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Proposed Medicare Physician Fee Schedule

Proposed Rule Summary

On July 12, 2018, the Centers for Medicare and Medicaid Services (CMS) issued the Medicare Physician Fee Schedule (PFS) proposed rule that estimates a 2 percent payment cut to radiation oncology in 2019. The proposed rule updates the payment policies, payment rates, and quality provisions for services furnished under the MPFS effective January 1, 2019. Comments are due to CMS no later than September 10, 2018.

The MPFS pays for services furnished by physicians and other practitioners in all sites of service. These services include visits, surgical procedures, diagnostic tests, therapy services, specified preventative services and more. Payments are based on the relative resources typically used to furnish the service. Relative value units (RVUs) are applied to each service for physician work, practice expense and malpractice. These RVUs become payment rates through the application of a conversion factor, which is updated annually.

MPFS Impact Table

The MPFS Impact Table shows the estimated impact on total allowed charges by specialty of all the RVU changes. CMS proposes significant modifications to pricing for Direct Practice Expense Inputs for supplies and equipment, as well as a new coding and valuation system for Evaluation and Management Codes that result in rate reductions across all other services. This proposed payment policy results in an estimated 2 percent reduction in payment for radiation oncology and radiation therapy centers.

The MPFS conversion factor, based on the proposed 2019 rates, is set at $36.05. This update reflects the update adjustment factor of 0.25 percent as required by the Bipartisan Budget Act of 2018 and a -0.12 percent RVU budget neutrality adjustment. This is a 6-cent increase over the 2018 PFS conversion factor of $35.99.

Table 94: CY 2019 PFS Estimated Impact on Total Allowed Charges by Specialty

SpecialtyAllowed Charges (mil)Impact of Work RVU ChangesImpact of PE RVU ChangesImpact of MP RVU ChangesCombined Impact
Total$92,1730%0%0%0%
Radiation Oncology and Radiation Therapy Centers$1,7760%-2%1%-2%

Conversion Factor/Target

Proposed Update to Direct Practice Expense Inputs for Supply and Equipment Pricing

CMS is proposing to update the Direct Practice Expense (PE) inputs for supply and equipment pricing. The existing supply and equipment prices were developed in 2004-2005. In order to pursue the update, CMS contracted with StrategyGen Co. to perform a Direct Practice Input Market Research Report. StrategyGen used a variety of market research methodologies, including telephone surveys, aggregate database reviews, vendor interviews, market scans, market analysis, physician substantiation, and statistical analysis, in the development of its recommendations. The recommended price changes impact 1300 supplies and 750 equipment items, including 22 key equipment items related to radiation oncology.

CMS is proposing changes to the documentation and billing requirements for E/M services. The Agency is proposing these modifications to reduce documentation burden for physicians by allowing physicians to choose whether to use decision making or time when billing E/M codes. CMS proposes to retain the existing E/M CPT codes, which denote specific levels of care; however, levels 2-5 of the codes will be cross-walked to a single blended payment rate. The proposal allows physicians to continue billing the CPT code at whichever level of E/M services they provide the patient, but they will be paid at the single blended rate. The charts below detail the crosswalk from existing E&M codes to the new documentation and billing levels.

To address significant changes in payment, CMS proposes to phase in the new direct PE inputs over a four-year period. The Agency also notes that there may be large shifts in PE RVUs for individual codes that contain supplies and/or equipment with major pricing changes. An initial analysis indicates that for radiation oncology these fluctuations in PE RVUs are significant, particularly for CPT Code 77373 SBRT Treatment Delivery, which would experience an almost 19 percent decrease in PE RVUs. This correlates with the proposed 77 percent reduction in equipment price as detailed below.

The following chart details those radiation oncology equipment items that will experience the greatest decline in reimbursement resulting from this proposed new policy. ASTRO will work with stakeholders to actively oppose inappropriate price reductions that do not reflect the costs of the equipment. ASTRO also is concerned that these changes may violate the recent legislative extension of the radiation oncology payment freeze on the radiation treatment and delivery codes, which prevents changes to the Direct Practice Expense for these codes. A more detailed chart with additional equipment items is attached to this summary.

Equipment ItemCurrent PriceRecommended PriceChange Over 4-year Phase In
ER083 SRS System, SBRT, Six Systems$4,000,000$931,965-77%
ER072 64 Slice CT Scanner$1,860,141$665,843-64%
ER065 Water Chiller (radiation treatment)$25,656$9,847-62%
EQ012 EECP, External Counterpulsation$150,000$61,491-59%
ER039 Laser Targeting System (4 diodes)$10,350$4,603-56%
ER057 Radiation Virtual Simulation System$967,000$601,625-38%
ER052 Brachytherapy Treatment Vault$175,000$134,998-23%
EQ340 Patient Worn Telemetry System$23,537$18,566-21%

In addition to the proposed change to the Direct Practice Expense Inputs for supplies and equipment pricing, CMS is also seeking comment on whether the Agency should pursue a similar evaluation of clinical labor rates. CMS seeks comments on whether an evaluation of clinical labor rates should take place during the four-year pricing transition for supplies and equipment or at a later date once the pricing transition for supplies and equipment is complete.

