CMS released the Final Rule for the CY 2016 Physician Fee Schedule On October 30, 2015, CMS released the Final Rule for the CY 2016 Physician Fee Schedule ("Final Rule"). The impact of the Final Rule to the overall radiaon oncology specialty is — 2%. As in past years, however, the Physician Fee Schedule combines the effect on freestanding and hospital- based providers, thereby masking the effect on freestanding providers. The impact of the Final Rule to freestanding providers is — 3%. The disaggregated effects of the rule to the different sengs are reflected in the tables below. In the Final Rule, CMS did not finalize the implementaon of the new treatment delivery and imaging codes which were delayed as part of the CY 2015 Physician Fee Schedule Final Rule. Instead, CMS will connue the use of the current G-codes for CY 2016. Because the "on-board imaging" issue related to the new treatment delivery and imaging code set, it is no longer relevant to calculaons relang to this Final Rule. Similarly, CMS' proposed "refinement" (i.e. cut) of the new treatment delivery and imaging codes also is not relevant. However, CMS did finalize its proposal to increase the equipment ulizaon assumpon for the linear accelerator from 50% to 70%, phased in over 2 years. Using the final 2016 fee schedules for both the Physician Fee Schedule and Hospital Outpaent PPS systems, Avalere esmates freestanding radiaon oncology will be paid 86.9% of what hospital outpaent departments will be paid for the same set of services. Conversion Factor In the Protecng Access to Medicare Act of 2014 (PAMA), Congress set a target for adjustments to misvalued codes in the fee schedule for calendar years 2017 through 2020, with a target amount of 0.5 percent of the esmated expenditures under the PFS for each of those four years. Subsequently, the Achieving a Beer Life Experience Act of 2014 (ABLE) accelerated the applicaon of the target by specifying it would apply for calendar years 2016 through 2018, and increasing the target to 1 percent for 2016. If the net reducons in misvalued codes in 2016 are not equal to or greater than 1 percent of the esmated expenditures under the fee schedule, a reducon equal to the percentage difference between 1 percent and the esmated net reducon in expenditures resulng from misvalued code reducons must be made to all PFS services (i.e. to the conversion factor). Impact of Final CY 2016 PFS Rule on total Allowed Charges By Seng, in Millions) CY 2015 Payments CY 2016 Payments % Change Total $1,771.8 $1,735.4 -2.1% Facility $417.4 $418.0 +0.2% Non-Facility $1,354.4 $1,317.3 -2.7% DECEMBER 2015
Transcript
CMS released the Final Rule for the CY 2016 Physician Fee Schedule
On October 30, 2015, CMS released the Final Rule for the CY 2016 Physician Fee Schedule ("Final Rule").
The impact of the Final Rule to the overall radiation oncology specialty is — 2%. As in past years, however, the Physician Fee Schedule combines the effect on freestanding and hospital- based providers, thereby masking the effect on freestanding providers. The impact of the Final Rule to freestanding providers is — 3%.
The disaggregated effects of the rule to the different settings are reflected in the tables below.
In the Final Rule, CMS did not finalize the implementation of the new treatment delivery and imaging codes which were delayed as part of the CY 2015 Physician Fee Schedule Final Rule. Instead, CMS will continue the use of the current G-codes for CY 2016. Because the "on-board imaging" issue related to the new treatment delivery and imaging code set, it is no longer relevant to calculations relating to this Final Rule. Similarly, CMS' proposed "refinement" (i.e. cut) of the new treatment delivery and imaging codes also is not relevant. However, CMS did finalize its proposal to increase the equipment utilization assumption for the linear accelerator from 50% to 70%, phased in over 2 years.
Using the final 2016 fee schedules for both the Physician Fee Schedule and Hospital Outpatient PPS systems, Avalere estimates freestanding radiation oncology will be paid 86.9% of what hospital outpatient departments will be paid for the same set of services.
Conversion Factor In the Protecting Access to Medicare Act of 2014 (PAMA), Congress set a target for adjustments to misvalued codes in the fee schedule for calendar years 2017 through 2020, with a target amount of 0.5 percent of the estimated expenditures under the PFS for each of those four years. Subsequently, the Achieving a Better Life Experience Act of 2014 (ABLE) accelerated the application of the target by specifying it would apply for calendar years 2016 through 2018, and increasing the target to 1 percent for 2016. If the net reductions in misvalued codes in 2016 are not equal to or greater than 1 percent of the estimated expenditures under the fee schedule, a reduction equal to the percentage difference between 1 percent and the estimated net reduction in expenditures resulting from misvalued code reductions must be made to all PFS services (i.e. to the conversion factor).
Impact of Final CY 2016 PFS Rule on total Allowed Charges
In the Final Rule, CMS notes that the CY 2016 Target Recapture Amount pursuant to the PAMA/ABLE Act provision will produce a gross reduction to the CF of -0.77 percent. This is partially offset by the 0.5% update to the conversion factor under the Medicare Access and CHIP Reauthorization Act of 2015. The net of these policies (along with minor adjustments due to budget neutrality for RVU adjustments) results in an estimated 2016 conversion factor of $35.8279.
NEW TREATMENT DELIVERY CODES DELAYED FOR ANOTHER YEAR
In the 2015 Proposed Rule, CMS proposed to change its processes so that new codes would be included in proposed PFS rules, rather than final PFS rules. Radiation oncology stakeholders requested that the proposed transparency process be implemented immediately in order to allow comment on new radiation oncology codes. As a result, CMS did not adopt code changes for certain radiation therapy services until they could go through notice and comment rulemaking for the 2016 PFS rule. CMS did not recognize these new CPT codes for 2015 and created G-codes in place of CPT codes for 2015 to continue current payment rates.
