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Targeting Cancer Care

Medicare Cuts


2013 Medicare Physician Fee Schedule estimates a negative 7 percent cut to radiation oncology
Medicare responds to ASTRO calls to reduce cuts from the 15 percent proposed in July  

On November 1, 2012, CMS released the 2013 final Medicare Physician Fee Schedule (MPFS) which included an estimated negative seven percent cut to radiation oncology and negative nine percent reduction to radiation therapy centers. While still a sizeable cut to radiation oncology, this is a significant reduction from the respective 15 and 19 percent cuts included in the 2013 proposed rule released in July.

Since the proposed rule, ASTRO engaged in a comprehensive advocacy campaign to urge CMS to reverse the cuts. By scaling back these cuts, we believe Medicare has helped to preserve access to life-saving cancer treatments for Medicare beneficiaries. ASTRO applauds the bipartisan group of more than 130 members of Congress representing 43 states, led by Senators Debbie Stabenow (D-Mich.) and Richard Burr (R-N.C.) and Representatives Joe Pitts (R-Penn.) and Frank Pallone (D-N.J.), for working to protect critical access to radiation oncology services for our nation’s seniors. The Senate and House letters to CMS sent a strong message that Medicare cuts of this magnitude are not what America’s cancer patients deserve. We appreciate that Medicare heard the concerns of Congress, cancer patients, ASTRO and others in making a sound decision. The efforts of individual ASTRO members contacting their local representatives and advocating on behalf of the specialty and their patients was also an essential component of this improved result.

Estimated Impact of 2013 Final MPFS Rule on Radiation Oncology
The chart that follows is an extract from the final rule and provides a summary of the impact on radiation oncology of the various payment policies being implemented by CMS in 2013. The reimbursement changes to radiation oncology services are a result of a number of factors including:

  • Final year of a four year transition to new practice expense data (also known as PPIS)
  • Implementation of new and revised codes, revisions to the Multiple Procedure Payment Reduction (MPPR) policy, new utilization, and other factors
  • New transitional care management codes (payment to internal medicine for the management of a patient upon discharge)
  • Input changes to certain radiation therapy oncology services (IMRT delivery (77418) and SBRT delivery (77373))

The chart below is an aggregated estimate so the impact on an individual physician will depend upon proportion of Medicare FFS services provided and type of services provided. Additionally, this estimate does not take into account any changes to the Medicare physician conversion factor

Table 135: CY 2013 PFS Final Rule with Comment Period Estimated Impact on Total Allowed Charges 

Specialty  Allowed Charges (mil) Impact of End of PPIS Transition  New and Revised Codes, MPPR, New Utilization and Other Factors  Updated Equipment Interest Rate Assumption  Transitional Care Management  Impact Changes for Certain Radiation Therapy Services  Total 
Radiation Oncology $1,988 -4% 2% -3% -1% -1% -7%
Radiation Therapy Centers $72 -5% 4% -5% -1% -1% -9%

A more detailed discussion on the various policies follows. View a code level RVU comparison (2013 versus 2012) of major radiation oncology services.

Physician Practice Information Survey (PPIS)
Practice Expense (PE) Relative Value Units (RVUs) represent the resources used in furnishing supplies, office rent/lease, equipment and personnel wages (excluding malpractice expense) when providing physician services.

In the CY 2010 PFS final rule CMS finalized a proposal to update the PE/HR data based on the new Physician Practice Information Survey (PPIS) conducted by the American Medical Association (AMA) and supported by various medical specialty societies, including ASTRO. Because of the magnitude of payment reductions for some specialties resulting from the use of PPIS data, CMS finalized a 4-year transition from the previous PE RVUs to the PE RVUs developed using the new PPIS data. CY 2013 is the final year of the transition; therefore, the CY 2013 PE RVUs are developed based entirely on the PPIS data, except when noted. While radiation oncology is experiencing a negative impact in 2013 (negative 4 percent on radiation oncology and negative 5 percent on radiation therapy centers) as a result of this new data, the negative impact was significantly lessened after efforts by ASTRO requesting CMS to review and revise the data.

On a related issue, CMS discussed capturing the costs for digital imaging in the calculation of PE RVUs. A variety of imaging services across the fee schedule include direct PE inputs that reflect film-based technology instead of digital technology. CMS has accepted the film-based technology inputs in the RUC recommendations as proxy inputs until a more comprehensive migration of such inputs from film to digital imaging can be executed. CMS anticipates updating all of the associated inputs in future rulemaking.

Interest Rate Assumption
CMS is proposing to finalize a proposal to update the interest rates used in the practice expense (PE) methodology.  This interest rate impacts the per minute rate for medical equipment and is used in the calculation of PE RVUs.  Currently the interest rate is 11 percent. CMS will use a “sliding scale” approach based on the current Small Business Administration (SBA) maximum interest rates for different categories of loan size (price of the equipment) and maturity (useful life of the equipment). Capital-intensive specialties, such as radiation oncology, are projected to be negatively impacted by this policy.

