Dear Dr. ,  

 

On July 6, 2012, CMS released the Proposed Rule for the CY 2013 Physician Fee Schedule (PFS).  Public comments will be accepted until September 4, 2012 and the final rule will be released by November 1, 2012.    

   

Codes Impacted:

Click here to download a .pdf outlining the proposed changes to important radiation therapy codes.   

 

Webinar:

In an effort to provide our members with timely analysis of the proposed rule changes, ACRO, in partnership with Revenue Cycle, Inc. will provide a free members only Webinar covering this important issue Tuesday, July 17th at 5pm Eastern.  Click here to register. 

 

Preliminary Analysis of the CY 2013 Physician Fee Schedule:   

Prepared for ACRO's Governmental Affairs and Economics Committees by Liberty Partners Group, Washington, D.C.

 

Please click on the links below to "jump" to specific sections, you may also scroll through the entire alert.
Overview 

Preliminary Impact Analysis
Reasons for Reductions in the CY 2013 PFS Proposed Rule
Related Impacts on Other Radiation Oncology Codes
Radiation Oncology Codes Subject to Future AMA RUC Review  

Radiation Oncology Codes Already Under Review   

In the Proposed Rule, CMS indicates that the overall impact to "radiation oncology" and "radiation therapy centers" is due primarily to:
1. The fourth year of the four-year transition to the utilization of new Physician Practice Information Survey (PPIS) data (-3%);
2. Updated equipment interest rate assumptions (-3%);
3. New discharge care management proposals (-2%); and
4. "Input changes for certain radiation therapy procedures" (-7%).

  

Preliminary Impact Analysis 

The Proposed Rule impact table shows CY 2013 impacts from the policies described above. These estimates do not include the effects of the scheduled 27 percent cut to the 2013 conversion factor.  The effects on allowed charges billed to the specialty codes, "Radiation Oncology" and "Radiation Therapy Centers", are reflected in Table 1 below.


The precise estimate for any specific facility will depend on specific practice patterns (e.g., in particular, the utilization of IMRT and SBRT).

 

1.Fourth and Final Year of the PPIS Survey
2.Updated Equipment Interest Rate Assumptions
3.New Discharge Care Management Proposal
4. Input Changes for Certain Radiation Therapy Procedures

Fourth and Final Year of the PPIS Survey
In comments to CMS regarding the CY 2010 PFS Proposed Rule, the radiation oncology community raised serious concerns regarding policies relating to (1) the application of a 90 percent equipment utilization rate for radiation therapy equipment, and, (2) the use of data from the American Medical Association's (AMA's) Physician Practice Information Survey (PPIS) in place of the AMA's SMS survey data and supplemental survey data.  Those proposed changes would have resulted in an average reduction in payment of more than 35 percent for the family of radiation treatment delivery services described by CPT codes 77401 through 77418.

In the CY 2010 PFS 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, the agency also 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 2013 PFS Proposed Rule, that it is transitioning the final 25 percent of PPIS data into the PERVU methodology.  This policy results in a -3 percent reduction to radiation oncology.

Updated Equipment Interest Rate Assumptions
Currently, the interest rate assumption for equipment costs under the PFS is 11 percent.  In the CY 2013 PFS Proposed Rule, CMS proposes a "sliding scale" approach that varies the interest rate based on the equipment cost, useful life, and Small Business Administration maximum interest rates for different categories of loan size and maturity.  As shown in Table 2 below, the proposed sliding scale would equal the Prime Rate (currently 3.25 percent) plus a percentage ranging from 2.25 percent to 4.75 percent depending on price of the equipment (less than $25,000; $25,000 - $50,000; greater than $50,000) and life of the equipment (less than 7 years; more than 7 years).  Lowering the interest rate from 11 percent to a range of 5.5 percent to 8 percent reduces equipment direct cost inputs and, consequently, reduces certain radiation oncology PERVUs.  This policy results in a -3 percent reduction to radiation oncology.

