Improving Health Through Medical Physics


Wendy Smith Fuss, MPH | Delray Beach, FL

AAPM Newsletter — Volume 43 No. 6 — November | December 2018

AAPM Submits Comments on 2019 Medicare Proposed Rules

AAPM recently submitted comments to the Centers for Medicare and Medicaid Services (CMS) regarding the 2019 Medicare proposed rules for payments to hospital outpatient departments, ambulatory surgical centers (ASCs), freestanding cancer centers and physicians.

CMS will address public comments in the 2019 final rules, which will be published on the first of November. AAPM's full comments to CMS can be found here.

Medicare Hospital Outpatient Prospective Payment System

AAPM provided written comments to CMS regarding the 2019 Medicare Hospital Outpatient Prospective Payment System (HOPPS) proposed rule, which provides facility payments to hospital outpatient departments.

In the 2019 Medicare hospital outpatient proposed rule, CMS proposes to continue the existing Comprehensive APC (C-APC) payment methodology for single-session cranial stereotactic radiosurgery and for brachytherapy device insertion procedures.

CMS defines a Comprehensive APC as a classification for the provision of a primary service and all adjunctive services and supplies provided to support the delivery of the primary service. The primary service is assigned a "J1" status indicator. Under this policy, CMS calculates a single payment for the entire outpatient encounter, defined by a single claim, regardless of the date of service span.

Since the inception of the Comprehensive APC methodology, AAPM has commented on concerns around the claims data used for rate setting due to significant variations in clinical practice and billing patterns across the hospitals that submit these claims. The episode of care for cancer is complex and the treatment time varies significantly not only based on the type of cancer but on the treatment modality. The assumption that a patient is being treated exclusively in the outpatient hospital setting for a single problem represented on a single claim is not representative of complex oncology care.

AAPM is concerned that the rates associated with Comprehensive APCs do not accurately reflect all of the services and costs associated with the primary procedure. The current C-APC methodology is of particular concern as CMS continues to expand the number of packaged and bundled services. Given the complexity of coding, serial billing for cancer care, and potentially different sites of service for the initial surgical device insertion and subsequent treatment delivery or other supportive services, AAPM continues to oppose the current Comprehensive APC payment methodology for cancer care.

AAPM did propose an alternative payment policy to pay for “J1” brachytherapy device insertion codes under the C-APC payment methodology but exclude and make separate payment for designated preparation and planning services in addition to the C-APC payment. AAPM created a list of twenty-eight (28) codes proposed for separate payment, in addition to the bundled C-APC payment for the brachytherapy insertion codes effective January 1, 2019. This recommendation mirrors the current CMS payment policy for single-session cranial stereotactic radiosurgery codes 77371 and 77372, which allows separate payment for specified preparation and planning codes.

Medicare Physician Fee Schedule

AAPM also provided written comments to CMS regarding the 2019 Medicare Physician Fee Schedule (MPFS) proposed rule, which impacts physician payment and payments to freestanding cancer centers. One key proposal would significantly reduce future reimbursement for stereotactic body radiation therapy (SBRT) and high dose rate (HDR) brachytherapy services.

CMS initiated a market research contract with StrategyGen to conduct an in-depth and robust market research study to update the direct practice expense (PE) inputs for supply and equipment pricing for CY 2019. These supply and equipment prices were last systematically developed in 2004-2005. StrategyGen found that despite technological advancements, the average commercial price for medical equipment and supplies remained relatively consistent with the current CMS price. StrategyGen submitted a report with updated pricing recommendations for approximately 1,300 supplies and 750 equipment items currently used as direct PE inputs. After reviewing the StrategyGen report, CMS is proposing to adopt the updated direct PE input prices for supplies and equipment as recommended by StrategyGen.

AAPM provided the follow comments and recommendation:
While AAPM supports CMS efforts to update equipment and supply pricing to reflect current costs, AAPM also believes that the proposed post-transition pricing for certain medical equipment items used for cancer care are inaccurate. The lack of transparency of the contractor process and specific inputs (i.e. manufacturer name, model and price) used to develop updated pricing are concerning. In particular, AAPM believes the three medical equipment items shown in Table 1 are significantly undervalued relative to fair market pricing.

Equipment Item 2018 Current Price 2022 Recommended Price Percentage Change Over 4-Year Transition Period
ER003 HDR Afterload System, Nucletron - Oldelft $375,000 $111,426 -70%
ER083 SRS System, SBRT, Six Systems $4,000,000 $931,965 -77%
ES052 Brachytherapy Treatment Vault $175,000 $134,998 -21%

By way of example, SRS LINAC (ER082) and SBRT LINAC (ER083) systems are similar in both technological complexity and pricing in the current marketplace, yet the proposed StrategyGen pricing would value the latter ($931,965) at a small fraction of the former ($4,195,100). All equipment items shown in Table 1 have recommended prices that are below industry standards. Given the high cost of these items and their substantial utilization in certain radiation oncology delivery codes, it is imperative that CMS inputs accurately reflect the marketplace pricing.

The 2018 price for the Nucletron Oldelft High Dose Rate (HDR) Afterload System (ER003) is $375,000. CMS proposes a new price of $111,426, a 70 percent pricing reduction. We think that StrategyGen may have included updated pricing for a less costly electronic brachytherapy system used to treat non-melanoma skin cancer. This equipment type would not be utilized with procedures that utilize a HDR afterloader (i.e. CPT 77767, 77768, 77770, 77771 and 77772). Alternatively, the new recommended price may represent an equipment upgrade or refurbished equipment. Due to the lack of transparency, we are not able to verify the specific types of medical equipment used to determine the new pricing for ER003, but it is clearly in error.

The 2018 price for the Brachytherapy Treatment Vault (ES052) is $175,000. CMS proposes a new price of $134,998. Invoices for the Brachytherapy Treatment Vault were submitted in 2015 when the HDR Brachytherapy codes were last revalued by the AMA Relative Value Scale Update Committee (RUC). The recent pricing data supports the current price of $175,000.

AAPM recommends that CMS utilize the existing practice expense inputs for equipment items ER003 HDR Afterload System, ER083 SBRT System and ES052 Brachytherapy Treatment Vault. AAPM believes the current prices for those items, which were established through the RUC process, should be retained.

In addition, CMS proposed to phase in the use of the new direct PE input pricing over a 4-year period using a 25/75 percent (CY 2019), 50/50 percent (CY 2020), 75/25 percent (CY 2021), and 100/0 percent (CY 2022) split between new and old pricing. We agree that implementing the proposed updated prices with a 4-year transition will improve payment accuracy, while maintaining stability and allowing stakeholders the opportunity to address potential concerns about changes in payment for particular items.

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