Reimbursement Bulletin
SUMMARY OF 2017 FINAL MEDICARE PAYMENT RULES
Hospital Outpatient Prospective Payment System & Medicare Physician Fee Schedule
In November of 2016, the Centers for Medicare and Medicaid Services (CMS) issued the final payment rules for both the Hospital
Outpatient Prospective System (HOPPS) and the Medicare Physician Fee Schedule (MPFS). Below is a preliminary analysis of the
key provisions of the final rules and estimated payment changes for specific radiation therapy codes and typical courses
of treatment.
MEDICARE HOSPITAL OUTPATIENT PAYMENT SYSTEM FINAL RULE
CMS did not propose significant policy changes in the hospital outpatient setting this year for radiotherapy in general. CMS did
update overall payment policies, finalizing an increase in payment rates overall by 1.7 percent.
Site Neutral Payments Provision
CMS finalized a policy to implement the new site neutral payments provision passed by Congress and signed into law last year with
some modifications. This provision requires that certain items and services, including radiotherapy services, furnished in new or
expanded off-campus provider-based departments (PBD), more than 250 yards from the hospital, shall not be considered covered
outpatient department services for purposes of HOPPS payment and those items and services will instead be paid under the
Medicare Physician Fee Schedule (MPFS) beginning January 1, 2017. CMS modified the final policy to allow excepted off-campus
PBDs to relocate temporarily or permanently without loss of excepted status due to extraordinary circumstances outside of the
hospital’s control, such as natural disasters. CMS is finalizing its proposal to allow an off-campus PBD to maintain its excepted status
under the other rules outlined in this regulation if the hospital has a change of ownership and the new owners accept the existing
Medicare provider agreement from the prior owner.
Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs
CMS finalized changes to the objectives and measures of Meaningful Use for Modified Stage 2 and Stage 3 starting with the EHR
reporting periods in calendar year 2017. Under both Modified Stage 2 in 2017 and Stage 3 in 2017 and 2018, for eligible hospitals
and critical access hospitals (CAHs) attesting under the Medicare EHR Incentive Program, CMS is eliminating the Clinical Decision
Support (CDS) and Computerized Provider Order Entry (CPOE) objectives and measures, and lowering the reporting thresholds for
a subset of the remaining objectives and measures, generally to the Modified Stage 2 thresholds.
In addition, CMS is finalizing a 90-day EHR reporting period in 2016 and 2017 for all eligible professionals, eligible hospitals, and
CAHs. CMS is extending the 90-day EHR reporting period to include 2017 in response to stakeholder comments indicating concerns
with implementing API functionalities for Stage 3, program and systems changes in 2017, as well as to allow eligible clinicians time
to transition to the Merit-based Incentive Payment System (MIPS), and to provide flexibility for all health care providers that are
preparing for Stage 3 and the implementation of 2015 Edition Certified EHR technology (CEHRT). The EHR reporting period will be
any continuous 90-day period between January 1 and December 31 in CY 2016 and CY 2017. CMS finalized a one-time significant
hardship exception from the 2018 payment adjustment for certain eligible professionals who are new participants in the EHR
Incentive Program in 2017 and are transitioning to the Merit-Based Incentive Payment System in 2017.
Proton Therapy
CMS did not propose or finalize changes to proton payment policy. The final rates below show a decrease in payment for next year.
2016 Final Rule HOPPS Per 2017 Final Rule HOPPS Per
% Change 2016 Final to
Unit Medicare Rate
Unit Medicare Rate
2017 Final Medicare Rates
CPT®
APC
Group
77520
5623
Proton treatment simple without
compensation
$506
$494
-2.4%
77522
5624
Proton treatment simple without
compensation
$1,151
$994
-13.6%
77523
5624
Proton treatment intermediate
$1,151
$994
-13.6%
77525
5624
Proton treatment complex
$1,151
$994
-13.6%
CPT Code Descriptor
High Dose Rate (HDR) Brachytherapy
CMS implemented new HDR treatment delivery codes in 2016. These codes came with a reduction in payment of approximately
5%. The final rates for 2017 include a payment increase of approximately 5-6%, making the rates slightly higher than the 2015 rates.
