2007: What’s 2007: What’s New?New?

Bobbi BuellBobbi Buell

Version 1.0Version 1.0

January, 2007January, 2007

Disclaimer (from CMS)Disclaimer (from CMS)“ This presentation was current at the time it was printed or downloaded. This presentation was prepared as a tool to

assist providers and is not intended to grant rights or impose obligations. Although every reasonable effort has been made to assure the accuracy of the information within these pages, the ultimate responsibility for the correct submission of claims and response to any remittance advice lies with the provider of services.

The Centers for Medicare & Medicaid Services (CMS) employees, agents, and staff make no representation, warranty, or guarantee that this compilation of information is error-free and will bear no responsibility or liability for the results or consequences of the use of this presentation. This publication is a general summary that explains certain aspects..implementation, but is not a legal document. This presentation was current at the time it was printed or downloaded. This presentation was prepared as a tool to assist providers and is not intended to grant rights or impose obligations. Although every reasonable effort has been made to assure the accuracy of the information within these pages, the ultimate responsibility for the correct submission of claims and response to any remittance advice lies with the provider of services.

The Centers for Medicare & Medicaid Services (CMS) employees, agents, and staff make no representation, warranty, or guarantee that this compilation of information is error-free and will bear no responsibility or liability for the results or consequences of the use of this presentation. “

From the CMS NPI Power PointThat goes ditto for me!

I

Session ObjectivesSession Objectives

Provide update on changes in Medicare Provide update on changes in Medicare physician payment for 2007physician payment for 2007

Show impact of new reimbursement Show impact of new reimbursement changeschanges

Explain all applicable coding changesExplain all applicable coding changes Update information about Evaluation & Update information about Evaluation & Management ServicesManagement Services

Discuss optimal strategies for 2007.Discuss optimal strategies for 2007.

Medicare – the big Medicare – the big picturepicture

$336 billion spent in 2005$336 billion spent in 2005 2.7% of GDP in 20052.7% of GDP in 2005 7.3% of GDP by 20357.3% of GDP by 2035

Medicare Part BMedicare Part B Physician services, outpatient hospital, Physician services, outpatient hospital, DME, some drugs, physical therapy.DME, some drugs, physical therapy.

Paid for by general revenue and Paid for by general revenue and beneficiary premiumsbeneficiary premiums

Premiums are set to cover 25% of Premiums are set to cover 25% of projected cost---this means patients projected cost---this means patients will be paying more and more. will be paying more and more. Beneficiary out of pocket costs and Beneficiary out of pocket costs and premiums will grow faster than income.premiums will grow faster than income.

Expenditure growth will exceed GDP Expenditure growth will exceed GDP growth by at least 6% over the next growth by at least 6% over the next decadedecade

Part B Patient Costs Part B Patient Costs 20072007

Part BPart B ･･ Deductible: $131 / yearDeductible: $131 / year Standard Premium: $93.50 / month from $88.50Standard Premium: $93.50 / month from $88.50 Income-Adjusted for wealthier beneficiariesIncome-Adjusted for wealthier beneficiaries

Income-related monthly adjustment amountsSingle = Less than or equal to $80,000 = $0.00 = $93.50Joint Return= Less than or equal to $160,000 =$0.00 = $93.50

Single =Greater than $80,000 and less than or equal to $100,000 = $12.50 = $106.00Joint =Greater than $160,000 and less than or equal to $200,000 = $12.50 = $106.00

Single =Greater than $100,000 and less than or equal to $150,000 = $31.20 = $124.70Joint = Greater than $200,000 and less than or equal to $300,000 = $31.20 = $124.70

Single= Greater than $150,000 and less than or equal to $200,000 = $49.90= $143.40Joint = Greater than $300,000 and less than or equal to $400,000 = $49.90= $143.40

Single = Greater than $200,00 = $68.60 = $162.10Joint = Greater than $400,000 = $68.60 = $162.10

Part CPart C

Medicare managed care plans Medicare managed care plans (Medicare Advantage)(Medicare Advantage)

Paid for by Part A and B Paid for by Part A and B funding streams.funding streams.

Expected that more people will Expected that more people will join over the next decade, but join over the next decade, but estimates were not reached when estimates were not reached when Part D kicked in.Part D kicked in.

Part C EligibilityPart C Eligibility

Medicare Advantage Eligibility Must be enrolled in Medicare Parts A & B;

enrollees are still in the Medicare program, Must continue to pay the Part B premium ($93.50 /

month in 2007), Must live in the plan’s service area, Must not have end-stage renal disease (ESRD) at

time of enrollment

Medicare Part DMedicare Part D

Prescription drug coveragePrescription drug coverage Paid for by general revenue and Paid for by general revenue and beneficiary premiumsbeneficiary premiums

More out of pocket costs for More out of pocket costs for beneficiariesbeneficiaries

More coverage for cancerMore coverage for cancer More unpaid work for practices, More unpaid work for practices, but most practices are not but most practices are not bogged down.bogged down.

Medicare physician payment Medicare physician payment basics basics Payments are based on RVUs for each codePayments are based on RVUs for each code The pool of RVUs is fixed – any changes The pool of RVUs is fixed – any changes must be budget neutral--we had one of must be budget neutral--we had one of the few exceptions in 2004-2005.the few exceptions in 2004-2005.

The Medicare conversion factor The Medicare conversion factor determines the overall level of Medicare determines the overall level of Medicare paymentspayments

A formula spelled out in the Medicare A formula spelled out in the Medicare statute determines the annual update to statute determines the annual update to the conversion factor and that has been the conversion factor and that has been a disaster.a disaster.

