HEALTH POLICY & ECONOMIC ISSUES Wendy Smith Fuss, MPH, AAPM Health Policy Consultant

2017 Medicare Rule Has Minimal Impact on Payments to Physicians and Freestanding Cancer Centers

The Centers for Medicare and Medicaid Services (CMS) recently released the 2017 Medicare Physician Fee Schedule (MPFS) final rule. All policies and payments are effective on January 1, 2017. The MPFS specifies payment rates to physicians and other providers, as well as technical payments for freestanding cancer centers. It does not apply to hospital outpatient departments, which is covered under a separate rule whose changes are described in a separate article below.

CMS identified several radiation oncology codes as being "potentially misvalued". These codes were revalued by the AMA Relative Value Scale Update Committee (RUC) and payment will be reduced in 2017. Impacted codes include 2 for treatment device (77332, 77334), the special treatment procedure (77470) and 4 for hyperthermia treatment (77600, 77605, 77610, 77615). The technical and global payment for the intermediate treatment device (77333) code will increase in 2017. The AAPM successfully persuaded CMS to increase the physician work value for complex interstitial brachytherapy (77778) from 8.00 to 8.78 relative value units (RVUs).CMS's new rule establishes values for new moderate sedation codes and implements a uniform method for valuing codes for procedures that currently include moderate sedation. Specifically, CMS reduces the work RVU for radiation oncology procedures 77371, 77600, 77605, 77610 and 77615 by 0.25 RVUs. The reduction in work RVUs will be offset by the physician work of the new moderate sedation codes, when it is provided. Other 2017 proposals that impact radiology and radiation oncology payment include:

• Adds the cost of $14,617 for a professional PACS workstation to many diagnostic radiology codes, increasing the practice expense RVUs for these codes.
• Reduces by 20 percent the technical component payment for x-ray imaging using film.
• The Protecting Access to Medicare Act of 2014 created a program to promote the use of appropriate use criteria (AUC) for advanced diagnostic imaging services. The 2017 proposed rule focuses on the next component of the Medicare AUC program. It includes proposals for priority clinical areas, clinical decision support mechanism (CDSM) requirements, the CDSM application process, and exceptions for cases when consultation with AUC would pose a significant hardship.
• Revises the geographic practice cost indices (GPCIs) using updated data to be phased in over 2017 and 2018.

Overall, the final rule has minimal impact on payments to radiation oncologists, radiologists, and freestanding cancer centers.

To read a complete summary of the final rule and to review impact tables go to the AAPM website.

CMS Expands Comprehensive APCs Without Addressing Data Concerns

The Centers for Medicare and Medicaid Services (CMS) recently released the 2017 Hospital Outpatient Prospective Payment System (HOPPS) final rule with an effective date of January 1, 2017.

CMS reduced the number of ambulatory payment classifications (APCs) for Therapeutic Radiation Treatment Preparationfrom 4 to 3 levels. Three reassigned codes, including the special medical physics consultation code (77370), have a significant payment decrease of 30%. Final 2017 payments and impacts for radiation oncology procedures are in the table below.

CMS finalized their proposal to create 25 new Comprehensive APCs, many which include brachytherapy related surgical procedures (20555, 41019, 55920, 57155, 58346), which are converted from a clinical APC to a Comprehensive APC in 2017. This may have implications for brachytherapy treatment delivery since Comprehensive APCs make a single payment for the primary surgical procedure and bundle all other costs, including radiation treatment planning and delivery codes, on the same claim. AAPM did an economic analysis of the new Comprehensive APC claims data and determined that some costs of associated radiation therapy services, including brachytherapy treatment delivery, were not captured in the bundled payment.

CMS replied that they rely on hospitals to bill all codes accurately in accordance with their code descriptors and CPT and CMS instructions, as applicable, and to report charges on claims and charges and costs on their Medicare hospital cost reports appropriately.

Moreover, CMS stated that they do not remove claims from the claims accounting when stakeholders believe that hospitals included incorrect information on some claims.

CMS may examine the claims for these brachytherapy insertion codes and determine if any future adjustment to the methodology (or possibly code edits) would be appropriate.Other 2017 HOPPS policies include:

• Implementing site-neutral payments as required under the Bipartisan Budget Act of 2015, which requires that items and services furnished in certain off-campus provider-based departments not be covered or paid under the HOPPS. Those items and services will instead be paid "under the applicable payment system" beginning January 1, 2017, which CMS designates as the Medicare Physician Fee Schedule. CMS reports that payment to these affected off-campus, provider-based departments will be approximately 50 percent of the HOPPS payment.
• CMS consolidated the diagnostic imaging APCs from 17 clinical APCs in 2016 to 8 APCs in 2017.
• X-ray imaging with film (including the x-ray component of a packaged service) will be reduced by 20 percent. Hospitals will be required to use a modifier on claims for x-ray images that are made using film.

A complete summary of the final rule and impact tables is on the AAPM website.

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