.2 requires for a bone growth stimulator has to exist before treatment starts. Assembling it afterwards does not satisfy a coverage criterion that is expressly about what was confirmed prior to starting treatment.
Wrong payer or process
Sending a work-related or accident-related injury to the patient's health plan, or omitting a claim number and supporting records on a workers-compensation or liability claim, results in rejections and rework.
Payer-process considerations
The inpatient-only transition comes with a review shield that has an unusual ending condition, and orthopedics is the specialty currently relying on it.
A shield that expires on data, not on a date
42 CFR 412.3(d)(2) provides that claims for services removed from the inpatient-only list on or after 1 January 2021 are exempt from certain medical review activities "until the Secretary determines that the service or procedure is more commonly performed in the outpatient setting than the inpatient setting." In the CY2026 rule CMS described those activities as site-of-service claim denials under Part A, referrals to recovery audit contractors for noncompliance with the two-midnight rule, and recovery-audit review for patient status. The earlier version of this policy ran for a fixed number of years; the current one runs until the claims data turns.
This is the second attempt, and orthopedics led both
CMS first finalized eliminating the inpatient-only list for CY2021 and removed a tranche that was also overwhelmingly musculoskeletal. It halted the elimination in the CY2022 rule and returned most of those services to the list. A practice that built a patient-status workflow in 2021 and dismantled it in 2022 is being asked to build it again -- and should not assume the second attempt will end the way the first did.
Commercial and Medicare Advantage plans decide separately
The inpatient-only list is a Medicare fee-for-service construct. A commercial plan or a Medicare Advantage organization applies its own site-of-service and level-of-care policy, so the same procedure can be outpatient for one payer and require an inpatient authorization for another in the same week.
Workers-compensation and liability
42 CFR 411.40 provides that Medicare does not pay for services for which payment has been made, or can reasonably be expected to be made, under a workers-compensation law or plan. Those claims follow state-specific fee schedules and documentation rules, generally carry no patient cost-sharing, and often require an adjuster contact, a claim number and supporting records.
Revenue-cycle checkpoints
One of these is new since January 2026. The rest are the controls an orthopedic revenue cycle has always needed.
- Before booking, check whether the planned procedure is still designated inpatient-only under 42 CFR 419.22(n), because the answer decides what the record has to say about the admission.
- Where a procedure has come off the list, confirm the operative and admission documentation carries the clinical factors behind the expected length of stay.
- Confirm prior authorization for imaging, surgery, devices and injections before the service, and that it matches the planned procedure.
- Determine early whether an injury is work-related or accident-related so the claim routes to the correct payer and process.
- Verify that global-period status and any 24/25/57/58/78/79 modifier is supported by the documentation before the claim goes out.
- For a bone growth stimulator, confirm the serial-radiograph evidence the national coverage determination requires exists before treatment starts, not after.
Related & connected
Services, tools, background reading and definitions that connect to the orthopedics revenue-cycle steps above.
Related services
- Coding supportProcedure, modifier and diagnosis coding for surgical, fracture-care, imaging and injection services.
- Denial managementWorking global-period, authorization, site-of-service and modifier denials, including the longer workers-compensation and liability cycles.
- Eligibility verificationConfirming benefits and identifying work-related or accident-related claims before services are rendered.
Calculators & tools
- Place of service code lookupThe setting codes a case moving from inpatient to hospital outpatient has to be reported under.
- Denial rate calculatorEstimate the share of claims denied to gauge exposure from bundling, authorization and site-of-service issues.
- Days in AR calculatorTrack how long receivables stay open, which non-standard payers tend to lengthen.
From the Knowledge Base
- The Medicare inpatient-only listThe three-year phase-out in full -- the clinical families proposed for removal next, the ones deferred to last, and the end date the CY2026 rule got wrong.
- Modifiers that break out of a global periodThe 24/25/57/58/78/79 family in full -- which defined exit applies, and what each one asserts.
- NCCI procedure-to-procedure editsThe edit mechanism behind the bundling denials this guide describes, and what a modifier can and cannot bypass.
- Modifier 25 documentationWhat the record must show for an E/M billed on the same day as a procedure -- the recurring orthopedic pairing.
- Medicare Part A billingThe inpatient side of the claim a patient-status decision moves the case onto or off.
- Professional and institutional claimsWhy a change of setting rewrites the facility claim and leaves the surgeon's largely alone.