How RVUs Are UsedHow RVUs Are Used

3 inputs go into the total RVUs3 inputs go into the total RVUs Work = Face-to-face physician time, Work = Face-to-face physician time,

plus intensity of workplus intensity of work Practice expense = practice expense Practice expense = practice expense

relative to other procedures (with no relative to other procedures (with no intensity of expense)intensity of expense)

Malpractice insurance costs (< 5%) = Malpractice insurance costs (< 5%) = malpractice riskmalpractice risk

Equation is ((W*WGPCI)+(PE*PEGPCI)+Equation is ((W*WGPCI)+(PE*PEGPCI)+(M*MGPCI)) times the conversion factor (M*MGPCI)) times the conversion factor = Fee Schedule Allowable for all codes = Fee Schedule Allowable for all codes except labs and drugsexcept labs and drugs

This year there is a budget This year there is a budget neutrality withhold that changes neutrality withhold that changes the equation.the equation.

Just This Year…Medicare Just This Year…Medicare ONLY ONLY

There is a budget neutrality factor of 10.1%…There is a budget neutrality factor of 10.1%… Steps to calculate your payment:Steps to calculate your payment: ((WRVU*0.8994(ROUND))*WGPCI)+(PE*PEGPCI)((WRVU*0.8994(ROUND))*WGPCI)+(PE*PEGPCI)

….etc.….etc.

1.1. Work RVU X 0.8994Work RVU X 0.8994

2.2. Round this result to two places using the EXCEL Round this result to two places using the EXCEL formulaformula

3.3. Apply this as the WORK RVU in the formula on the Apply this as the WORK RVU in the formula on the preceding page.preceding page.

How does CMS determine the How does CMS determine the update?update? A formula spelled out in the A formula spelled out in the Medicare statute determines the Medicare statute determines the annual changeannual change

Known as the Sustainable Growth Known as the Sustainable Growth Rate or SGR system or Medicare Rate or SGR system or Medicare BoomerangBoomerang

There are three componentsThere are three components Sustainable growth rate (SGR)Sustainable growth rate (SGR) Medicare Economic Index (MEI)Medicare Economic Index (MEI) Annual update adjustment factor (UAF)Annual update adjustment factor (UAF)

SGRSGR

Put in place to control growth in Put in place to control growth in spending on physician servicesspending on physician services

Link changes in spending to factors Link changes in spending to factors affecting the cost of providing affecting the cost of providing services to Medicare beneficiaries services to Medicare beneficiaries and to economic growthand to economic growth

SGR used to set an annual target SGR used to set an annual target for spending on physician servicesfor spending on physician services

SGR formulaSGR formula

SGR is the product of four SGR is the product of four factorsfactors Change in physician feesChange in physician fees Change in Medicare fee for service Change in Medicare fee for service enrollmentenrollment

Change in real per capita GDPChange in real per capita GDP Change in law and regulation Change in law and regulation affecting spending on physician affecting spending on physician servicesservices

Calculating the annual fee Calculating the annual fee schedule updateschedule update Annual update to the conversion Annual update to the conversion factor is the product of:factor is the product of: Medicare Economic Index (MEI)Medicare Economic Index (MEI) Update Adjustment FactorUpdate Adjustment Factor

Update Adjustment Factor Update Adjustment Factor FormulaFormula.75 × Target spending.75 × Target spending0606 – Actual – Actual spendingspending0606

Actual spendingActual spending0606

++

.33 × Target spending .33 × Target spending 96 – 0696 – 06 – – Actual spendingActual spending96 – 0696 – 06

Actual spendingActual spending0505 × SGR × SGR0606

Annual updateAnnual update

Statute defines a floor and Statute defines a floor and ceiling for the UAFceiling for the UAF

UAF can’t be more than MEI +3% UAF can’t be more than MEI +3% or less than MEI -7%or less than MEI -7%

Final 2007 update = MEI – 7% Final 2007 update = MEI – 7%

Flaws with UAF Flaws with UAF

Setting of target – SGR and all Setting of target – SGR and all its flawsits flaws

Calculation of actual Calculation of actual expendituresexpenditures

Cumulative aspect of formulaCumulative aspect of formula

Sources of spending Sources of spending growthgrowth Increasing volume and intensity Increasing volume and intensity of office visitsof office visits

Minor proceduresMinor procedures Imaging servicesImaging services Laboratory testsLaboratory tests Physician-administered drugsPhysician-administered drugs

Here’s the deal…Here’s the deal…

SGR system is fatally flawedSGR system is fatally flawed Cannot account for technological Cannot account for technological advances and expansion of medical advances and expansion of medical knowledgeknowledge

Inappropriately linked to GDPInappropriately linked to GDP Including the cost of Part B drugs Including the cost of Part B drugs overstates spending that is under overstates spending that is under physician controlphysician control

Cumulative nature of system means the Cumulative nature of system means the problem can only get worse without a problem can only get worse without a permanent fix…that’s why we have Band-permanent fix…that’s why we have Band-Aids like this year and last year.Aids like this year and last year.

Alternatives to SGRAlternatives to SGR

Annual update linked to MEI?Annual update linked to MEI? Pay for performance? 2007 PVRP is a Pay for performance? 2007 PVRP is a start for this! start for this!

New formula to calculate the target?New formula to calculate the target? Separate targets by region, type of Separate targets by region, type of serviceservice

Watch for a discussion this Spring Watch for a discussion this Spring when MedPac goes to Congress with when MedPac goes to Congress with recommendations!recommendations!

This Year’s SGR FixThis Year’s SGR Fix The fix is in!The fix is in!

A freeze next year of the Conversion Factor A freeze next year of the Conversion Factor (stays at $37.8975)---but allowables are NOT (stays at $37.8975)---but allowables are NOT frozen.frozen.

A 1.5% reporting sweetener after July 1 for A 1.5% reporting sweetener after July 1 for reporting PVRP quality measures, if you report reporting PVRP quality measures, if you report for = or > 80% of reportable services. But, you for = or > 80% of reportable services. But, you will see no payment until 2008.will see no payment until 2008.