2016 Final Rule HOPPS Per 2017 Final Rule HOPPS Per
% Change 2016 Final to
Unit Medicare Rate
Unit Medicare Rate
2017 Final Medicare Rates
CPT®
APC
Group
77770
5624
HDR brachytherapy; 1 channel
$696
$738
6.0%
77771
5624
HDR brachytherapy; 2-12 channels
$696
$738
6.0%
77772
5624
HDR brachytherapy; over 12
channels
$696
$738
6.0%
77767
5622
HDR brachytherapy skin surface,
lesions up to 2 cm or 1 channel
$194
$204
5.2%
77768
5622
HDR brachytherapy skin surface,
lesions greater than 2 cm or 2 or
more channels
$194
$204
5.2%
0394T
5622
HDR electronic brachytherapy, skin
surface application
$194
$204
5.2%
0395T
5624
HDR electronic brachytherapy,
interstitial or intracavitary
$696
$738
6.0%
CPT Code Descriptor
Below are total estimated reimbursement payments by course of care based on our preliminary analysis.
HOPPS ESTIMATED PER COURSE NATIONAL AVERAGE MEDICARE REIMBURSEMENT
2016
2017
% Change 2016 to 2017
Final Rule
2D (10 fractions)
$3,886
$4,061
4%
3D (With or without image-guided radiation therapy (IGRT), 35 fractions)
$11,273
$11,800
5%
Intensity-modulated radiation therapy (IMRT (Simple or complex, 35 fractions)
$20,556
$20,040
-3%
Stereotactic radiosurgery (SRS) (Comprehensive APC)
$8,726
$8,948
3%
Stereotactic body radiation therapy (SBRT) (3 fractions)
$8,628
$8,687
1%
SBRT (5 fractions)
$11,972
$11,988
0%
Proton (25 fractions)
$31,583
$27,772
-12%
Accelerated partial breast irradiation (APBI) HDR (10 fractions)
$13,817
$13,704
-1%
Prostate HDR (3 fractions)
$12,592
$13,637
8%
GYN tandem ovoid HDR (3 fractions)
$11,737
$7,1001
7%
Skin HDR (10 fractions)
$7,576
$7,192
-5%
Modality
1 Reduction due to creation of Comprehensive APC. Comprehensive APCs package all procedures listed on a hospital claim form reported with the
primary service.
Number of fractions assumed for 3D, IMRT, SRS, SBRT and proton courses of care are in line with assumptions made by the
Advisory Board in years past. 2D and HDR courses codes as per education from billing and coding seminars.
MEDICARE PHYSICIAN FEE SCHEDULE (PHYSICIANS AND FREESTANDING CENTERS)
FINAL RULE
CMS did not propose nor finalize significant reimbursement changes to freestanding radiation therapy centers or radiation oncology
physicians. Last year, Congress passed and the President signed into law the Patient Access and Medicare Protection Act, which
contained a provision to freeze the Medicare Physician Fee Schedule rates for conventional and IMRT treatment delivery payments
for freestanding centers at 2016 levels through 2018. As a result, CMS is not finalizing policy changes that would directly impact
radiation oncology. CMS finalized a 2017 MPFS conversion factor (CF) of $35.8887 (current 2016 CF is $35.8043), a slight increase
from the previous year. Overall the final rule impact to radiation oncology is 0% and 0% for freestanding radiotherapy centers.
Radiation Treatment Device Codes
CMS identified radiation treatment device CPT codes 77332, 77333, and 77334 through the high expenditures by specialty screen.
These services represent an incremental increase of complexity from the simple to the intermediate to the complex in design
of radiation treatment devices. CMS believes the recommended work relative value units (RVUs) overstate the work involved
in furnishing these services, as they do not sufficiently reflect the degree to which the AMA RVS Update Committee (RUC)
concurrently recommended a decrease in work time. Therefore, CMS is not accepting the ASTRO & RUC recommendations to
value the three radiation treatment device codes and instead is finalizing their proposal to reduce the work RVUs which will cause
a reduction in payment for two of the codes. The use of these codes as part of a typical course of care, specifically SRS, is causing
slight reductions to some of the below treatment modalities.
Below are total estimated reimbursement payments by course of care based on our preliminary analysis.