- The types of Medicare auditsWho the recovery audit contractors are, and what the review shield above is a shield from.
- National and local coverage determinationsHow the device coverage rule behind the bone growth stimulator is made, and what it can decide.
- Which services require prior authorizationEstablishing whether a planned procedure, device or injection needs authorization first.
- Modifier 26 and TC: billing one service in two halvesThe component split behind in-office radiographs, and why the fee schedule decides whether a code splits at all.
Glossary
- Global periodThe window this specialty's coding judgment turns on more than any other.
- Place of serviceThe field that changes when a procedure comes off the inpatient-only list.
- ModifierThe two-character code that says a service inside a global window is nonetheless separately reportable.
- Medical necessityThe coverage standard a device such as a bone growth stimulator has to meet, on the evidence the NCD names.
- Prior authorizationThe gate on advanced imaging, surgery, durable medical equipment and some injections here.
Frequently asked questions
What is happening to the Medicare inpatient-only list?
It is being eliminated. 42 CFR 419.22(n) provides that, effective beginning on 1 January 2026, the Secretary shall eliminate the list of services and procedures designated as requiring inpatient care through a three-year transition, with the list eliminated in its entirety by 1 January 2029. In the CY2026 hospital outpatient final rule CMS began with the removal of 285 mostly musculoskeletal-related services and, as a conforming change, removed 42 CFR 419.23, which had codified the criteria for deciding whether a procedure should come off.
Why does removing a procedure from the list change how the admission is documented?
Because 42 CFR 412.3(d)(2) treats an admission for a listed procedure as generally appropriate for Part A payment regardless of the expected duration of care. Once the procedure is no longer listed, that provision no longer applies to it, and the admission has to be appropriate under 412.3(d)(1) -- the admitting physician's expectation that the patient will require hospital care crossing two midnights, supported in the record by the complex medical factors that paragraph names -- or under 412.3(d)(3).
Are procedures removed from the list protected from audit?
Partly, and the protection has no end date. 42 CFR 412.3(d)(2) exempts claims for services removed from the inpatient-only list on or after 1 January 2021 from certain medical review activities until the Secretary determines that the service is more commonly performed in the outpatient setting than the inpatient setting. CMS described those activities in the CY2026 rule as site-of-service claim denials under Part A, referrals to recovery audit contractors for noncompliance with the two-midnight rule, and recovery-audit review for patient status. It is a shield against particular review activities, not against all review.
When is fracture care billed globally versus itemized?
The NCCI Policy Manual gives the test. Where the physician applies the initial cast, strap or splint and also assumes the follow-up care, the casting codes are not separately reportable -- they are included in the fracture or dislocation treatment code. Where the cast is an initial service, no other definitive procedure is performed, and only initial care is expected, an E/M service, a casting code and a supply code may all be reported. What decides it is whether follow-up care was assumed.
Is a cast durable medical equipment?
No. 42 CFR 410.36(a)(1) pays for surgical dressings, and splints, casts and other devices used for reduction of fractures and dislocations, as medical supplies, appliances and devices; braces sit in the same section at 410.36(a)(3)(i). Durable medical equipment is a separate benefit scoped at 42 CFR 410.38. The distinction matters on the same fracture, because a bone growth stimulator is durable medical equipment and carries the coverage and documentation requirements of national coverage determination 150.2, which a cast does not.
Sources
Last reviewed August 2, 2026.