Evaluation and Management Code (E/M) Modifications

CMS is proposing changes to the documentation and billing requirements for E/M services. The Agency is proposing these modifications to reduce documentation burden for physicians by allowing physicians to choose whether to use decision making or time when billing E/M codes. CMS proposes to retain the existing E/M CPT codes, which denote specific levels of care; however, levels 2-5 of the codes will be cross-walked to a single blended payment rate. The proposal allows physicians to continue billing the CPT code at whichever level of E/M services they provide the patient, but they will be paid at the single blended rate. The charts below detail the crosswalk from existing E&M codes to the new documentation and billing levels.

Comparison of Payment Rates for Office Visits New Patients

HCPCS CodeCY 2018 Non-Facility Payment RateCY 2018 Non-Facility Payment Rate Under the Proposed Methodology
99201$45$44
99202$76$135
99203$110$135
99204$167$135
99205$211$135

Comparison of Payment Rates for Office Visits Established

HCPCS CodeCY 2018 Non-Facility Payment RateCY 2018 Non-Facility Payment Rate Under the Proposed Methodology
99211$22$24
99212$45$93
99213$74$93
99214$109$93
99215$148$93

CMS is also proposing a series of adjustments to capture the variety of resource costs associated with different types of care provided in E/M visits. The proposed adjustments include the following:

  1. An E/M multiple procedure payment adjustment to account for duplicative resource costs when E/M visits and procedures with global periods are furnished together;
  2. HCPCS G-code add-ons to recognize additional relative resources for primary care visits and inherent visit complexity that require additional work beyond that which is accounted for in the single payment rates for new and established patient levels 2 through level 5 visits;
  3. HCPCS G-codes to describe podiatric E/M visits:
  4. An additional prolonged face-to-face services add-on G code; and
  5. A technical modification to the PE methodology to stabilize the allocation of indirect PE for visit services.

To establish a single blended payment for E/M codes, CMS is proposing an adjustment on all other services. CMS is seeking comment on the proposed modifications to documenting and billing for E/M services, as well as the establishment of a blended single rate for levels 2 through 5. The Agency also seeks comment on whether the proposed changes should be implemented effective January 1, 2019, delayed until January 1, 2020, or phased in over a period of time.

CPT Code 77401 Radiation Treatment Delivery, Superficial and/or Orthovoltage, per day

In the 2017 Hospital Outpatient Prospective Payment System final rule, CMS finalized new MPFS payment amounts for nonexcepted items and services furnished by nonexcepted provider-based departments (PBDs) that bill under the Hospital Outpatient Prospective Payment System. Nonexcepted items and services, as well as nonexcepted providers, are those items and services that are rendered by providers in provider-based departments, that are billed under the HOPPS after November 2, 2015.

In the 2019 MPFS proposed rule, CMS continues to believe that coding gaps exist for SRT-related professional services. While the Agency is not proposing changes to SRT coding in this proposed rule, it is asking for stakeholder input regarding whether it would be appropriate to create multiple G-codes specific to services associate with SRT, such as planning, initial patient simulation visit, treatment device design and construction associated with SRT, SRT management and medical physics consultation. CMS describes these proposed codes as being parallel to radiation treatment delivery services, such as HCPCS code G6003 Radiation Treatment Delivery; 77427 Radiation Treatment Management; 77261 Therapeutic Radiation Treatment Planning, Simple; 77332 Treatment Devices, Design and Construction Simple; and 77300 Basic Radiation Dosimetry Calculation, Central Axis Depth Dose Calculation.

Additionally, CMS seeks comment on whether the codes should be contractor-priced pending input from the CPT Editorial Panel and the RUC process.

Proposed Payment Rates under the MPFS Schedule for Nonexcepted Items and Services Furnished by Nonexcepted Off-Campus Provider-Based Departments of a Hospital

CMS is required to review, and if necessary, adjust the Malpractice (MP) RVUs by CY 2020. CMS is seeking additional comment regarding the next MP RVU update, which must occur by CY 2020. Specifically, they are seeking comment on how to improve the way that specialties in the state-level raw rate filings data are crosswalked for categorization into CMS specialty codes, which are used to develop the specialty-level risk factors and the MP RVUs.

The Agency adopted payment rates for these items and services that were based on a 50 percent reduction, also known as the Physician Fee Schedule (PFS) Relativity Adjuster, to the OPPS payment rates for 2017. CMS modified its proposal and finalized a PFS Relativity Adjuster of 40 percent for 2018.

For 2019, CMS is proposing to continue the PFS Relativity Adjuster of 40 percent for 2019. CMS is basing this decision on data collected for services reported in 2017 and proposes to maintain this PFS Relativity Adjuster for future years until updated data or considerations warrant a change to the methodology.

Malpractice

Additional information about the proposed 2019 MPFS can be found at the following links:

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