MPFS PER COURSE NATIONAL AVERAGE MEDICARE REIMBURSEMENT
2016
Professional
2016
Technical
2016
Global
2017
Professional
2017
Technical
2017
Global
Professional
% Change
2016 to 2017
2D (10 fractions)
$1,082
$3,906
$4,989
$1,077
$3,890
$4,967
-0.5%
-0.4%
-0.4%
3D with IGRT
(35 fractions)
$3,281
$13,621
$16,901
$3,292
$13,669
$16,961
0.3%
0.4%
0.4%
3D without IGRT
(35 fractions)
$2,566
$11,734
$14,300
$2,564
$11,753
$14,316
-0.1%
0.2%
0.1%
IMRT (35 fractions)
$3,349
$17,198
$20,548
$3,379
$17,327
$20,706
0.9%
0.8%
0.8%
SRS
$1,528
$2,485
$4,013
$1,524
$2,445
$3,969
-0.3%
-1.6%
-1.1%
SBRT (3 fractions)
$1,743
$5,531
$7,274
$1,740
$5,514
$7,254
-0.2%
-0.3%
-0.3%
SBRT (5 fractions)
$1,743
$8,284
$10,027
$1,740
$8,288
$10,028
-0.2%
0.1%
0.0%
APBI HDR
$3,134
$7,521
$10,654
$3,156
$7,576
$10,732
0.7%
0.7%
0.7%
Prostate HDR
$2,148
$2,120
$4,268
$2,156
$2,120
$4,276
0.4%
0.0%
0.2%
GYN tandem ovoid
HDR
$2,396
$3,462
$5,858
$2,338
$3,475
$5,813
-2.4%
.4%
-0.8%
$777
$1,300
$2,077
$775
$1,285
$2,060
-0.2%
-1.1%
-0.8%
Modality
Skin HDR
(2 cm lesion)
Technical %
Global %
Change 2016 Change 2016
to 2017
to 2017
Conversion factor (CF) of $35.8043 utilized for CY 2016 rates and CF of $35.8887 for CY 2017 final rates.
Number of fractions assumed for 3D, IMRT, SRS, and SBRT courses of care are in line with assumptions made by the Advisory Board
in years past. 2D and HDR courses codes as per education from billing and coding seminars.
CPT Copyright 2016 American Medical Association (AMA). All rights reserved. CPT is a registered trademark of the AMA. Applicable FARS/DFARS Restrictions Apply to Government Use. Fee schedules, relative
value units, conversion factors and/or related components are not assigned by the AMA, are not part of CPT, and the AMA is not recommending their use. The AMA does not directly or indirectly practice medicine
or dispense medical services. The AMA assumes no liability for data contained or not contained herein.
The information provided herein has been gathered from third-party sources which include, but are not limited to government and commercially available coding guides, professional societies and research
conducted by coding and reimbursement consultants, and is subject to change without notice as a result of complex and frequently changing laws, regulations, rules and policies. This information should not be
construed as authoritative and is presented for illustrative and informational purposes only. It does not constitute either reimbursement or legal advice. The entity billing Medicare, other government programs
and/or third-party payers is solely responsible for determining medical necessity, the proper site for delivery of any services and to submit accurate and appropriate codes, charges, and modifiers for services that
are rendered and reflected in a patient’s medical record. Varian does not have access to medical records, and therefore cannot recommend codes for specific cases. Varian recommends that you consult with your
payers, reimbursement specialists and/or legal counsel regarding coding, coverage and reimbursement matters. Varian’s products have been cleared for use by the FDA as set forth in our Instructions for Use and
nothing in this document should be construed as promoting any use outside of those instructions.
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Intended Use Summary
Varian Medical Systems’ linear accelerators are intended to provide stereotactic radiosurgery and precision radiotherapy for lesions, tumors, and conditions
anywhere in the body where radiation treatment is indicated.
Safety
Radiation treatments may cause side effects that can vary depending on the part of the body being treated. The most frequent ones are typically temporary and
may include, but are not limited to, irritation to the respiratory, digestive, urinary or reproductive systems, fatigue, nausea, skin irritation, and hair loss. In some
patients, they can be severe. Treatment sessions may vary in complexity and time. Radiation treatment is not appropriate for all cancers.
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