A PVRP measure for Oncology will be the revised A PVRP measure for Oncology will be the revised disease status codes from 2006.disease status codes from 2006.

GPCI floor will be reinstated to support rural GPCI floor will be reinstated to support rural areas.areas.

Establishes a fund to promote payment Establishes a fund to promote payment ‘stability’ in 2008.‘stability’ in 2008.

Increases payment for ESRD of 1.6%.Increases payment for ESRD of 1.6%.

This Year’s SGR FixThis Year’s SGR Fix Extends the treatment of certain physician pathology services Extends the treatment of certain physician pathology services

for technical component.for technical component. Extends MMA rate for brachytherapy. Allows brachytherapy Extends MMA rate for brachytherapy. Allows brachytherapy

to be paid at hospital costs for another year.to be paid at hospital costs for another year. Clarifies the payment process under CAP--post-payment Clarifies the payment process under CAP--post-payment

review process.review process. Requires reporting of hemoglobin and hematocrit as ‘quality Requires reporting of hemoglobin and hematocrit as ‘quality

indicators’ for cancer anti-anemia drugs in indicators’ for cancer anti-anemia drugs in 20082008.. Providers will be paid for administration of Part D vaccines in Providers will be paid for administration of Part D vaccines in

their offices in 2007their offices in 2007.. Extends the Recovery Audit Contractor Audits beyond test Extends the Recovery Audit Contractor Audits beyond test

statesstates..

2007 Physician payment 2007 Physician payment changeschanges Five year review of RBRVSFive year review of RBRVS New practice expense New practice expense methodologymethodology

DRA cut to in-office imagingDRA cut to in-office imaging

Five year review of Five year review of RBRVSRBRVS

CMS proposed large increases CMS proposed large increases for many evaluation and for many evaluation and management (EM) servicesmanagement (EM) services

For example, 99214 payment will For example, 99214 payment will increase from $83 to $90 increase from $83 to $90

E&M Is Better?E&M Is Better?

Code 2006 Code 2007 Descriptor 2007 $ 2006 $ Difference99211 99211 Office/outpatient visit, est $20.09 $21.60 -7%99212 99212 Office/outpatient visit, est $36.76 $38.66 -5%99213 99213 Office/outpatient visit, est $59.50 $52.68 13%99214 99214 Office/outpatient visit, est $90.20 $82.62 9%99215 99215 Office/outpatient visit, est $122.03 $120.14 2%99241 99241 Office consultation $48.51 $50.40 -4%99242 99242 Office consultation $89.44 $92.09 -3%99243 99243 Office consultation $122.41 $122.79 0%99244 99244 Office consultation $179.63 $173.19 4%99245 99245 Office consultation $222.84 $223.97 -1%

Five year review of Five year review of RBRVSRBRVS

Budget neutrality requirementBudget neutrality requirement CMS instituted 10% reduction to be CMS instituted 10% reduction to be applied to all work RVUs as we saw applied to all work RVUs as we saw previously.previously.

Alternative was 5% reduction in Alternative was 5% reduction in conversion factorconversion factor

Impact of budget neutrality options Impact of budget neutrality options varies by service due to weight of varies by service due to weight of the work RVUs, but 70% of all the work RVUs, but 70% of all physician services are reduced in physician services are reduced in 2007. 2007.

Practice expensePractice expense

New method will cut Medicare New method will cut Medicare payments to Oncology by an payments to Oncology by an estimated 5-7% over five years estimated 5-7% over five years depending upon what codes you usedepending upon what codes you use

PE RVUS for drug administration, PE RVUS for drug administration, imaging and other technical imaging and other technical component procedures decreasecomponent procedures decrease

PE RVUs for EM increasePE RVUs for EM increase

New practice expense New practice expense formula formula Calculate direct practice Calculate direct practice expense portion of RVUs with a expense portion of RVUs with a “bottom-up” approach instead of “bottom-up” approach instead of former “top-down” methodformer “top-down” method

Eliminate non-physician work Eliminate non-physician work pool (NPWP) pool (NPWP)

Use supplemental practice Use supplemental practice expense data from specialties.expense data from specialties.

Include clinical labor in Include clinical labor in indirect cost formulaindirect cost formula

2007 Drug 2007 Drug AdministrationAdministration

Code 2006 Code 2007 Descriptor 2007 $ 2006 $ Difference90760 90760 Hydration iv infusion, init $61.39 $63.29 -3%90761 90761 Hydrate iv infusion, add-on $18.95 $20.09 -6%90765 90765 Ther/proph/diag iv inf, init $75.04 $77.31 -3%90766 90766 Ther/proph/dg iv inf, add-on $24.25 $25.77 -6%90767 90767 Tx/proph/dg addl seq iv inf $39.79 $42.45 -6%90768 90768 Ther/diag concurrent inf $22.74 $24.63 -8%90772 90772 Ther/proph/diag inj, sc/im $19.33 $18.57 4%90773 90773 Ther/proph/diag inj, ia $18.19 $18.95 -4%90774 90774 Ther/proph/diag inj, iv push $57.23 $57.60 -1%90775 90775 Ther/proph/diag inj add-on $26.15 $26.91 -3%96401 96401 Chemo, anti-neopl, sq/im $58.36 $52.68 11%96402 96402 Chemo hormon antineopl sq/im $42.45 $45.86 -7%96405 96405 Chemo intralesional, up to 7 $121.65 $113.31 7%96406 96406 Chemo intralesional over 7 $145.15 $145.91 -1%96409 96409 Chemo, iv push, sngl drug $119.76 $122.41 -2%96411 96411 Chemo, iv push, addl drug $68.97 $70.87 -3%96413 96413 Chemo, iv infusion, 1 hr $165.99 $172.81 -4%96415 96415 Chemo, iv infusion, addl hr $37.14 $39.03 -5%96416 96416 Chemo prolong infuse w/pump $179.63 $185.70 -3%96417 96417 Chemo iv infus each addl seq $81.48 $84.51 -4%96420 96420 Chemo, ia, push tecnique $109.90 $110.66 -1%96422 96422 Chemo ia infusion up to 1 hr $181.91 $192.90 -6%96423 96423 Chemo ia infuse each addl hr $78.07 $78.83 -1%96425 96425 Chemotherapy,infusion method $178.50 $179.26 0%96440 96440 Chemotherapy, intracavitary $370.64 $405.12 -9%96445 96445 Chemotherapy, intracavitary $360.03 $393.76 -9%96450 96450 Chemotherapy, into CNS $300.15 $325.54 -8%96521 96521 Refill/maint, portable pump $145.91 $153.11 -5%96522 96522 Refill/maint pump/resvr syst $110.28 $110.66 0%96523 96523 Irrig drug delivery device $27.67 $28.04 -1%96542 96542 Chemotherapy injection $182.29 $192.52 -5%