 

 
New Discharge Care Management Proposal
In the CY 2013 PFS Proposed Rule, CMS proposes to create a HCPCS G-code to describe care management involving the transition of a beneficiary from care furnished by a treating physician during a hospital or other institutional stay to care furnished by the beneficiary's primary physician in the community.  CMS estimates that primary care physicians and practitioners would provide post-discharge transitional care management services for 10 million discharges in CY 2013.  Family practice physicians receive a 5 percent increase in payments from this policy, but most non-primary physicians receive reductions due to budget-neutrality.  This policy results in a -2 percent reduction to radiation oncology.

Input Changes for Certain Radiation Therapy Procedures
In the CY 2013 PFS Proposed Rule, CMS makes significant negative reductions to the RVUs for IMRT and SBRT.  CMS provides three primary rationales for these reductions.  First, CMS notes that there are wide discrepancies between the procedure time assumptions used in establishing nonfacility PE RVUs for these services and the procedure times made widely available to the general public.  Second, CMS highlights concerns over "Urorad" and the existence of such practices as evidence of overpayments for IMRT.  Third, CMS indicates that IMRT payments have been higher in the freestanding setting than the hospital outpatient setting in recent years.  Consequently, CMS proposes, "to adjust the procedure time assumption for IMRT delivery (CPT code 77418) to 30 minutes" and "to adjust the procedure time assumption for SBRT delivery (CPT code 77373) to 60 minutes."  However, CMS also proposes to allocate minutes to equipment items for these codes to account for their use immediately before and following the procedure (e.g., preparing the equipment, positioning the patient, or cleaning the room).  Actual minutes shown in the equipment direct cost database for IMRT and SBRT are 37 minutes for IMRT (down from 60 minutes in 2012) and 84 minutes for SBRT (down from 114 minutes in 2012).

Discrepancy in CMS Procedure Time Assumptions and Procedure Times Widely Available to the Public.  CMS states,"[w]hile we generally have not used publicly available resources to establish procedure time assumptions," it needs to reconcile "vast discrepancies" between CMS's current assumptions and "more accurate information." CMS also notes this need outweighs the potential value in maintaining relativity offered by only considering data from one source (i.e. the AMA RUC).  Interestingly, the "more accurate information" cited by CMS takes the form of ASTRO/ACR/RSNA patient brochures in the case of IMRT (e.g., "treatment is delivered in a series of daily sessions, each about 15 minutes long") and ACR/RSNA website information in the case of SBRT (e.g., "treatment can take up to one hour"). 

  

CMS Concerns Over "Urorad."  CMS cites recent Urorad articles in the Washington Post and Wall Street Journal stating the articles "encouraged us to consider the possibility that potential overuse of IMRT services may be partially attributable to financial incentives resulting from inappropriate payment rates."  CMS also notes that MedPAC's June 2010 Report to Congress recommends that "In the context of the growth of ancillary services in physicians' offices, MedPAC recommended that improving payment accuracy for discrete services should be a primary tool used by CMS to mitigate incentives to increase volume."  ACRO Counsel would note that other options MedPAC has explored to address concerns about the in-office ancillary exception include bundling payments (see handout for January 15, 2010 MedPAC meeting). 

  

Physician Fee Schedule Rates Have Exceeded Hospital Outpatient Rates.  CMS states (1) in recent years, PFS nonfacility payment rates for IMRT have exceeded payment rates in the Hospital Outpatient Prospective Payment System (HOPPS) setting; (2) such services are highly unlikely to be more resource-intensive in freestanding radiation therapy centers than when furnished in facilities like hospitals that generally incur higher overhead costs; and (3) HOPPS payment rates are based on auditable data on hospital costs (and, by inference, are more reliable than PFS payment rates).  Interestingly, PFS payment rates already would have been about 5 percent lower than HOPPS rates for 2013.  Absent the policy changes in the CY 2013 PFS Proposed Rule, IMRT payments would have equaled approximately $461, while CMS proposes to pay $484 for IMRT in the CY 2013 HOPPS Proposed Rule.  Under the CY 2013 PFS Proposed Rule, CMS proposes to pay $285 for IMRT (8.42 RVUs * $33.8572) or about 40 percent less than HOPPS rates.

