US Oncology Submits Physician Fee Schedule Comments to CMS

Comments Address Key Issues in CMS' Medicare Physician Fee Schedule Proposed Rule

In comments submitted to CMS today, US Oncology expressed serious concern with the significant cuts to Medicare oncology payments proposed by the Centers for Medicare and Medicaid Services (CMS) in its 2010 Medicare Physician Fee Schedule Proposed Rule. After reviewing the comments submitted, CMS is expected to issue a Final Rule on or around November 1, 2009.

Among the issues covered in US Oncology's comment to CMS are:

Practice Expense Methodology

The combined effect of the proposed changes to the practice expense (PE) methodology for 2010 would be unsustainable reductions in Medicare reimbursement to radiation oncology of 19% and 6% to medical oncology. Because cuts impact each procedure differently, many practices will face case-mix adjusted reductions in Medicare reimbursement of 20% to 30%. According to a recent survey conducted by the American Society for Therapeutic Radiation and Oncology (ASTRO), reductions in reimbursement of this magnitude likely would create access and quality of care issues as community cancer centers stop accepting or limit acceptance of Medicare beneficiaries, lay-off physicians and non-physician staff, reduce staff salaries, consolidate locations or even close.

Equipment Utilization Rate Assumption

At least one-third of the proposed payment reductions to radiation oncology attach to CMS' plans to increase the assumption about the utilization of equipment costing over $1 million from 50% to 90%. The admitted basis for this plan is a small, under-powered Medicare Payment Advisory Committee (MedPAC) study that measured the utilization of advanced diagnostic imaging, not radiation oncology. The only utilization rate data available addressing radiation therapy (RT) equipment comes from a just-completed ASTRO study that reported utilization rates for most types of RT equipment at or below 50%.

Balanced Budget Act (BBA) § 4505(d) requires CMS to use "actual data on equipment utilization" to "the maximum extent practicable" when it builds the PE component of the physician fee schedule (PFS). Thus, CMS lacks the statutory authority to set an aspirational utilization rate of 90% for RT equipment in the face of the ASTRO survey showing rates more consistent with an assumption of 50%. US Oncology submits the ASTRO survey leaves CMS no choice under the BBA but to maintain the current utilization rate assumption of 50% for radiation therapy equipment in 2010.

AMA PPIS Survey

CMS' proposal to use the AMA's Physician Practice Information (PPI) survey, instead of its current data sources, as the basis for calculating indirect PE relative value units (RVUs) and apportioning PE between direct and indirect costs is responsible for about two-thirds of the proposed reductions in Medicare reimbursement facing radiation oncology. Substitution of the PPI survey also underlies equally unsustainable payment reductions proposed for the drug administration services typically billed by medical oncologists.

Based on a review of data used by CMS to create their final proposal, US Oncology submits that information derived from an extremely small sample (only 50 medical oncologists and 71 radiation oncologist provided usable data) is too variable to be consistent with the "sound data practices" required of supplemental surveys under BBRA § 212 ( the precision of PE/hour is 14% for medical oncology and 21% for radiation oncology), and is silent on the distribution of the hand-full of surveyed specialists between private practice, hospital-based practice or academia. US Oncology urges CMS to recognize the statutory constraints under which it is required to operate and reject the PPI survey. Putting aside the statutory issues, the survey is statistically inadequate for use in the determination of PE RVUs in its current form. If Congress enacts the necessary changes, CMS and/or the AMA take the steps required to ensure improvements to the precision of the PPI survey, and CMS then decides to move forward with a change in the data sources used to determine PE RVUs, CMS should phase in the change over four years to allow time for a refinement period and for physicians to adjust to the resulting redistributed payment rates.

Consultation Codes

CMS has proposed eliminating all consultation codes and redistributing the work RVUs for those services to other evaluation and management codes in a budget neutral way. The likely result of this change will be an increase in reimbursement to most primary care physicians but a reduction in payments made to specialists who frequently consulted with other less experienced or expert practitioners. We disagree with CMS' assertion that the now largely resolved documentation issues associated with properly billing consults was the only justification for the higher payments available when a consultation code is billed. Specialists who consult with physicians with less training, experience and expertise to facilitate appropriate ongoing treatment of a patient by the requesting physician are often asked to address complex cases that require significant cognitive work to develop and clearly spell out an appropriate treatment plans for implementation by the requesting practitioner.

Before CMS moves forward with the proposed elimination of consultation codes, US Oncology hopes it will rigorously assess the barriers to treatment plan development, care coordination and care quality that might arise. Many cancer patients, for various reasons, including travel distances and shortages of specialists in their communities, must receive ongoing care from requesting physicians who need and willingly ask for guidance from more experienced or more highly trained consulting specialists. In oncology, we particularly worry about the impact on Medicare beneficiaries fighting less common cancers from their homes in rural areas. We also suspect consults will become more necessary if the looming shortage of oncologists is not soon reversed. CMS should recognize the need to continue paying appropriately for such services.

High-Dose Rate (HDR) Brachytherapy

US Oncology supports the decision to refer the HDR brachytherapy codes (CPT 77785-77787) to the Relative Value Update Committee (RUC) for further review. Payment rates for these codes reflect a number of errors and omissions that require correction to reverse the unjustified payment reductions that have been in place since January 1, 2009. We note too that adoption of the flawed PPI survey in 2010 will further reduce Medicare reimbursement for HDR brachytherapy. Absent improvements -- not reductions -- in reimbursement rates, a just-released survey conducted by the American Brachytherapy Society suggest many radiation oncologists will close their HDR brachytherapy programs, switch patients to external beam therapy, or refer them to hospitals for care.

To read the full comment document submitted today to CMS click here.