Multiple imaging codes-TC component reduced by 50% was proposed Multiple imaging codes-TC component reduced by 50% was proposed for multiple imaging in related families--will be a reduction of 25% for multiple imaging in related families--will be a reduction of 25% 2007 in -TC2007 in -TC

These codes must fall into the same “family”These codes must fall into the same “family” MRI, MRA, CT, CTA, UltrasoundMRI, MRA, CT, CTA, Ultrasound Hard on physicians that own their own equipment/free-standing imagingHard on physicians that own their own equipment/free-standing imaging

DRA Reduction: certain imaging codes’-TC will be compared with DRA Reduction: certain imaging codes’-TC will be compared with imaging APCs and will be reduced to the HOPD levelimaging APCs and will be reduced to the HOPD level

Multiple imaging reduction taken first; then the DRA ReductionMultiple imaging reduction taken first; then the DRA Reduction

Huge Huge reductions seen estimated by some Oncology practices (35-40%).reductions seen estimated by some Oncology practices (35-40%).

MEDICARE 2007 PART BMEDICARE 2007 PART BOther components

2007 Medicare Payments for 2007 Medicare Payments for Office-Administered DrugsOffice-Administered Drugs

Payments for drugs based on 106% of manufacturer’s Payments for drugs based on 106% of manufacturer’s average sales price (ASP + 6%)average sales price (ASP + 6%)

Manufacturers report the ASPs for their drugs to the Manufacturers report the ASPs for their drugs to the Centers for Medicare & Medicaid Services (CMS) within Centers for Medicare & Medicaid Services (CMS) within 30 days after the end of each calendar quarter30 days after the end of each calendar quarter

Payment amounts for multiple-source drugs are determined Payment amounts for multiple-source drugs are determined by weighting each drug’s ASP by its sales volume for each by weighting each drug’s ASP by its sales volume for each NDC within the category.NDC within the category.

2007 Medicare Payments for Office-2007 Medicare Payments for Office-Administered DrugsAdministered Drugs

Payments are adjusted quarterly with 2-Payments are adjusted quarterly with 2-quarter lagquarter lag For example, payment amounts for July-For example, payment amounts for July-September quarter are based on ASPs for September quarter are based on ASPs for January-March quarter. This hurts if any January-March quarter. This hurts if any sizable price increase is taken by a sizable price increase is taken by a manufacturer.manufacturer.

New drugs are paid at 106% of wholesale New drugs are paid at 106% of wholesale acquisition cost (WAC) until ASP data acquisition cost (WAC) until ASP data are collected, usually 2-3 quarters.are collected, usually 2-3 quarters.

Principal Problems with Principal Problems with ASP $ASP $

““Underwater” drugsUnderwater” drugs Some drugs are not available to some physicians Some drugs are not available to some physicians at the Medicare payment amountat the Medicare payment amount

No way to account for it in a cost outlier No way to account for it in a cost outlier system.system.

Price increases not reflected for 2-3 quarters Price increases not reflected for 2-3 quarters whichwhich may cause payment amount to be less than the may cause payment amount to be less than the current drug pricecurrent drug price

other costs are not covered, e.g. supplies, other costs are not covered, e.g. supplies, handling, sales tax, etc.handling, sales tax, etc.

Prompt Pay Discount given to wholesalers taken out Prompt Pay Discount given to wholesalers taken out of ASP.of ASP.

Drug admin payment and coding rules do not cushion Drug admin payment and coding rules do not cushion the blow as was projected.the blow as was projected.

RBRVS And Private RBRVS And Private PayersPayers

Need to examine every aspect and Need to examine every aspect and component of RBRVScomponent of RBRVS Year of Fee ScheduleYear of Fee Schedule RVUsRVUs Use of GPCIsUse of GPCIs Conversion FactorConversion Factor Use of Budget UpdateUse of Budget Update

Drug PaymentDrug Payment Additional FeesAdditional Fees Protocol PictureProtocol Picture Off-label Laws In Your StateOff-label Laws In Your State

Oncology Quality Oncology Quality Demonstration Projects Demonstration Projects

(2005-2007)(2005-2007) 2005 Demonstration Project2005 Demonstration Project

Paid with intravenous chemotherapyPaid with intravenous chemotherapy Measures level of nausea/vomiting/ fatigue painMeasures level of nausea/vomiting/ fatigue pain $130.00/day$130.00/day

2006 Demonstration Project2006 Demonstration Project Paid with office visits (99212-99215)Paid with office visits (99212-99215) Question about where in treatment; whether treatment is on Question about where in treatment; whether treatment is on

NCCN/ASCO guidelines; and stage of disease.NCCN/ASCO guidelines; and stage of disease. $23.00/day$23.00/day

2007 No Demonstration Project2007 No Demonstration Project Code changes released 11/1/2006Code changes released 11/1/2006

G-code Changes 1/1/2007G-code Changes 1/1/2007 Codes for the focus of the visit (G9050-G9055) were re-Codes for the focus of the visit (G9050-G9055) were re-

classified to coverage code “I”: This means that, as of classified to coverage code “I”: This means that, as of 1/1/2007, these codes are not covered by Medicare.1/1/2007, these codes are not covered by Medicare.