Inclusion of Missing Equipment Direct Cost Inputs for 77418
In the Proposed Rule, CMS acknowledges that seven equipment inputs had been "inadvertently omitted" and states, "we are proposing to include the seven equipment items omitted from the RUC recommendation for CPT code 77418."  Absent other changes, including the missing equipment direct cost inputs for 77418, would have increased the value for IMRT by 6 percent under current rates.  Notwithstanding the inclusion of the dropped IMRT equipment direct cost inputs, the policies relating to changes in radiation therapy inputs in the Proposed Rule result in a -7 percent reduction to radiation oncology.

  

  

A related impact on other radiation oncology codes from the cuts to the aforementioned, key radiation oncology codes is due to the so-called "indirect practice cost index" (IPCI).  Due to the nature of the IPCI, lower IMRT direct costs result in higher payments for other radiation oncology codes.  Although the IPCI for radiation oncology generally has trended lower since 2010, as a result of the cuts to IMRT, the overall IPCI increased and, thereby, improved other radiation oncology codes relative to what they otherwise would have been paid under the Proposed Rule.  Under the CY 2013 PFS Proposed Rule, the radiation oncology IPCI  increased to 1.13 from last year's 0.96.

 

In the CY 2013 PFS Proposed Rule, CMS states, "[i]n light of observations about ... IMRT ... and ... SBRT," the agency believes similar codes may be potentially misvalued and recommends the RUC review (or re-review as necessary) several additional codes listed below.  CMS also states it may consider evaluating "other CPT codes that are valued in the same manner" in future rule-making. Of note, CMS states that it "encourage[s] the use of valid and reliable alternative data sources when developing recommended values, including electronic medical records and other independent data sources."    

*    77280 (Set radiation therapy field) 

*    77285 (Set radiation therapy field)
*    77290 (Set radiation therapy field)
*    77301 (Radiotherapy dose plan imrt)
*    77338 (Design mlc device for imrt)
*    77372 (Srs linear based)
*    77373 (Sbrt delivery)
*    77402 (Radiation treatment delivery)
*    77403 (Radiation treatment delivery)
*    77404 (Radiation treatment delivery)
*    77406 (Radiation treatment delivery)
*    77407 (Radiation treatment delivery)
*    77408 (Radiation treatment delivery)
*    77409 (Radiation treatment delivery)
*    77412 (Radiation treatment delivery)
*    77413 (Radiation treatment delivery)
*    77414 (Radiation treatment delivery)
*    77416 (Radiation treatment delivery)
*    77418 (Radiation tx delivery imrt)
*    77600 (Hyperthermia treatment)
*    77785 (Hdrbrachytx 1 channel)
*    77786 (Hdrbrachytx 2-12 channel)
*    77787 (Hdrbrachytx over 12 chan)
*    88348 (Electron microscopy)

Separately, CMS states that this is the first year it is considering codes received through the public nomination process for potentially misvalued codes.  As part of this process, a commenter noted that the direct PE inputs for 77336 (Radiation Physics Consult) "no longer accurately reflect the resources used to deliver this service and may be undervalued."  CMS notes CPT code 77336 was last reviewed for CY 2003 and "there may have been changes in technology and other PE inputs since we last reviewed the service."  As such, CMS requests the AMA RUC review 77336.

 

As part of the CY 2012 PFS, CMS requested 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 and other codes may already be under review by the AMA RUC and CPT Panel.     

  

Prepared for ACRO's Governmental Affairs and Economics Committees by Liberty Partners Group, Washington, D.C.