Varian - Radiation Therapy Alliance

Varian Medical Systems, Inc.
525 9th Street NW, Suite 450
Washington, DC 20004
Telephone: 202.629.3441
www.varian.com
September 6, 2013
BY ELECTRONIC DELIVERY
Marilyn Tavenner
Administrator and Chief Operating Officer
Centers for Medicare & Medicaid Services
Department of Health and Human Services
Room 445-G
Hubert H. Humphrey Building
200 Independence Avenue, S.W.
Washington, D.C. 20201
Re:
CMS-1600-P: Revisions to Payment Policies under the Physician Fee Schedule,
Clinical Laboratory Fee Schedule & Other Revisions to Part B for CY 2014
Dear Administrator Tavenner:
Varian Medical Systems (Varian) is pleased to offer comments on the Medicare Physician Fee
Schedule (PFS) proposed rule for Calendar Year (CY) 2014.1 Varian is the world’s leading
supplier of radiotherapy products for treating cancer. Our products include medical linear
accelerators, simulators, proton therapy systems, and a broad range of accessories and
interconnected software tools for planning, verifying, and delivering the most advanced
radiation, radiosurgical, and brachytherapy treatments. Our electronic medical record facilitates
efficient management of treatment for patients undergoing medical or radiation/proton therapies.
For CY 2014, CMS proposes several changes that would significantly reduce Medicare
payments for radiation therapy procedures in freestanding facilities. Freestanding facilities
delivering radiotherapy services are an extremely important part of delivering integrated cancer
care for Medicare beneficiaries. Our comments address three issues of great importance to the
beneficiaries and physicians who use Varian’s treatment devices to treat cancer.
I.
CMS Should Not Cap Payments under the Physician Fee Schedule using Rates
Established for the Hospital Outpatient Prospective Payment System or
Ambulatory Surgical Center Payment Systems.
CMS, in CY 2014, proposes to cap the practice expense (PE) relative value units (RVUs) for
more than 200 codes under the physician fee schedule (PFS) in the non-facility setting at the
1
78 Fed. Reg. 43282 (July 19, 2013).
2
combination of the Medicare payment under the PFS in the facility setting and either the
Outpatient Prospective Payment System (OPPS) or Ambulatory Surgical Center (ASC) payment
amounts.2 For purposes of this comparison, CMS used the 2014 PFS non-facility payments,
calculated using the 2013 conversion factor, and 2013 OPPS and ASC rates. This proposal
would reduce radiation oncology payments for breast and lung cancer treatment episodes by 16
percent.
Varian believes the proposed OPPS cap is an inappropriate payment methodology in the facility
setting. CMS appears to have based this proposal on incorrect assumptions about the relative
costs of care in site of service and the quality of data used under each payment system. CMS
believes that care generally should cost more in the facility setting due to additional regulations
that apply to hospitals and ASCs. CMS also questions the timeliness and accuracy of some of
the data used in the PFS, and assumes that the OPPS rates are based on more accurate data.3
CMS’ assumptions overlook legitimate differences in Medicare’s data and payment
methodologies for physicians’ offices and facility settings, as well as legitimate differences in the
cost of care in each setting. The physician fee schedule uses resource-based RVUs, calculated
based on data collected from physician specialty societies, while the OPPS is based on hospitals’
costs and charges for prior years, and the ASC payment system is based on a percentage of OPPS
rates. CMS should not assume that physicians’ costs for labor, equipment and supplies are lower
than hospitals’, or that CMS’s methods of estimating costs from hospitals’ charges are always
correct. As CMS has seen in recent years, estimated costs for services under the OPPS are
susceptible to annual fluctuations due to changes in hospitals’ cost reporting practices that do not
reflect changes in the cost of care. In addition, PFS payments are established for single services
and may include global periods of up to 90 days, while OPPS and ASC rate often package
together payments for multiple services performed on a single day, but do not include global
periods. OPPS and ASC rates also are established for groups of services assigned to the same
ambulatory payment classification (APC), rather than for individual codes. Therefore, the PFS
rate and the OPPS or ASC rate for a single service often do not include the same costs.
Of the 16 radiation oncology codes subject to this proposal, there following provides two
examples of how utilizing the OPPS to cap the PFS disproportionately lowers reimbursement in
the facility setting.
2
3
CPT code 77413, Radiation treatment delivery -- PFS payments would be cut 18.45%
from the 2013 rate of $231.36 under the proposed rule using 2013 OPPS rates as the
cap. However, for 2014, CMS proposes an increase in the OPPS payment for 77413 of
23.9% making the proposed 2014 rate $222.35, thereby creating even a greater disparity
between OPPS and MPFS.
CPT code 77301, Radiotherapy dose plan IMRT – PFS payments would be cut 27.1%
from the 2013 rate of $1993.75 under the proposed rule using 2013 OPPS rates as the
cap. However, for 2014, CMS proposes an increase in the OPPS payment for 77301 of
90% making the proposed 2014 rate $1879.06.