Codes for adherence to clinical guidelines (G9056-G9062) Codes for adherence to clinical guidelines (G9056-G9062) were re-classified to coverage code “I”: Again, it seems that were re-classified to coverage code “I”: Again, it seems that Medicare as of January 1, 2007 will not cover these codes.Medicare as of January 1, 2007 will not cover these codes.

Codes for disease status (G9063-G9130) had a pricing change Codes for disease status (G9063-G9130) had a pricing change to price “00” meaning they will not be paid in 2007.to price “00” meaning they will not be paid in 2007.

Several long descriptors for disease status were changed or Several long descriptors for disease status were changed or swapped, along with some additions. swapped, along with some additions.

These codes will be used in the PVRP starting in July.These codes will be used in the PVRP starting in July.

Hospital Outpatient Hospital Outpatient Prospective Payment (APCs)Prospective Payment (APCs)

Elements of the payment system

Unit of payment – the individual service

Can bill for multiple services on same day

Classification system – ambulatory payment classification (APC) groups

Relative weights

Single value for each APC that reflects relative costliness of that service compared to others, based on median costs

Exception: New technology APCs

Conversion factor – transforms relative weight into payment

Hospital OutpatientHospital OutpatientProspective PaymentProspective Payment

Base payments

Base payment covers the hospital’s costs of providing the service (physician paid separately)

Base payment built on total cost-based payment-including coinsurance-in 1996

60 percent of payment is adjusted by the hospital wage index

Updated annually using hospital market basket

Hospital Outpatient Hospital Outpatient PaymentPayment

For Medical Oncology Drug payments are weird

Pass-through for 2-3 years paid at ASP plus 6% Drugs over $50 after pass-through are paid at ASP plus

6% (until 1/1/2007) and then $55 is the threshold. Many drugs bundled in with no payment Spending on drugs is about 8% of HOPPS expenditures

(according to MedPac)

Drug administration has traditionally been paid at a PER VISIT (not per hour) rate, which will change in 2007

Hospital-based Medical oncologists get paid at a reduced professional fee for Evaluation & Management based on a site of service differential

BUT Hospitals OPDs Are BUT Hospitals OPDs Are DifferentDifferent

Structurally Hospital OPDs are well-diversified portfolios of services-

surgery, nuclear medicine, radiation, physical therapy, etc

Hospital OPDs are part of an inpatient facility where revenues may come from the inpatient side

Hospital OPDs are often part of large purchasing organizations which may decrease losses on unpaid drugs and supplies

Hospital OPDs Are Hospital OPDs Are DifferentDifferent

Medicare

Co-payments are a larger piece of the revenue stream and are not just 20%, which is not frequent in Oncology.

Outlier payments for high loss cases

340B price breaks for Disproportionate Share Hospitals

Exemption for cancer hospitals

Hospital OPDs Are Hospital OPDs Are DifferentDifferent

Private Payers Better negotiating leverage based on community

profile and size

Better negotiating leverage based on higher headcount of professional managers

Many payers still pay on charge-based systems with drugs at AWP

Hospitals have not allowed Medicare to become the standard of payment for outpatients..

Medicare Outpatient PPS 2007Medicare Outpatient PPS 2007

Drugs Separately paid drug threshold would rise from

$50 to $55. This does not include anti-emetics.

Separately paid drugs would be paid at ASP plus 6%, not ASP plus 5% as proposed.

Pass through drugs would be paid the rate established by the Competitive Acquisition Program, generally ASP plus 6%

Drug Administration

Second and subsequent hours will be paid. Payments for services by the hour rather than by the visit.

New APCs with new rates.

CPT codes will be used instead of C-codes.

But, hospitals will receive a boost in all APCs with a 3.4% increase in the inflation rate rate for all APCs

Medicare Outpatient PPS 2007Medicare Outpatient PPS 2007

Medicare OPPS 2007Medicare OPPS 2007

Evaluation & Management Codes for Clinic Visits Five levels using CPT codes, not G-codes. Refining these levels.

Imaging will not have second and following procedures reduced.

Future increases tied to Quality Measures reporting starting in 2009.