- Office of the Federal Register / eCFR42 CFR 419.22(n) -- "Services and procedures that the Secretary designates as requiring inpatient care. Effective beginning on January 1, 2026, the Secretary shall eliminate the list of services and procedures designated as requiring inpatient care through a 3-year transition, with the list eliminated in its entirety by January 1, 2029." Read in the eCFR text current through 30 July 2026; the paragraph was substituted by the CY2026 rule below. 42 CFR 419.23, which codified the criteria for removing a procedure from the list, was removed by the same rule and no longer exists
- Office of the Federal Register / eCFR42 CFR 412.3(d) -- (d)(1) an inpatient admission is generally appropriate for Part A payment where the admitting physician expects the patient to require hospital care crossing two midnights, with (d)(1)(i) naming the complex medical factors the expectation must rest on and that must be documented; (d)(2) an admission for a procedure specified as inpatient-only under 419.22(n) is generally appropriate regardless of the expected duration of care, procedures no longer so specified are appropriate under (d)(1) or (d)(3), and claims for services removed from the inpatient-only list on or after January 1, 2021 "are exempt from certain medical review activities until the Secretary determines that the service or procedure is more commonly performed in the outpatient setting than the inpatient setting"
- U.S. Government Publishing Office (Federal Register), Centers for Medicare & Medicaid ServicesMedicare Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems, CY2026 final rule (90 FR 53575, 25 November 2025) -- CMS finalizes "eliminating the IPO list over the course of the next 3 years, starting with the removal of 285 mostly musculoskeletal-related services" for CY2026, and "eliminating the criteria for removing procedures from the IPO list currently codified at Sec. 419.23, as a conforming change"; the rule also recounts the earlier attempt, in which the CY2021 rule removed a first tranche that was likewise overwhelmingly musculoskeletal and the CY2022 rule halted the elimination and returned most of those services to the list, and restates the medical-review activities the exemption covers -- site-of-service claim denials under Part A, referrals to recovery audit contractors for noncompliance with the two-midnight rule, and recovery-audit review for patient status
- U.S. Government Publishing Office (Federal Register), Centers for Medicare & Medicaid ServicesMedicare Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems, CY2027 proposed rule (91 FR 41734, 7 July 2026), section IX.B at 91 FR 41907 -- the source of the removal order this guide refers to. CMS states that 1,438 services remain on the list and proposes to remove 637 of them "from the following clinical families: auditory, digestive, endocrine, female genital, hemic and lymphatic systems, integumentary, male genital, maternity care and delivery, mediastinum and diaphragm, respiratory, and urinary", selected "based on stakeholder feedback and concerns regarding proper APC placement". It expects the families left after that -- naming the neurological and cardiovascular families and solid organ, intestinal and islet cell transplants -- to come off in CY2028 in "the third and final phase of the elimination", having agreed with commenters "that we should wait to remove these more clinically complex and unique procedures ... until the final phase". Musculoskeletal services are absent from both groups because they went first, in CY2026. A proposed rule, not a final one
- Centers for Medicare & Medicaid Services (CMS)National Correct Coding Initiative Policy Manual, Chapter IV, §G (Fractures, Dislocations, and Casting/Splinting/Strapping) -- §G.1 removal or repair of an immobilization device is reportable only where a different entity performed the initial application; §G.3 no casting/splinting/strapping code alongside another Musculoskeletal System service for the same anatomic area; §G.5 and §G.6 fracture and dislocation treatment codes include the initial casting, strapping or splinting; §G.7 the casting codes are not reportable where the physician also assumes follow-up care; §G.8 an E/M service, a casting code and a supply code may be reported where the cast is an initial service with no other definitive treatment and only initial care is expected
- Centers for Medicare & Medicaid Services (CMS), Medicare Coverage DatabaseNational coverage determination 150.2, Osteogenic Stimulators -- benefit category durable medical equipment. Coverage of noninvasive and invasive electrical stimulators is limited to listed indications including nonunion of long bone fractures, failed fusion after a stated interval since the last surgery, congenital pseudarthroses, and use as an adjunct to spinal fusion for patients at high risk of pseudarthrosis; nonunion of a long bone fracture "is considered to exist only when serial radiographs have confirmed that fracture healing has ceased" for a stated period before treatment starts, evidenced by a minimum number of radiograph sets, each including multiple views of the fracture site and separated by a stated minimum interval. For ultrasonic stimulators each set must be accompanied by a written physician interpretation stating that no clinically significant healing occurred between them. Nonunion fractures of the skull and vertebrae, and tumor-related nonunions, are excluded from coverage
- Office of the Federal Register / eCFR42 CFR 410.36 -- Medical supplies, appliances, and devices: Scope. (a)(1) Part B pays for "Surgical dressings, and splints, casts, and other devices used for reduction of fractures and dislocations"; (a)(3)(i) "Leg, arm, back, and neck braces", with (a)(3)(i)(A) permitting a shoe that is an integral part of a leg brace, and (a)(3)(iii) covering replacements required because of a change in the individual's physical condition. Durable medical equipment is a separate benefit, scoped at 42 CFR 410.38. 42 CFR 411.40 provides that Medicare does not pay for services for which payment has been made, or can reasonably be expected to be made, under a workers' compensation law or plan
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