78 Fed. Reg. at 43296 (July 19, 2013).
Id.
3
Varian urges CMS to not implement the OPPS cap; however, if CMS chooses to implement a
cap, CMS should compare rates using PFS and OPPS data from the same year to capture the
most recent hospital cost data. In addition, CMS should compare PFS rates to the OPPS mean
costs for individual codes, not for APCs, in order to facilitate more equitable comparison.
Varian recommends that CMS not cap PFS payment rates using ASC payment rates due to the
fact that ASC rates reflect a percentage of hospitals’ rates, not the true costs of providing care in
the ASC setting.
II.
CMS Should Apply the Adjustment to Reflect the Revised Medicare Economic
Index to the Work RVUs Instead of to the Conversion Factor.
CMS proposes to revise the Medicare Economic Index (MEI) by reclassifying and revising
certain cost categories, and to adjust the RVUs to reflect the increased share of the MEI’s costs
attributable to physician compensation.4 CMS appears to adjust the PE and malpractice RVUs
and to apply an adjustment to the conversion factor instead of to the work RVUs, consistent with
the agency’s approach to revising RVUs following changes in the MEI in the past, although the
adjustments are not clearly explained in the proposed rule. These adjustments result in a
reduction of almost 10 percent in the PE RVUs and reductions in the total RVUs for most
services.
Varian is deeply concerned about the proposed changes because of the significant impact they
have on radiation oncology services, which have high practice expenses due to the use of
advanced technologies with significant capital expense. CMS predicts that radiation oncology
and radiation therapy centers will see some of the largest reductions of any specialty due to this
policy.5 These changes, when added to the proposed OPPS/ASC cap, result in expected
reductions of 5 percent for radiation oncology and 13 percent for radiation therapy centers.6
This policy will also negatively affect the RVUs used by other payers. Although CMS proposes
to maintain budget neutrality by increasing the conversion factor, other payers that use the
Medicare RVUs may not make a similar adjustment. The total RVUs for these services would
be reduced, causing payment reductions that do not reflect changes in the cost of care. When
CMS made adjustments to reflect changes in the MEI in 2011, it attempted to maintain stability
in the RVUs by increasing the PE RVUs, holding the work RVUs constant, and applying a
reduction to the conversion factor. We recommend that CMS protect the stability of the RVUs
in 2014 by increasing the work RVUs instead of applying a deeper reduction to the PE RVUs.
Alternatively, CMS, as it has done with other major payment changes, should phase in the
reductions. CMS should not implement the proposed revisions until the agency clearly explains
its methodology and allows stakeholders to comment.
4
Id. at 43312, 43514.
Id. at 43514.
6
Id.
5
4
III.
CMS Should Adopt the OPPS Proposed Rule Proposal Related to the Stereotactic
Radiosurgery (SRS) CPT Codes after CPT Codes 77372 and 77373 are Revalued
and Reviewed to Ensure Appropriate Payment.
In the Medicare hospital outpatient prospective payment system (OPPS) proposed rule for CY
2014, CMS is proposing in CY 2014 to replace the four existing SRS HCPCS G-codes (G0173,
G0251, G0339, and G0340), with the SRS CPT codes 77372 and 77373.7 CMS is proposing to
assign CPT code 77373 as the only code to APC 0066 “Level I Stereotactic Radiosurgery” and
both single session cranial treatment codes (CPT codes 77371 and 77372) as the only two codes
assigned to APC 0067 (Level II Stereotactic Radiosurgery).
Varian supports the proposal to consolidate the existing SRS codes. Varian agrees with CMS’
assertion that since the introduction of the HCPCS G-codes and CPT codes for radiosurgery,
technology has changed and advanced and most radiosurgery treatment devices incorporate
“robotic” features and are clinically similar. The consolidation of these codes will eliminate
confusion among providers and redundancy regarding codes “that no longer represent
meaningful distinctions, given current technology and clinical practice.”
Varian also recommends that CMS’ proposal be consistent in the Medicare Physician Fee
Schedule and requests that CMS send CPT codes 77372 and 77373 to the American Medical
Association Specialty Society Relative Value Scale Update Committee (RUC) to be revalued and
to ensure that the direct PE inputs accurately reflect the resources used in providing radiosurgery
services and delete the two SRS HCPCS G-codes (G0339 and G0340) that are currently paid in
the non-facility setting through PFS.
*
*
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In closing and on behalf of Varian, thank you for this opportunity to provide our comments on
the PFS proposed rule for CY 2014. We are grateful for the opportunity to engage in substantive
discussions about payment for radiation, radiosurgical, and brachytherapy treatments. Varian
remains interested in arranging practice site visits at facilities that use Varian equipment for
CMS officials, and we continue to stand ready should you have any questions about the issues,
concerns, and suggestions discussed above.
Sincerely,
Andrew Whitman
Vice President, Government Affairs
7
78 Fed. Reg. at 43593-94.