By Adrienne Dresevic, Esq., and Leslie A. Rojas, Esq., of The Health Law Partners, P.C.
On July 1, 2015, CMS released the Hospital Outpatient Prospective Payment System (HOPPS) and Ambulatory Surgical Center (ASC) Payment System Proposed Rule for calendar year 2016. After considering all changes in the Proposed Rule, CMS estimates that hospitals will see a 0.2 percent decrease in HOPPS payments in 2016. The Proposed Rule includes a number of provisions affecting imaging providers, a few of which are outlined below.
Cost-allocation methodology for CT and MRI cost-to-charge ratios:
For many hospital departments, including imaging departments, preparing the annual Medicare cost report is a large task. However, for facilities, filing a cost report is a requirement to participate in Medicare. Hospital imaging departments should ensure its cost reports accurately reflect the true costs of its imaging services. CMS uses the ancillary and departmental cost-to-charge ratios to convert charges to estimated costs. In the past, many imaging departments calculated cost-to-charge ratios using “square-feet” calculations, which typically result in higher costs allocated to inpatient services. However, beginning in 2014, CMS started removing claims from providers using a “square feet” calculation method when determining cost-to-charge ratios for CTs and MRIs. In the Proposed Rule, CMS continues to transition away from the “square feet” allocation methodology for CTs and MRIs. CMS estimates that this continued policy shift will decrease the cost-to-charge ratios for CTs and MRIs, and will significantly decrease HOPPS payment rates.
Reduced payment for non-NEMA compliant CT scans:
Effective for services furnished on or after January 1, 2016, CMS proposes that imaging providers receive reduced payment for the technical component of certain CT services if the equipment used does not meet the National Electrical Manufacturers Association (NEMA) Standard XR-29-2013 (Standard Attributes on CT Equipment Related to Dose Optimization and Management). The change would include a 5% reduction in 2016 and a 15% reduction in 2017. The affected CT services include HCPCS codes: 70450 through 70498; 71250 through 71275; 72125 through 72133; 72191 through 72194; 73200 through 73206; 73700 through 73706; 74150 through 74178; 74261 through 74263; and 75571 through 75574 (as well as any succeeding codes). To effectively implement this provision, CMS is requiring the establishment of a new modifier, which would reflect that the CT services were furnished on non-NEMA compliant equipment. The new modifier would alert CMS that the reduced payment rate should be used for such services.
New HCPCS code for CT lung screening:
Imaging providers should also be aware that CMS proposes the establishment of a new HCPCS code for low dose CT scans for lung cancer screening, which will be covered by Medicare. The new HCPCS codes will correspond to ambulatory payment classification (APC) 5570 (computed tomography without contrast) with a payment rate of $118.15 for the technical component in the hospital outpatient setting in 2016 (for CTs without contrast in 2015, the APC is 0032 at a payment rate of $120.02).
Removal of certain codes from the list of ASC covered ancillary services:
Covered items and services that are integral to covered surgical procedures receive separate payment under the ASC Payment System. According to CMS, since radiation treatment using Co-60 stereotactic radiosurgery (SRS) is only provided in hospital outpatient departments or freestanding radiation centers (not in ASCs), CMS proposed to exclude SRS codes from the list of ASC covered ancillary services.
Removal of quality reporting measure for brain CT for atraumatic headache:
CMS proposes a number of changes to the Hospital Outpatient Quality Reporting Program, including changes to program timeframes and deadlines, as well as adding and deleting certain measures. One change of particular interest to the imaging community is the removal of quality reporting measure OP-15 for the “Use of Brain Computed Tomography (CT) in the Emergency Department for Atraumatic Headache.” According to CMS, this measure “does not align with the most updated clinical guidelines or practice.” In particular, CMS references literature that suggests “headache guidelines have either excluded older adults or recommended a lower threshold for the use of CT scans.” Additionally, CMS states that “stakeholders have expressed concern that this measure is influenced significantly by case mix, patient severity, and clinical behavior, and thus, fails to represent appropriateness or efficiency accurately.” This change is effective for payment determinations in CY 2017.
Information on the other provisions included in the Proposed Rule may be accessed here and the accompanying CMS fact sheet may be accessed here. CMS is accepting public comments on the Proposed Rule through August 31, 2015, with a final rule to be published on or around November 1, 2015.
Adrienne Dresevic, Esq. graduated Magna Cum Laude from Wayne State University Law School. Practicing healthcare law, she concentrates in Stark and fraud/abuse, representing various diagnostic imaging providers, e.g., IDTFs, mobile leasing entities, and radiology and multi-specialty group practices.
Leslie Rojas, Esq. graduated from Wayne State University Law School and is licensed to practice law in Michigan and Illinois. Practicing healthcare law, she concentrates on fraud/abuse issues, compliance with federal and state healthcare regulations, health information privacy and technology issues, and transactional and corporate aspects of healthcare.
The authors are members of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or (212) 734-0128, or at www.thehlp.com.
For more regulatory news, visit www.ahraonline.org/news.