ACRO Alert: Proposed Rule for the CY 2014 Physician Fee Schedule Cuts Radiation Oncology by 5%

Cuts to Radiation Oncology in CY 2014 Physician Fee Schedule Proposed Rule Relate to OPPS/ASC Cap

On July 8, 2013, CMS released the Proposed Rule for the CY 2014 Physician Fee Schedule ("Proposed Rule"). Comments are due to the Agency by September 6, 2013.

Click here for a table reflecting code-level impacts. Table summary is provided below:

Aggregate Impact

CMS indicates that the overall impact of the Proposed Rule to radiation oncology is -5% and is due to three factors:

The OPD/ASC cap (-4%)
Medicare Economics Index (MEI) revision 9-2%)
Other minor changes (+1%)

The effects on allowed charges billed to the specialty code "Radiation Oncology" are reflected in the table below:

Impact of Proposed CY 2014 PFS Rule on Total Allowed Charges
	OPD/ASC Cap	MEI Revision	Other Changes	Total
Radiation Oncology	-4%	-2%	+1%	-5%

Conversion Factor

These changes do not include the effects of the scheduled January 1, 2014 cut to the 2014 conversion factor (i.e. the "SGR"), estimated under the Proposed Rule at 21%. CMS notes in the Proposed Rule that, due to budget neutrality requirements from other policies in the rule, the 2014 conversion factor is estimated to be $35.6653 (assuming no SGR cuts), rather than the current 2013 conversion factor of $34.023.

Radiation Treatment Vault

Last year, CMS expressed confusion regarding the handling of the radiation treatment vault as a direct cost and indicated its intention to address the status of the radiation treatment vault as part of this year's NPRM. However, the CY 2014 Physician Fee Schedule Proposed Rule made no proposed change to the treatment of the radiation treatment vault and it remains a direct PE input for 77418 and other treatment delivery codes.

Impact of OPD/ASC Cap

The Proposed Rule seeks to limit the nonfacility practice expense RVUs (PERVUs) for individual codes so that the total nonfacility PFS payment amount would not exceed the total combined amount Medicare would pay for the same code in the facility setting. In other words, CMS is proposing to cap the payments for certain nonfacility services at the facility rate plus the lower of the OPPS or ASC payment. Other specialties impacted by this policy include independent laboratories (-25% cut), pathology (-6% cut), vascular surgery (-3% cut), interventional radiology (-2% cut), and neurology (-1% cut).

Several important parameters apply to this policy, including:

OPPS Cap Uses 2013 OPPS Payment Rates. The OPPS cap is based on 2013 OPPS payment rates, not 2014 OPPS payment rates and proposed 2014 OPPS rates have increased significantly due to CMS's proposal to bundle certain services if performed during the same day.
Codes with Low Volume in the OPPS or ASC Excluded. CMS is proposing "to exclude any service for which 5% or less of the total number of services are furnished in the OPPS setting relative to the total number of PFS/OPPS allowed services". This appears to indicate the radiation oncology codes would not be capped at the ASC rates due to the low frequency of radiation oncology services provided in the ASC setting.
Services with No Separately Payable OPPS Rate Excluded. CMS is proposing to exclude services from this policy that do not have separately payable OPPS/ASC rates.

Revision of the Medicare Economic Index (MEI)

CMS proposes to "reorganize" cost categories based on recommendations from the MEI Technical Advisory Panel (TAP). Practice expense cost weights are revised down from 51.734% to 49.134% due to the proposed reclassification of expenses for non-physician clinical staff who can bill independently from non-physician compensation (i.e. "practice expense") to "physician compensation." This reorganization results in an increase in the physician compensation weight and a decline in the practice expense cost component

ACRO staff is researching the details of the OPD/ASC Cap and the MEI Revision policies and will update members on our ongoing advocacy efforts relating to this and other legislative initiatives.

Sincerely,

Arno Mundt, MD, FACRO

President