The Lynx Group

Medicare Proposes Rewarding Quality, Cutting Payments for Oncology Providers

September 2012, Vol 3, No 6

On July 6, 2012, the Centers for Medicare & Medicaid Services (CMS) issued the Physician Fee Schedule (PFS) and Hospital Out­patient Prospective Pay­ment System (HOPPS) proposed rules for fiscal year 2013. These rules include a number of proposed changes aimed at improving quality and promoting value in cancer care in the Medicare program. Although many of these changes are positive, a number of proposed cuts to payment rates, particularly to services performed by radiation oncologists, could have a devastating impact on oncology providers and patients.

In this article we highlight some of the major proposals that will impact the entire oncology team. Of particular note is the addition of a new oncology group in the Physician Quality Re­porting System (PQRS), as well as a new G-code for postdischarge transitional care management services. These 2 additions highlight an in­creased focus on paying for value and for quality in the oncology space. The final rules are expected to be published later this fall.

The 2013 PFS Proposed Rule
The 2013 PFS proposed rule takes several major steps toward increasing the value and the efficiency of oncology care. Specifically, CMS continues the process of implementing the value-based payment modifier required by the Affordable Care Act (ACA), in­cluding the addition of a new oncology group in the PQRS. Further­more, CMS proposes to create a new Health­care Common Procedure Coding Sys­tem G-code that would be used to describe postdischarge transitional care management services furnished within 30 days after the date of discharge from an inpatient facility.

This new oncology group encompasses 8 quality measures, including hormone therapy for estrogen receptor/progesterone receptor–positive breast cancer; chemotherapy for stage III colon cancer; influenza immunization; documentation of current medi­cations in the medical record; quantification of pain intensity for patients with cancer who are treated with chemotherapy or radiation therapy; plan of care for pain for patients with cancer who are treated with chemo­therapy or radiation therapy; documentation of cancer stage for patients with breast, colon, and rectal cancers; and screening and cessation counseling for tobacco use. These measures promise to further reward (or negatively adjust) payment rates for groups of eligible providers who meet the proposed criteria for satisfactory reporting of data. The addition of a new oncology group opens a new pathway for oncology providers to successfully participate in the PQRS, which is a positive step toward rewarding better cancer care.

CMS also proposes to create a new G-code for calendar year 2013 that specifically describes postdischarge transitional care management services, including all non–face-to-face services related to transitional care management that are provided by a community physician or by a qualified nonphysician practitioner within 30 calendar days after the date of discharge to community-based care from an inpatient acute-care hospital, psychiatric hospital, long-term care hospital, skilled nursing facility, in­patient rehabilitation facility, hospital outpatient for observation services, or partial hospitalization services. This new code is a dramatic step forward in rewarding a healthcare system that provides a continuum of quality care. Oncology providers will play an important role in ensuring appropriate transitions to and from facilities.

Among the most criticized of proposals from CMS in the 2013 PFS rule relates to a dramatic reduction in payment for 2 radiation therapy services. In the proposed rule, CMS indicated that based on patient experience in­formation obtained about the length of intensity-modulated radiation therapy (IMRT) and stereotactic body radiation therapy (SBRT), it will reduce the procedure time for both treatments to more accurately take into account actual patient experiences. As a result, CMS proposes to reduce the procedure time for delivery of IMRT from 60 minutes to 30 minutes and for delivery of SBRT from 90 minutes to 60 minutes (a 40% and 28% reduction, respectively). Under this proposal, total payments to radiation oncologists would be reduced by 7%, and payments to radiation therapy centers would decline by 8%. When combined with other proposed changes to the PFS, payments to these providers would be reduced by 15% and 19%, respectively.

The 2013 HOPPS Proposed Rule
Among the most significant of proposals in the 2013 HOPPS rule for the cancer community is a continuance of a hospital-specific payment adjustment for cancer hospitals to reflect the higher costs associated with cancer hospitals. This positive payment adjustment builds on the policies adapted in the 2012 HOPPS rule, and it is determined to address the concerns of many providers and patients that the outpatient costs incurred by cancer hospitals exceed the costs incurred by other hospitals. The ACA directed the Secretary of Health and Human services to study this concern, and, if costs were found to be higher, directed the secretary to adjust payment to appropriately reimburse cancer hospitals for the higher cost burden. For 2013, CMS proposes to continue the policies adopted in last year’s final rule, including adopting a target payment-to-cost ratio of 0.91 for eligible cancer hospitals.

Overall, both the PFS and HOPPS proposed rules signal an increasing shift in paying for value. Although a number of cuts to providers are concerning (and a looming cut to the sustainable growth rate remains on the horizon), the focus paid to rewarding quality cancer care is encouraging.

Mr Margulies is an Associate at Foley Hoag, LLP, Washington, DC; Mr Slotnik is a Partner, Health Policy Strategies, LLC, Washington, DC

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