Updated on: October 20, 2016

CMS Continues to Restructure Imaging APCs

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Original story posted on: October 10, 2016
Hospitals paid under the Outpatient Prospective Payment System (OPPS) could receive a rate increase of 1.6 percent starting on Jan. 1, 2017, according to the proposed rules issued by the Centers for Medicare & Medicaid Services (CMS) on July 6, 2016.

All integral, ancillary, supportive, dependent, or adjunctive services will continue to be packaged into the primary services. However, for 2017, CMS proposed to “align the ... logic” for all conditional packaging status indicators so that packaging will occur at the claim level (instead of being based on the date of service). This, the agency reported in the proposed rule, would “promote consistency and ensure that items and services that are provided during a hospital stay that may span more than one day are packaged according to OPPS policies.”

In addition to the radiology-specific policies addressed below, CMS made several other changes, including the “site-neutral payment provisions” required by Congress in the Balanced Budget Act (BBA) of 2015.

According to the BBA, off-campus, provider-based departments (PBDs) that began billing under the OPPS on or after Nov. 2, 2015 would no longer be paid for most services under that methodology. To implement this provision, CMS proposes to use a transitional policy for one year, beginning on Jan. 1, 2017. For most services provided, it will reimburse via the Medicare Physician Fee Schedule (MPFS), and physicians’ professional claims would be paid at the non-facility rate for services that they are permitted to bill.

This policy would affect the technical component of radiological procedures performed in hospital-owned doctor’s offices. It probably won’t affect hospital “radiology departments” unless the hospital includes the physicians’ offices in “radiology department” cost centers.

Comprehensive APCs

In the proposed rule, CMS defines a comprehensive ambulatory payment category (C–APC) as “a classification for the provision of a primary service or specific combination of services and all adjunctive services and supplies provided to support the delivery of the primary or specific combination of services.” Others define it in the context of episodes of care.

There are currently 37 C-APCs, and most include procedures for the implantation of costly medical devices. For 2017, CMS proposes to add 25 new ones, which will bring the total to 62.

Modifier for X-ray Films

As mandated by the Consolidated Appropriations Act of 2016, a 20-percent payment reduction will be made for x-rays taken using film (including the x-ray component of a packaged service). This cut provides an incentive to hospitals using outdated x-ray equipment to make the transition over to digital technology.

CMS has proposed that hospitals that continue to bill Medicare for film-based x-ray services by assigning a modifier to such claims. It also notes that the legislation requires future payment reductions for images taken with computed radiography (CR).

Multiple Imaging Composite APCs

As stated in the proposed rule, the goal of composite APCs is “to reflect and promote the efficiencies hospitals can achieve when performing multiple imaging procedures during a single session.”

Medicare makes a single payment each time a hospital submits a claim for more than one imaging procedure within one of the following imaging types on the same date of service:

  • Ultrasound
  • Computed tomography (CT) and CT angiography (CTA)
  • Magnetic resonance imaging (MRI) and magnetic resonance angiography (MRA).
When it established this policy in 2009, CMS sorted the above imaging services into the five multiple imaging composite APCs listed below.

  • APC 8004          Ultrasound Composite
  • APC 8005                   CT and CTA without Contrast Composite
  • APC 8006                   CT and CTA with Contrast Composite
  • APC 8007                   MRI and MRA without Contrast Composite
  • APC 8008                   MRI and MRA with Contrast Composite
CMS defines a single imaging session for the “with contrast” composite APCs as having one or more imaging procedures from the same family performed with contrast on the same date of service (DOS). For example, if the hospital performs an MRI without contrast during the same session as at least one other MRI with contrast, the hospital will receive payment based on the payment rate for APC 8008, the “with contrast” composite APC.

For 2017 and subsequent years, CMS proposes to continue to pay for all multiple imaging procedures within an imaging family performed on the same DOS using the multiple imaging composite APC payment methodology.

