On November 1, 2011 CMS released the Final Rule for the CY 2012 Physician Fee Schedule. (PFS). Click on the linked topics below to jump directly to that topic.
 Executive Overview
In the Final Rule, CMS indicates that the overall impacts to specialties are due to:
(1) The third year of the four-year transition to the utilization of new Physician Practice Information Survey (PPIS) data.
(2) Rebasing of the Medicare Economic Index (MEI).
However, important changes also occurred between the Proposed and Final Rule that resulted in a net decrease of 2% in radiation oncology payments. These changes relate to AMA RUC recommendations on several important radiation oncology codes, including 77418.
ACRO will, in collaboration with the Radiation Oncology community, comment on the final rules, as they remain "Interim" Final and may be commented on. This is done to maintain appropriate reimbursement rates to allow our members to continue to provide excellent patient care. In the past this comment period has alerted CMS to issues including utilization rates which may have had unintended consequences to the sustainable practice of radiation oncology.
Please reply to this email with any comments questions or concerns. ___________________________________________________________________________________________ Third Year of the PPIS Survey
In the CY 2010 Physician Fee Schedule Final Rule, CMS recognized arguments regarding the distinction between radiation therapy and diagnostic imaging and, consequently, reversed its application of the equipment utilization policy to radiation therapy equipment. In addition, while CMS finalized its proposal to use PPIS data, CMS finalized a four-year transition to the use of the new PPIS data (75/25 for CY 2010, 50/50 for CY 2011, 25/75 for CY 2012, and 0/100 for CY 2013) because of the magnitude of payment reductions for certain specialties. However, there is ongoing concern that the continued application of blended PE/HR values used in the PPIS data is not reflective of practice expense costs incurred at freestanding radiation therapy centers. CMS notes in the CY 2012 Final Rule that it is transitioning an additional 25 percent of PPIS data into the PERVU methodology.
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Rebasing of the Medicare Economic Index
In the CY 2011 Physician Fee Schedule Final Rule, CMS finalized its proposal to rebase the MEI to reflect appropriate physicians' expenses. CMS noted in that rule that specialties with a high proportion of total RVUs attributable to PE, such as radiation oncology, were estimated to experience an increase in aggregate payments. While MEI rebasing masked the otherwise negative impacts to "radiation oncology" and "radiation therapy centers" in 2011 from the PPIS policy, the negative effects of the PPIS policy continue through 2013.
CY 2012 Conversion Factor
In the CY 2011 Physician Fee Schedule Final Rule, CMS noted Section 1848(c)(2)(B)(ii)(II) of the Social Security Act required that the increases made to PE values as a result of the MEI rebasing be accomplished on a budget neutral basis. Rather than make corresponding reductions to work RVUs, however, CMS finalized its proposal to apply a budget neutrality adjustment of 0.9181 to the conversion factor (CF). Largely as a result of this policy, the CY 2011 PFS CF was reduced to $33.9764.
Although CMS makes certain budget neutrality adjustments to the CY 2012 final CF, the adjustments are minor: the adjustments would raise the CY 2012 CF from $33.9764 to $34.0376. In addition, however, policies relating to the sustainable growth rate (SGR) portion of the CF ultimately would result in a reduction of the CF of 27.4% to $24.6712 as of January 1, 2012. ACRO continues to advocate against such cuts and to urge Congress to find a permanent solution to the SGR.
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Changes to Key Radiation Oncology Codes Between the Proposed and Final Rules
AMA RUC Recommendations
Several radiation oncology codes had their direct practice cost inputs affected by an "October 8, CPT 12"AMA RUC meeting. The following discussion describes how these codes were negatively impacted between the Proposed and Final Rules.
In the Final Rule, CMS notes, "We have accepted for CY 2012, as interim final and without refinement, the direct PE inputs based on the recommendations submitted by the AMA RUC for the codes listed in Table 20." Table 20 includes the following radiation oncology codes: - 77418, Radiation tx delivery IMRT. As a result of CMS's acceptance of the AMA RUC's recommendations, CMS removed a number of direct practice cost inputs for 77418 in the labor, supplies and equipment categories. For example, between the Proposed and Final Rules, CMS removed 7 of the 10 equipment direct practice cost inputs for 77418, including the "computer system, record and verify" input with a price of $163,593.
- 77421, Stereoscopic x-ray guidance. As a result of CMS's acceptance of the AMA RUC's recommendations, CMS reduced "Non-facility time" from 34 minutes to 24 minutes for the "portal imaging system (w-PC work station and software)" equipment direct practice cost input.
- 76950, Echo guidance radiotherapy. As a result of CMS's acceptance of the AMA RUC's recommendations, CMS removed a number of equipment and supply direct practice cost inputs for 76590.
- 77435, Sbrt management. In the case of 77435, the majority of the impact between the Proposed and Final Rule to 77435 is due to CMS's acceptance of an AMA RUC recommendation to reduce work RVUs for 77435 from 13.00 to 11.87. Because work RVUs are an input into the PE methodology, there also were corresponding, smaller reductions in this code's PERVUs.
In addition, the AMA RUC made recommendations on other codes, which CMS further "refined." These codes are included in Table 21 of the Final Rule and include the following radiation oncology code:
- 77014, Ct scan for therapy guide. In the case of 77014, the AMA RUC recommended a reduction of "Non-facility time" from 26 minutes to 18 minutes for the "room, CT" equipment direct practice cost input. CMS further "refined" the "Non-facility time" to 14 minutes.
Preliminary Impact Analysis
The Proposed and Final Rule impact tables show CY 2012 and CY 2013 impacts from the third and fourth year phase-ins of the four year transition to the use of PPIS data as represented in the table below. CY 2013 percentages reflect the cumulative effect of the phase-in and should not be added to the CY 2012 percentages (e.g. the CY 2013 impact under the Final Rule to radiation oncology is - 10%, not - 16%).
It should be noted that "radiation therapy center" RVUs are only about 4 percent of total RVUs contained in CMS's specialty designations of "radiation therapy centers" and "radiation oncology." Because these two specialties are self-reported, there is no particular barrier, for example, for an entity which is in fact a radiation therapy center to report to CMS as a radiation oncology specialty. Ultimately, the impact of the Final Rule on a particular center will depend on center-specific variables (e.g. case mix).
Radiation Oncology Codes Subject to Future AMA RUC Review
As part of its effort to continue to identify, review and adjust "potentially misvalued codes," CMS requested in the Final Rule that the AMA RUC review the following codes: - 77421 (Stereoscopic X-Ray Guidance)
- 77301 (Radiotherapy Dose Plan, IMRT)
- 77014 (Ct Scan for Therapy Guide)
These codes were identified by CMS along with over 70 other codes because they (1) have not been reviewed for at least 6 years, (2) represent high Medicare expenditures under the PFS, and (3) have a significant impact on PFS payment on a specialty level. CMS requests that the AMA RUC review at least half of these codes (including the aforementioned radiation oncology codes) by July 2012 in order for CMS to include any revised valuations for these codes in the CY 2013 PFS final rule with comment period.
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