HOPD Drug Admin 2007HOPD Drug Admin 2007

Source: CMS-1506P 8/8/2006

CPT/ HCPCS Description APC

Relative weight

Payment rate

National unadjuste

d copaymen

t

Minimum unadjuste

d copaymen

t 90760 Hydration iv infusion, init 0440 1.8090 111.20 22.2490761 Hydrate iv infusion, add-on 0437 0.3945 24.25 4.8590765 Ther/proph/diag iv inf, init 0440 1.8090 111.20 22.2490766 Ther/proph/dg iv inf, add-on 0437 0.3945 24.25 4.8590767 Tx/proph/dg addl seq iv inf 0437 0.3945 24.25 4.8590768 Ther/diag concurrent inf90772 Ther/proph/diag inj, sc/im 0437 0.3945 24.25 4.8590773 Ther/proph/diag inj, ia 0438 0.7942 48.82 9.7690774 Ther/proph/diag inj, iv push 0438 0.7942 48.82 9.7690775 Ther/proph/diag inj add-on 0438 0.7942 48.82 9.7690779 Ther/prop/diag inj/inf proc 0436 0.1809 11.12 2.2296401 Chemo, anti-neopl, sq/im 0438 0.7942 48.82 9.7696402 Chemo hormon antineopl sq/im 0438 0.7942 48.82 9.7696405 Chemo intralesional, up to 7 0438 0.7942 48.82 9.7696406 Chemo intralesional over 7 0438 0.7942 48.82 9.7696409 Chemo, iv push, sngl drug 0439 1.5848 97.41 19.4896411 Chemo, iv push, addl drug 0439 1.5848 97.41 19.4896413 Chemo, iv infusion, 1 hr 0441 2.4851 152.75 30.5596415 Chemo, iv infusion, addl hr 0438 0.7942 48.82 9.7696416 Chemo prolong infuse w/pump 0441 2.4851 152.75 30.5596417 Chemo iv infus each addl seq 0438 0.7942 48.82 9.7696440 Chemotherapy, intracavitary 0441 2.4851 152.75 30.5596445 Chemotherapy, intracavitary 0441 2.4851 152.75 30.5596450 Chemotherapy, into CNS 0441 2.4851 152.75 30.5596521 Refill/maint, portable pump 0440 1.8090 111.20 22.2496522 Refill/maint pump/resvr syst 0440 1.8090 111.20 22.2496523 Irrig drug delivery device 0624 0.5145 31.63 12.65 6.33

Coverage with Evidence Coverage with Evidence DevelopmentDevelopment

CMS moving towards more coverage with their CMS moving towards more coverage with their own trials…own trials…

Coverage with Evidence Development (CED) Coverage with Evidence Development (CED) policies:policies: Coverage of drugs, devices, and other technologies Coverage of drugs, devices, and other technologies when provision of the service is accompanied by when provision of the service is accompanied by data reporting or collection that benefits CMS.data reporting or collection that benefits CMS.

Examples include FDG-PET Registry and coverage of Examples include FDG-PET Registry and coverage of colorectal cancer drugs in off-label uses when colorectal cancer drugs in off-label uses when provided as part of an approved clinical trial.provided as part of an approved clinical trial.

CMS states intent to use data to inform permanent CMS states intent to use data to inform permanent coverage decisions in cases where the current coverage decisions in cases where the current trial structure does not provide enough trial structure does not provide enough information about beneficiaries or beneficiary information about beneficiaries or beneficiary access.access.

Off-Label Drug Off-Label Drug CoverageCoverage

By statute, Medicare must cover off-label uses of drugs used in anticancer chemotherapy regimens if the uses are supported by citations in: U.S. Pharmacopoeia – Drug Information (“USPDI”) American Hospital Formulary Service AMA Drug Evaluations (Defunct)

CMS may also change the list of approved compendia as appropriate for identifying medically accepted indications

And, they should!

Off-Label Uses Not in Off-Label Uses Not in the Compendiathe Compendia

The Medicare statute authorizes the carriers to cover off-label uses of cancer drugs that are not in the compendia based on studies in peer-reviewed publications specified by CMS

CMS’s current list of 15 journals has not been updated since legislation was passed in 1993 and it has always looked like a partial list!

Additional Journals Additional Journals Recommended by ASCORecommended by ASCO

Annals of OncologyAnnals of Oncology Biology of Blood Biology of Blood and Marrow and Marrow TransplantationTransplantation

Breast Cancer Breast Cancer Research and Research and TreatmentTreatment

International International Journal of Journal of Radiation Oncology, Radiation Oncology, Biology, PhysicsBiology, Physics

Gynecologic Gynecologic OncologyOncology

Journal of the Journal of the National National Comprehensive Comprehensive Cancer NetworkCancer Network

Journal of Journal of Thoracic OncologyThoracic Oncology

Clinical Cancer Clinical Cancer ResearchResearch

Medicare Coverage of Medicare Coverage of Clinical TrialsClinical Trials

In 2000, CMS issued a National Coverage Decision (NCD) announcing coverage for routine costs of clinical trials. Since then, they have waffled on the coding a few times--except for the -QV.

Investigational devices, items, or drugs are not covered, nor are costs of qualifying for the trial.

In July 2006, CMS announced it will be reconsidering current policy to address issues that have surfaced since implementation, particularly coding and links to Evidence Development.

Medicare Contractor Medicare Contractor ReformReform

Carriers (Part B) and fiscal intermediaries (Part A) will be merged into one entity called Medicare Administrative Contractor (MAC) 15 primary Part A/B MACs 4 specialty MACs (home health and hospice) 4 specialty MACs (durable medical equipment); first bid awarded

to CIGNA; protested by Palmetto.

Primary A/B MACs will serve newly defined geographical regions

Issue of medical directors in each state unresolved

Transition from existing contractor to MAC: 6-13 months Total transition between now and 2010.

Coding Changes 2006-2007Coding Changes 2006-2007

New Hem-Onc Codes New Hem-Onc Codes 10/1/200610/1/2006

Changes/New Codes in Hem-Onc Malignant stromal tumor of the stomach added to

malignant connective tissue tumors (171.5) and benign connective tissue tumors (215.5)

MDS codes (238.7x) Constitutional aplastic anemia (284.0x) Pancytopenias / Myelophthisis /Other (284.x) Anemia of other chronic illnesses (285.29)-Revised Neutropenia (288.0x- new fifth digits) Hemophagocytic syndromes (288.4) Decreased white cell count (288.5x) Elevated white cell count (288.6x) Neutropenic splenomegaly (289.53) Myelofibrosis (289.83)

New Codes 10/1/2006New Codes 10/1/2006

Neoplasm-related pain (338.3)

Mucositis due to anti-neoplastic therapy (528.01)

Abnormal tumor markers (795.8x)

Unspecified adverse effect of drug, medicinal, or biological substance (995.2x)

Colonic polyps (V18.51)

Estrogen receptor status, positive or negative (ER+/-) (V86.0-V86.1)

See your code book for more changes!

