CMS Proposal to Update Equipment Prices Yields Payment Decreases to Radiation Oncology

The Centers for Medicare and Medicaid Services (CMS) recently released the 2019 Medicare Physician Fee Schedule (MPFS) proposed rule. The final rule will be published by November 1, with an effective date of January 1, 2019. The MPFS specifies payment rates to physicians and other providers, including freestanding cancer centers. It does not apply to hospital-based facilities. Payments to hospital outpatient departments is described in a separate article below.

As part of CMS authority under the Protecting Access to Medicare Act of 2014, CMS initiated a market research contract with StrategyGen to conduct an in-depth and robust market research study to update the MPFS direct practice expense (PE) inputs for medical supply and equipment pricing beginning in 2019. These supply and equipment prices were last systematically developed in 2004-2005. StrategyGen submitted a report with updated pricing recommendations for approximately 1,300 supplies and 750 equipment items currently used as direct PE inputs.

StrategyGen found that despite technological advancements, the average commercial price for medical equipment and supplies has remained relatively consistent with the current CMS price. However, while there were no statistically significant differences in pricing at the aggregate level, medical specialties will experience increases or decreases in their Medicare payments if CMS were to adopt the pricing updates recommended by StrategyGen. An initial analysis indicates that for radiation oncology the fluctuations in PE RVUs are significant, especially for SBRT and HDR brachytherapy services. In the aggregate, we anticipate an estimated two percent reduction in overall payment for radiation oncology services. CMS believes that it is important to make use of the most current information available for supply and equipment pricing instead of continuing to rely on pricing information that is more than a decade old. The table below details radiation oncology equipment items that will experience the greatest decline in reimbursement resulting from this proposal.

Given the potentially significant changes in payment that would occur, CMS is proposing to phase in the use of the new direct PE input pricing over a 4-year period from 2019-2022. CMS states that this transition period will not only ease the shift to the updated supply and equipment pricing, but will also allow interested parties an opportunity to review and respond to the new pricing information associated with their services.

AAPM will work with stakeholders to actively oppose inappropriate price reductions that do not reflect actual costs of equipment and will submit comments to CMS before the September 10 deadline.

Equipment Item	Current Price	Recommended Price	Percent Change from 2018-2022 after 4-Year Transition
SRS System, SBRT, Six Systems	$4,000,000	$931,965	-77%
HDR Afterload System, Nucletron - Oldelft	$375,000	$111,426	-70%
Water Chiller (radiation treatment)	$25,656	$9,847	-62%
Laser Targeting System (4 diodes)	$10,350	$4,603	-56%
Treatment Planning System, IMRT (Corvus w-Peregrine 3D Monte Carlo)	$350,545	$157,393	-55%
Radiation Virtual Simulation System	$967,000	$601,625	-38%
Brachytherapy Treatment Vault	$175,000	$134,998	-23%

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

2019 Proposed Rule Has Payment Increases for Radiation Oncology Procedures in the Hospital Outpatient Setting

The Centers for Medicare and Medicaid Services (CMS) recently released the 2019 Medicare Hospital Outpatient Prospective Payment System (HOPPS) proposed rule, which provides facility payments to hospital outpatient departments. AAPM will submit comments to CMS by the September 24 deadline. The final rule will be published by November 1, with an effective date of January 1, 2019. This rule does not impact payments to physicians or freestanding cancer centers.

CMS estimates an overall 1.25 percent increase in hospital outpatient facility payments in 2019 and all radiation oncology related Ambulatory Payment Classifications (APCs) have proposed payment increases from 0.1 percent to 3.2 percent (see table below). Payment for medical physics consultation codes 77336 and 77370 have a nominal 0.3 percent payment increase.

Summary of 2019 Radiation Oncology HOPPS Payments

APC	Description	CPT Codes	2018 Payment	2019 Proposed Payment	Payment Change 2018-2019	Percentage Change 2018-2019
5611	Level 1 Therapeutic Radiation Treatment Preparation	77280, 77299, 77300, 77331, 77332, 77333, 77336, 77370, 77399	$125.35	$125.68	$0.33	0.3%
5612	Level 2 Therapeutic Radiation Treatment Preparation	77285, 77290, 77306, 77307, 77316, 77317, 77318, 77321, 77334, 77338	$323.09	$327.18	$4.09	1.3%
5613	Level 3 Therapeutic Radiation Treatment Preparation	32553, 49411, 55876, 77295, 77301, C9728	$1,186.68	$1,208.10	$21.42	1.8%
5621	Level 1 Radiation Therapy	77401, 77402, 77407, 77789, 77799	$124.73	$127.79	$3.06	2.5%
5622	Level 2 Radiation Therapy	77412, 77600, 77750, 77767, 77768, 0394T	$219.83	$226.97	$7.14	3.2%
5623	Level 3 Radiation Therapy	77385, 77386, 77423, 77470, 77520, 77610, 77615, 77620, 77761, 77762	$522.31	$530.43	$8.12	1.6%
5624	Level 4 Radiation Therapy	77605, 77763, 77770, 77771, 77772, 77778, 0395T	$714.11	$714.95	$0.84	0.1%
5625	Level 5 Radiation Therapy	77522, 77523, 77525	$1,053.52	$1,081.08	$27.56	2.6%
5626	Level 6 Radiation Therapy	77373	$1,677.22	$1,702.73	$25.51	1.5%
5627*	Level 7 Radiation Therapy	77371, 77372, 77424, 77425	$7,565.69	$7,784.59	$218.90	2.9%

*Comprehensive APC

CMS maintains the Comprehensive APC (C-APC) policy for stereotactic radiosurgery (SRS), intraoperative radiation therapy and several brachytherapy needle/catheter insertion procedures in 2019. CMS defines a C–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. Under this policy, CMS calculates a single payment for the entire hospital stay, defined by a single claim, regardless of the date of service span.

CMS proposes to continue making separate payment for the 10 planning and preparation services adjunctive to the delivery of SRS treatments using Cobalt-60-based or LINAC-based technology when these services are furnished to beneficiaries within 30 days of SRS treatment.

AAPM remains concerned regarding the accuracy of claims data for radiation oncology related C-APCs, as there is a great deal of discrepancy around how hospitals submit these claims. AAPM is also uncertain as to whether the rates associated with C-APCs adequately or accurately reflect all of the procedures and costs associated with those APCs.

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