The CMS Fee Schedule: Impact on Oncology

Published: Tuesday, Sep 18, 2012
doctor hold the cms scheduleWith the passage of yet another “doc fix” to the Medicare conversion factor in February 2012, Congress averted a threatened 27.4% cut in Medicare physician payments for the year. The solution is only temporary, and Congress will have to address the issue of Medicare payment formulas again at the end of 2012. In the meantime, though, there are several issues in the Centers for Medicare & Medicaid Services (CMS) 2012 fee schedule that are of concern to oncologists.

“Although the conversion factor is always going to be a concern, there are also reductions looming for medical and radiation oncology due to the reductions in work RVUs [relative value units], malpractice RVUs, and practice expense [PE RVUs] numbers,” said Matthew Farber, director, Provider Economics and Public Policy at the Association of Community Cancer Centers.

“Overall, if you look at the numbers that CMS put out, not counting the conversion factor, medical oncology will face a roughly 0% update, but will see a 2% reduction next year once CMS finishes the four-year transition of the practice expenses,” said Farber.

“Radiation oncology and radiology will face a much larger reduction of 4% this year, and that will increase a few more percentage points next year.” Freestanding radiology and radiation clinics will face a 4% to 6% reduction.

Misplaced value codes

One of the potentially biggest issues for oncologists is the misvalued code list. In the past, if CMS felt there was a misplaced value that was either overpaying or underpaying for a service, it would ask the Relative Value Scale (RVS) Update Committee (RUC), a panel of physicians and others that reviews codes for CMS, to evaluate the data and the work value.

Usually, the RUC reviews a select number of codes every four or five years. However, this year, the RUC is reviewing every code with more than a $10 million spend associated with it. A number of these codes affect oncology, including the most commonly used chemotherapy administration code, 96413. The concern is that the RUC will find that the work associated with administering chemotherapy is less than the amount currently reimbursed.

“Any time you shine a light on something, you are concerned that the RUC will find that the work value has decreased, and therefore, it would reduce the work RVU, and the reimbursement would go down,” Farber said.

RUC reviews do not always result in a reduction, however. The work RVUs could increase for many chemotherapy administration codes because oncologists face risk evaluation and mitigation strategy (REMS) issues, as well as drug shortages, which take time to manage.

“Doctors, pharmacists, and other staff members are spending more time obtaining the drugs or being educated about the drugs, which is essentially unreimbursed time,” Farber said. “We would argue that extra work is being done, and it is not being captured by any of the reimbursement categories. If the RUC decides that we are correct, maybe it will associate some time due to REMS with these drug codes and give a higher RVU reimbursement, but we don’t know what will happen. I certainly don’t want to create any false hopes.”

Practice expenses

Some changes to the Medicare fee schedule are already in effect, such as changes to PE RVUs numbers. Until last year, CMS had been using data from 2000, even though the cost of doing business had increased substantially over the years. Starting in 2011, CMS began using 2006 data.

In addition, 2012 is the third year of the four-year transition to the PE RVUs calculated using the Physician Practice Information Survey (PPIS) data. The 2012 PE RVUs are a 25%/75% blend of the previous PE RVUs and the new PE RVUs developed with the PPIS data. However, Congress mandated that the PPIS was not representative of oncology, Farber said, so different survey data were used to determine reimbursement for medical oncology. As a result, the reductions to medical oncology were not as steep as they would have been if oncology PE RVUs depended on PPIS.

Evaluation and management

For the most part, evaluation and management (E/M) codes have been increased for 2012—another change in effect already. These codes are based on the time the physician spends with the patient, the amount of information being discussed, and the difficulty of that information: A primary care physician providing aspirin for a headache receives a different amount than an oncologist discussing a treatment plan or a change in treatment for someone with a tumor.

“That oncology discussion would be a higher code, and the reimbursement would be higher. Many E/M codes are billed in primary care, but there are also quite a few in medical oncology,” Farber said, including the initial patient consultation, follow-up care, and treatment plans.

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