8 Codes Per Claim8 Codes Per Claim Medicare to allow up to 8 diagnosis codes per claim-- You may have to

wait until next July but Medicare will permit you to report up to eight diagnosis codes on a single claim. Expanding the number of ICD-9-CM codes available on the CMS-1500 form was mandated by HIPAA.

CMS plans to update Medicare claims processing systems in three phases so all carriers are ready to accommodate this change by July 2007.

The only exception to the current policy is for clinical lab services. Clinical lab claims with more than four ICD-9 codes are manually reviewed, but "this process has not always worked effectively," CMS says in Transmittal 1095, an update to the Medicare Claims Processing Manual.

This is very good news for Medical Oncology and profiling our performance by patient.

CPT 2007CPT 2007

Changes to consultation codes To reflect 2006 changes Clarification (?) of who can request a consult.

New codes for warfarin management (we’ll get into that) Ventilator Assist and Management 94002-94005 Medical Genetics Counseling by a genetics counselor, each 30

minutes = 96040 Additional hours of hydration, therapeutic, chemotherapy

infusions no longer have the eight hour time limit

Warfarin ManagementWarfarin Management 99363--Anticoagulant Management for an outpatient

taking warfarin, physician review and interpretation of INR testing, patient instructions, dosage adjustment, and ordering of additional tests; first 90 days of therapy, minimum of 8 INRs.

99364-- Each additional 90 days of therapy, minimum 3 INRs.

“B” status by Medicare--hard edit and will not be paid.

Warfarin ManagementWarfarin Management May be any outpatient setting--but not inpatient. May not be used for periods less than 60 days (CPT)

for the subsequent code. Use 99211, if less than 60 days.

May only be used with E&M, IF the E&M does not include anything having to do with warfarin therapy. Use -25 on the E&M if this is the case.

If started in the hospital, the subsequent code must be used as the initiation of therapy did not start as an outpatient.

HCPCS Highlights (Many HCPCS Highlights (Many More Drug Changes)More Drug Changes)

A9568 New code for TC-99M arcitumomab; A9549 deleted. G0377 Administration of Part D Vaccine in Your Office

($19.33) J0394 Apomorphine Hcl J1562 Immune globulin 100 mg sc J0894 Decitabine 1 mg J8650 Nabilone oral, 1 mg J9261 Nelarbine 50 mg injection

Review of Concurrent Review of Concurrent InfusionsInfusions

Non-chemo infusions In one bag

Under or equal to 15 minutes Over 15 minutes

Piggy-back

Chemo infusions In one bag??? Piggy-back

ConsultationsConsultations Transmittal 788, CR #4215Transmittal 788, CR #4215

No shared visits for consultations in either office or hospital. Either the No shared visits for consultations in either office or hospital. Either the NPP or MD should charge for the consult. This is an area of dispute.NPP or MD should charge for the consult. This is an area of dispute.

3 R’s have been more formalized and one has been added…3 R’s have been more formalized and one has been added… REQUEST from another physician must be clearly documented in REQUEST from another physician must be clearly documented in

BOTH the receiving and referring physician charts. Referring MDs BOTH the receiving and referring physician charts. Referring MDs must have it in their plan of care, but there is no need for you to must have it in their plan of care, but there is no need for you to check every record.check every record.

The REASON for the consult must be clearly documented.The REASON for the consult must be clearly documented. Opinion RENDERED by the consultant.Opinion RENDERED by the consultant. REPORT goes back to the referring physician.REPORT goes back to the referring physician.

99211 may not be used for a consult.99211 may not be used for a consult. Only ONE consultation may be billed per inpatient stay.Only ONE consultation may be billed per inpatient stay. No shared or split visits.No shared or split visits.

ConsultationsConsultations

Consultations (Cont’d)Consultations (Cont’d) Consultations may be billed based on Consultations may be billed based on time for counseling/coordination of time for counseling/coordination of care, but an opinion must be rendered.care, but an opinion must be rendered.

If care for a diagnosis is transferred If care for a diagnosis is transferred prior to the encounter, the encounter prior to the encounter, the encounter is not a consult. This is a highly-is not a consult. This is a highly-debated issue.debated issue.

Also, if care is continuous before the Also, if care is continuous before the consult for the same/original problem, consult for the same/original problem, an additional consult may not be an additional consult may not be billed.billed.

E/M Medical Necessity (Trailblazer)

1. The guiding principle of Medicare is whether an item or service was “medically necessary”. For E&M, this means

Frequency of service/ intensity of service. Separate from whether criteria was met, does the

H&P meet the patient’s actual needs at the time of service?

E/M Medical Necessity (Trailblazer)

2. Information used by Medicare is contained within the medical record documentation of the history, physical, and medical decision-making. Medical necessity is based on these attributes:

Number, acuity, and severity of problems addressed in the E&M criteria. The context of the service in terms of other services previously rendered

for the same problem. Complexity of documented co-morbidities that influence physician work. Physical scope encompassed by the problems, i.e. number of physical

systems affected by the problem.

E/M Medical Necessity Tips (Trailblazer)

Identify presenting complaints and/or reasons for the visit. Demonstrate the history, physical and MDM associated with

each. Demonstrate how physician work was affected by co-

morbidities or chronic problems noted. Ensure that the nature of the presenting problem is consistent

with the level billed (99213 = low to moderate severity). Become familiar with the clinical examples in CPT Appendix C.