Radiology-Specific APCs

In last year’s OPPS final rule, CMS restructured the APCs that include imaging services to improve their clinical and resource homogeneity. To further fine-tune the APCs, and at the request of some hospital imaging stakeholders, CMS made further structural changes for 2017, including removing interventional radiology imaging studies and nuclear medicine from the diagnostic APC structure and maintaining them in their own separate APCs.

Last year, the list consisted of 17 APCs, but for 2017, CMS proposes to consolidate to the eight shown below. (The specific APC assignments for each service grouping are listed in Addendum B to the proposed rule.)

Proposed 2017 APC

Proposed 2017 APC Group Title

5521

Level 1 Diagnostic Radiology without Contrast

5522

Level 2 Diagnostic Radiology without Contrast

5523

Level 3 Diagnostic Radiology without Contrast

5524

Level 4 Diagnostic Radiology without Contrast

5525

Level 5 Diagnostic Radiology without Contrast

5571

Level 1 Diagnostic Radiology with Contrast

5572

Level 2 Diagnostic Radiology with Contrast

5573

Level 3 Diagnostic Radiology with Contrast

Since nuclear medicine had a major APC overhaul last year, it is not included in these radiology APCs.  However, it is being proposed that several individual nuclear medicine codes move from one APC to another. One of these is code 78227, which CMS proposes to move from APC 5591 to 5592. This would mean increased payment for this code.

Pass-Through Status

By law, CMS must provide temporary additional payments or “transitional pass-through payments” for certain drugs, including current:

  • Orphan drugs;
  • Drugs, biologicals, and brachytherapy sources used in cancer therapy; and
  • Radiopharmaceutical drugs and biologicals.
Transitional pass-through payments can be made for a period of at least two years, but not more than three years. However, for 2017 and beyond, CMS has proposed that the transitional pass-through payment period be changed to three years and that pass-through status expires on a quarterly basis, rather than annually, as is the case now. This proposed change, made by CMS in the proposed rule, would eliminate the variability of the pass-through payment eligibility period, which currently varies based on the timing of the particular application.

Pass-through payment status will continue in 2017 for 38 drugs and biologicals, including Bracco’s Lumason and several radiopharmaceuticals, which are listed below. (The others with pass-through status can be found in Table 14 of the OPPS proposed rule.)

  • Q9950      Injection, sulfur hexafluoride lipid microsphere, per ml G 9457
  • A9586       Florbetapir f18, diagnostic, per study dose, up to 10 millicuries
  • C9461       Choline C 11, diagnostic, per study dose
  • Q9982      Flutemetamol F18, diagnostic, per study dose, up to 5 millicuries
  • Q9983      Florbetaben F18, diagnostic, per study dose, up to 8.1 millicuries
Diagnostic or therapeutic radiopharmaceuticals that receive pass-through payment status during 2017 will receive ASP plus 6 percent. If ASP data are not available for a radiopharmaceutical, CMS proposes to provide pass-through payment at the wholesale acquisition cost (WAC) plus 6 percent. If WAC information also is not available, payment for the pass-through radiopharmaceutical is proposed at 95 percent of the most recent average wholesale price (AWP).

Pass-through status will expire on Dec. 31, 2016 for 15 drugs and biologicals, but no radiopharmaceuticals.

CMS proposes to continue to update pass-through payment rates on a quarterly basis.

Packaging Threshold

For therapeutic radiopharmaceuticals, CMS proposes to raise the packaging threshold from the $100 used in 2016 to $110 for 2017. This means that CMS would package drugs with a per-day cost less than or equal to $110 and identify those with a per-day cost greater than $110 and pay separately.

All non-pass-through, separately payable therapeutic radiopharmaceuticals would be paid at ASP plus 6 percent. 


Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.
Janis Oppelt

Janis keeps the wheel of words rolling for Panacea®'s publishing division. Her roles include researching, writing, and editing newsletters, special reports, and articles for RACMonitor.com and ICD10Monitor.com; coordinating the compliance question of the week; and contributing to the annual book-update process. She has 20 years of experience in topics related to Medicare regulations and compliance.

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