For the CY 2016 PFS Proposed Rule, CMS proposed new treatment delivery and imaging codes, including:
77402 (Radiation Treatment Delivery, Simple) Incorporated old 77402, 77403, 77404, and 77406 Payment roughly comparable to old codes; billable with new 77387
Payment roughly comparable to old codes; billable with new 77387
77412 (Radiation treatment delivery, complex)
Incorporated old 77412, 77413, 77414, 77416
Payment roughly comparable to old codes; billable with new 77387 77385 (IMRT treatment delivery, simple) o Split from old 77418
At least a 30% decrease from old 77418; not billable with 77387
46% lower than payments for the same code in the hospital setting ($279 for freestanding vs. $519 for HOPD)
77386 (IMRT treatment delivery, complex)
Split from old 77418
5% increase from old 77418; not billable with 77387
19% lower than payments for the same code in the hospital setting ($421 for freestanding vs. $519 for HOPD)
77387 (Guidance for localization of target volume for delivery of treatment, includes intrafraction tracking when performed)
Evolved from old 77421
180% increase from 77421 In the Final Rule, CMS stated the following:
In consideration of comments from stakeholders and our concerns as described above, however, we do not believe that, on balance, we should finalize the new code set for CY 2016. Therefore, for CY 2016, we are not finalizing our proposal to implement the new set of codes. We will continue the use of the current G-codes and values for CY 2016 while we seek more information, including public comments and recommendations regarding new codes to be developed either through the CPT process or through future PFS rulemaking.
PAGE 2
EQUIPMENT UTILIZATION
In the Proposed Rule, CMS proposed to change the utilization rate assumption used to determine the per minute cost of the capital equipment by assuming that the equipment is generally used for 35 hours per week (a 70 percent utilization rate) instead of 25 hours per week (a 50 percent utilization rate). CMS proposed to implement this change over two years.
In the Final Rule, CMS stated the following:
CMS is finalizing the proposed change in the utilization rate assumption used to determine the per minute cost of the capital equipment used for radiation therapy. Final assumptions adopted in this final rule are that the equipment is generally used for 35 hours per week (a 70 percent utilization rate) instead of 25 hours per week (a 50 percent utilization rate). CMS will implement this change over two years.
As a result of this equipment utilization policy, IMRT is cut 14% relative to last year. These cuts are mitigated by the fact that payments for many conventional radiation treatment delivery codes increase by around 16% - 18%. This increase in conventional radiation treatment delivery codes appears to be due to CMS' adoption of the RUC recommendation to include the linear accelerator for all treatment delivery codes.
States CMS:
While we are not finalizing the new code set for these services, we are finalizing our proposals to include the single linear accelerator for radiation treatment delivery services as recommended by the RUC, and to update the default utilization rate assumption for linear accelerators used in radiation treatment services from 50 to 70 percent, phased in over 2 years.
It is noteworthy that CMS' adoption of this single RUC proposal on the linear accelerator is (1) to the exclusion of all other RUC proposals as well as proposals from other stakeholders for these treatment delivery codes and (2) related to the agency's proposal to increase the equipment utilization rate.
Physician Stakeholders Comment to CMS on APMs and MIPS Under MACRA
On November 17, several physician stakeholders submitted letters to the Centers for Medicare & Medicaid Services (CMS) in response to the agency's Request for Information (RFI) Regarding Implementation of the Merit-Based Incentive Payment System, Promotion of Alternative Payment Models, and Incentive Payments for Participation in Eligible Alternative Payment Models.
To read the RTA letter, click here.
To read the ACRO letter, click here.
To read the ASTRO letter, click here.
To read the AMA group letter, click here.
AMA & CHQPR Release Guide to Alternative Payment Models
The American Medical Association and the Center for Healthcare Quality & Payment Reform released a tool for physicians, "A Guide to Physician-Focused Alternative Payment Models," which outlines the need for Alternative Payment Models (APMs), a menu of potential APM structures and tips for selecting the appropriate APM for a specific practice.
The seven options outlined in the report for addressing the most common types of opportunities and barriers physicians face include:
APM #1: Payment for a high-value service APM #2: Condition-based payment for physician services APM #3: Multi-physician bundled payment APM #4: Physician-facility procedures bundle APM #5: Warrantied payment for physician services APM #6: Episode payment for a procedure APM #7: Condition-based payment
Under the second APM approach — condition-based payment for physician services — the report addresses radiation therapy, stating:
Case Rates for Radiation Therapy for Cancer. Under this APM, a radiation oncology practice would bill for a single payment amount for an entire course of radiation therapy for a patient. The amount of payment would not be based on the specific type of treatment used, but it would be based on the type of cancer and on patient specific factors affecting the appropriate radiation therapy.
The amount of payment for a particular category of patients would be based on the average spending on the different treatment modalities used for similar patients in the past. The radiation oncologist would have the flexibility to use whichever type of treatment was most appropriate for the patient. (The American Society of Radiation Oncology is developing this type of payment model for breast cancer treatment and palliative care of bone metastases; some radiation oncology practices have implemented this approach with commercial health plans.)
The report specifically identifies the bundled payment approach developed by 21st Century Oncology and published in the International Journal of Radiation Oncology, Biology, and Physics, "Design and Implementation of Bundled Payment Systems for Cancer Care and Radiation Therapy."
To view the complete AMA & CHQPR guide, click here..
*****
The information provided in this newsletter is to be used only to educate clients on health care related news and actions from the Federal Government. Information in this newsletter is not intended to provide investment, financial, legal, medical or tax advice and should not be relied upon in that regard. Liberty Partners Group, LLC disclaims any
and all responsibility for decisions made or actions taken based on the information contained in this newsletter.