Empire Medicare: Empire Medicare: WastageWastage

Recent reviews by Medicare contractors indicate that providers are not adequately documenting, in their medical records, the provision Recent reviews by Medicare contractors indicate that providers are not adequately documenting, in their medical records, the provision and administration of drugs in the office setting. Empire Medicare Services expects that providers adhere to the following guidelines:and administration of drugs in the office setting. Empire Medicare Services expects that providers adhere to the following guidelines:

Physicians and non-physician providers should enter the drug ordered in their plan of care for the encounterPhysicians and non-physician providers should enter the drug ordered in their plan of care for the encounter The dose and route should be included along with the name of the drugThe dose and route should be included along with the name of the drug The encounter should be dated and signed in the medical record (or electronically if using EMR).The encounter should be dated and signed in the medical record (or electronically if using EMR). The person actually administering the drug should enter into the record that he/she administered the drug, include the dose, route, The person actually administering the drug should enter into the record that he/she administered the drug, include the dose, route,

and site of administration, and sign/date that entryand site of administration, and sign/date that entry It is recommended that providers include the drug lot number when documenting the administration of the drug.It is recommended that providers include the drug lot number when documenting the administration of the drug. If the drug was administered by the ordering provider, it would be sufficient for that person to enter If the drug was administered by the ordering provider, it would be sufficient for that person to enter ggiveniven next to the order in the next to the order in the

plan of care (and also include the site of administration and lot number).plan of care (and also include the site of administration and lot number). A provider may indicate that the drug will be administered over a number of dates in the future, in a single plan of care. However, A provider may indicate that the drug will be administered over a number of dates in the future, in a single plan of care. However,

each subsequent administration of the drug must be separately documented as noted above.each subsequent administration of the drug must be separately documented as noted above. Signatures should be legible (you may want to print your name under the signature, if necessary).Signatures should be legible (you may want to print your name under the signature, if necessary). If the full amount of a single-use vial is not administered, the provider or staff administering the drug should enter a note in the If the full amount of a single-use vial is not administered, the provider or staff administering the drug should enter a note in the

patient’patient’ss medical record indicating the amount not administered (discarded) as wastage.These guidelines are intended to medical record indicating the amount not administered (discarded) as wastage.These guidelines are intended to document the provision and administration of drugs that are covered under the Medicare document the provision and administration of drugs that are covered under the Medicare iincident to benefit (the drug is ncident to benefit (the drug is administered by the physician/non-physician provider or staff in the office). Use of these documentation guidelines will not extend administered by the physician/non-physician provider or staff in the office). Use of these documentation guidelines will not extend Medicare coverage to any drug not otherwise covered (e.g., drugs that are usually self-administered, drugs that are not Food and Medicare coverage to any drug not otherwise covered (e.g., drugs that are usually self-administered, drugs that are not Food and Drug Administration (FDA) approved, drugs provided for indications that are not considered medically necessary, etc.). Drugs Drug Administration (FDA) approved, drugs provided for indications that are not considered medically necessary, etc.). Drugs provided in the physician office may not be billed to Medicare unless they are also administered by or incident to the same provided in the physician office may not be billed to Medicare unless they are also administered by or incident to the same physician/group.physician/group.

Furthermore, providers should not bill Medicare for visits (Evaluation & Management (E&M) services) when the purpose of the Furthermore, providers should not bill Medicare for visits (Evaluation & Management (E&M) services) when the purpose of the encounter was for the administration of the drug.encounter was for the administration of the drug.

Providers should retain drug invoice records to document the purchase of the drug, if requested by a Medicare contractor.Providers should retain drug invoice records to document the purchase of the drug, if requested by a Medicare contractor. PPosted: 10/24/2006osted: 10/24/2006

Best PracticesBest Practices Negotiate private contracts with an iron fist--the train has left the station Negotiate private contracts with an iron fist--the train has left the station

for Medicare..for Medicare.. Understand your RBRVS and how the payer is using it.Understand your RBRVS and how the payer is using it. Know whether EVERY payer is paying you correctly---electronically compare Know whether EVERY payer is paying you correctly---electronically compare

your paid rates to contracted rates using an EOB analyzer.your paid rates to contracted rates using an EOB analyzer. Figure out their bundling rules and whether or not they meet coding standards.Figure out their bundling rules and whether or not they meet coding standards. Understand the ASP/ AWP relationship for each payer.Understand the ASP/ AWP relationship for each payer. Ascertain the balance billing terms for each patient’s plan.Ascertain the balance billing terms for each patient’s plan. Never give up asking for a facility fee to make up for unpaid costs in RBRVS, Never give up asking for a facility fee to make up for unpaid costs in RBRVS,

if you are paid at an equivalent rate to Medicare.if you are paid at an equivalent rate to Medicare. Have a lawyer review every contract.Have a lawyer review every contract. Do not give up the idea of being out-of-network for small, but odious contracts.Do not give up the idea of being out-of-network for small, but odious contracts.

Successful Best PracticesSuccessful Best Practices Collections! Collections! Collections! Cash! Cash! Cash!Collections! Collections! Collections! Cash! Cash! Cash! Do not give up money for denied claims--appeal and Do not give up money for denied claims--appeal and

learn from the experience.learn from the experience. Audit chemo prospectively; peer review E&M.Audit chemo prospectively; peer review E&M. Prepare for chaos around the NPI. Make sure you have Prepare for chaos around the NPI. Make sure you have

everything settled in your practice 60 days before the everything settled in your practice 60 days before the deadline (5/23/07).deadline (5/23/07).

Use the highest quality care guidelines and detailed ICD-Use the highest quality care guidelines and detailed ICD-9 coding in the future--you will be rewarded for it down 9 coding in the future--you will be rewarded for it down the road.the road.

Automate everything you can that will help with Automate everything you can that will help with understanding your data and benchmarking.understanding your data and benchmarking.

Get together with local hospital outpatient clinics and Get together with local hospital outpatient clinics and figure out ways as a group to take care of patients.figure out ways as a group to take care of patients.

Participate in the struggle!Participate in the struggle!

Use Our Web Site Use Our Web Site Often!Often!

Go to Go to http://www.p4pbis.comhttp://www.p4pbis.com