Maximum Interest Rates for SBA Loans 

Loan Amount  Loan Less than 7 Years   Loan 7 Years or More 
$50,000 or more Prime + 2.25 percent Prime + 2.75 percent
$25,000 - $50,000 Prime + 3.25 percent Prime + 3.75 percent
Less than $25,000 Prime + 4.25 percent Prime + 4.75 percent

The current Prime rate is 3.25 percent.

CMS will update the interest rate assumption through rulemaking to account for fluctuations in the Prime rate and/or changes to the SBA’s formula to determine maximum allowed interest rates. CMS intends to update the interest rate calculation through future rulemaking only in years when we broadly update one or more of the other direct practice expense inputs. Accordingly, CMS anticipates updating the interest rate calculation less frequently than annually. In our comment letter on the proposed rule, ASTRO made a recommendation to update the interest rate less frequently than annually since the recent volatility in PE RVUs has been difficult for physicians. ASTRO is pleased CMS responded positively to this recommendation.

2013 Medicare Physician Conversion Factor
While Medicare updates most of their payment rates each year for inflation, physician services are updated by a formula mandated in legislation known as the Sustainable Growth Rate (SGR). SGR establishes a spending target for physician services. When physician spending exceeds the target, Medicare physician payment rates decline. The 2012 Medicare physician conversion factor is $34.0376 and is set to expire on December 31, 2012. The final rule sets the CY 2013 Medicare physician conversion factor at $25.0008, which includes a budget neutrality adjustment of -0.1 percent. The conversion factor reflects the -26.5 percent cut that will take effect on January 1, 2013. Negative updates have been expected every year since 2002, although Congressional action has averted payment reductions since 2003. Congressional action will be needed again in order to avoid a payment reduction in 2013 and ASTRO anticipates that Congress will act again to avert this payment reduction.

CPT Code 77418 IMRT Treatment Delivery and CPT code 77373 SBRT Treatment Delivery
CPT code 77418 is experiencing a negative fifteen percent reduction. This is significantly less than the forty percent reduction in the proposed rule. CPT code 77373 is experiencing a negative twenty percent reduction.  This is less than the twenty-eight percent reduction in the proposed rule.

  2013 Final PE RVUs   2012 NF PE RVUS  % Change 
77418 11.91 13.98 -15%
77373 37.23 46.82 -20%

CMS is finalizing their proposals to adjust the procedure time assumption for IMRT delivery to 30 minutes and to adjust the procedure time assumption for SBRT delivery to 60 minutes. Based on comments received on their proposal from ASTRO and others, CMS is incorporating a second radiation therapist for CPT code 77418. The second therapist will be allocated 30 minutes of service period time, consistent with the first. Additionally, CMS is incorporating an additional five minutes post time to the first radiation therapist and three minutes intra-service time to an RN/LPN. CMS will also incorporate a new equipment item called “IMRT accelerator” to replace the linear accelerator and collimator used as current direct PE inputs for CPT code 77418. Based on the evidence submitted by commenters, the new equipment item will be priced at $2,641,783 in the direct PE input database. Additionally, CMS is incorporating the radiation treatment vault and water chiller as direct PE inputs for both CPT codes 77418 and 77373, although CMS stated that the typical circumstances of the radiation treatment vault’s use are unclear and the agency will address the status of the radiation treatment vault as a direct PE input during CY 2014 rulemaking. CMS is also updating the price of the “laser, diode, for patient positioning (Probe)” from $7,678 to $18,160. Additionally, CMS is reinstating seven pieces of equipment that were inadvertently dropped from the code in CY 2012.  ASTRO and other stakeholders made multiple requests to CMS to make this change. CMS is adopting these direct PE inputs on an interim basis for CY 2013.

Codes with Stand Alone Procedure Time
CMS is finalizing its proposal to review and make adjustments to CPT codes with stand-alone procedure time assumptions used in developing nonfacility (freestanding) PE RVUs. CMS has identified several codes (mostly radiation oncology codes) that have annual Medicare allowed charges of $100,000 or more, include direct equipment inputs that amount to $100 or more, and have PE procedure times of greater than five minutes. Although there are other CPT codes that are valued in the same manner they are not proposing to review them at this time. The following radiation oncology services have been identified:

  • 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 Hdr brachytx 1 channel
  • 77786 Hdr brachytx 2-12 channel
  • 7787 Hdr brachytx over 12 chan

The review of these codes has the potential to have a significant impact on Medicare reimbursement for radiation oncology services in the future.

IMRT Plan 77301
CPT code 77301 was identified as potentially misvalued through the High Expenditure Procedure Code screen and recently reviewed by the RUC.  In the final rule CMS assigned interim values to this code for CY 2013. There is no change in the work value of the code and CMS accepted the RUC recommendation of 7.99 work RVUs for this code. CMS made some revisions to the PE inputs for this code from the AMA RUC recommendations. These changes had a minimal impact on this code.

CPT code  2013 Work RVU   2012 Work RVU  2013 PE RVU  2012 PE RVU  % Change in PE RVU 
77301 (global) 7.99 7.99 49.98 49.69 1.89%
77301 – 26 (professional) 7.99 7.99 3.23 3.17 0.58%
77301 – TC (technical) N/A N/A 46.75 46.52 0.49%

Physics Consultation - CPT Code 77336
CY 2013 is the first year CMS is considering codes they received through the new public nomination process for potentially misvalued codes. In the 60 days following the release of the CY 2012 final MPFS rule CMS received nominations and supporting documentation for review of 36 CPT codes. One of these nominations included CPT code 77336 Continuing medical physics consultation, including assessment of treatment parameters, quality assurance of dose delivery, and review of patient treatment documentation in support of the radiation oncologist, reported per week of therapy.

CMS is finalizing their proposal to review this service as potentially misvalued, as well as any other services that may be within this family of CPT codes. CMS continues to believe that changes in technology may have altered the direct practice expense inputs associated with CPT code 77336.

Oncology Measures Group for PQRS
The Physician Quality Reporting System (PQRS) is a pay-for-reporting program that uses a combination of incentive payments and downward payment adjustments to promote reporting of quality information by eligible professionals (EPs). CMS is finalizing its proposal for an oncology measures group for PQRS 2013 and beyond as requested by ASTRO. Participating via a measures group versus individual measures significantly reduce the burden of participating in PQRS and increases the chances of success. The following measures are included in the measures group:

  • 71 Breast Cancer: Hormonal Therapy for Stage IC-IIIC Estrogen Receptor/Progesterone Receptor (ER/PR) Positive Breast Cancer
  • 72 Colon Cancer: Chemotherapy for Stage III Colon Cancer Patients
  • 110 Preventive Care and Screening: Influenza Immunization
  • 130 Documentation of Current Medications in the Medical Record
  • 143 Oncology: Medical and Radiation – Pain Intensity Quantified
  • 144 Oncology: Medical and Radiation – Plan of Care for Pain
  • 194 Oncology: Cancer Stage Documented
  • 226 Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention

CMS also finalized the proposal to retire PQRS #105 (Prostate Cancer: Three Dimensional (3D) Radiotherapy) and not include it in PQRS 2013 or beyond.

In a separate summary, ASTRO will provide a more detailed summary of the finalized proposals for the 2013 PQRS program, 2013 Medicare eRx program, the Physician Compare website and the Value Based Payment Modifier.

Comments on Bundling of Radiation Therapy Services
The Secretary is required to conduct a study that examines options for bundled or episode-based payment to cover physicians’ services currently paid under the PFS under section 1848 of the Act for one or more prevalent chronic conditions or episodes of care for one or more major procedures by January 1, 2013.  Bundling is one method for aligning incentives for hospitals, post-acute care providers, physicians, and other practitioners to partner closely across all specialties and settings that a patient may encounter to improve the patient’s experience of care. In this final rule CMS indicated that Medicare needs to move beyond this “repackaging” of codes and examine the potential of a larger bundled payment within the fee schedule. 

CMS stated that if CMS were to engage in a bundling project that includes radiation therapy, they would be interested in exploring whether it could also include treating and managing the side effects that result from radiation therapy in addition to the radiation therapy itself. Such an episode-based payment would allow Medicare to pay for the full course of the typical radiation therapy as well as the many medical services the patient may be receiving to treat side effects. ASTRO has met several times with high-ranking CMS officials, informing them of the Society’s commitment to work on payment reform in radiation therapy, which may include bundling of services.

Thoracic Surgeon SBRT Code (32701)
In 2013 there is a new code to describe non-cranial or non-spinal stereotactic radiosurgery or stereotactic body radiation therapy performed in the thoracic region of the body (CPT code 32701). It will be reported by the thoracic surgeon not the radiation oncologist. CMS accepted the RUC recommendation of 4.18 RVUs for this new code.  Radiation oncologists will continue to report 77435 for radiation treatment management and 77373 for SBRT delivery (free standing). 

Improving the Valuation of the Global Surgical Package
Procedures with a global period lack the detail in claims data and documentation in order for CMS to review and assess the appropriateness of their RVUs. In the proposed rule CMS requested comments on methods of obtaining accurate and current data on E/M services furnished as part of a global surgical package. They were especially interested in and invited comments on a claims-based data collection approach that would include reporting E/M services furnished as part of a global surgical package, as well as other valid, reliable, generalizable and robust data to help identify the number and level of E/M services typically furnished in the global surgical period for specific procedures. CMS will review the comments received as they consider how best to measure the number and level of visits that occur during the global period. There are a few radiation oncology procedures with a 90 day global period that could be impacted by any change in this policy.

Expansion of the Multiple Procedure Payment Reduction (MPPR) Policy
In this rule, CMS finalized proposals to expand the application of the MPPR in several non-radiation oncology areas including nuclear medicine (due to a technical error it was not being applied to certain codes), diagnostic cardiovascular services, and ophthalmology services.

The final rule is scheduled to be published in the November 16, 2012 Federal Register and can be currently accessed from the CMS website. CMS will accept comments on the final rule until December 31, 2012. ASTRO is reviewing the rule and will provide more details as they become available.


Content last updated 11/8/2012
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