Oncology & Hematology Coding Alert

Hospital-based radiation oncologists dont have the same luxury of time their medical oncology counterparts have. Radiation oncology procedures were grouped into 13 ambulatory payment classifications (APC), 12 of which are assigned a payment rate. Oncology-related drugs used in the outpatient treatment of cancer patients have been given a two- to three-year exception to the Health Care Financing Administrations (HCFA) APC until HCFA can figure out a way to incorporate them into its newest payment system. But hospital-based radiation oncology procedures will be paid using APCs beginning this summer.

Rather than be subject to APC payment, all current drugs being used in cancer therapy, including supportive drugs, will be paid based on 95 percent of the average wholesale price for a two- to three-year period. After the transitional period, HCFA will propose a permanent payment method, says Laurie Lamar, RHIA, CCS, CTR, CCS-P, reimbursement specialist with the American Society of Clinical Oncology (ASCO) in Alexandria, Va.

Although HCFA has retained the basic structure for prospective payment for hospital-outpatient reimbursement, its final rules were published in the April 7 Federal Register, and implementation begins July 1 hospital-based oncology practices were spared potentially steep reductions in reimbursement for chemotherapy drugs and some cancer treatments.

While hospital-based radiation oncologists will be affected immediately, radiation oncologists in private practice will feel some effect as well, says Cindy Parman, CPC, CPC-H, principal of Coding Strategies, a coding consulting firm in Dallas, Ga. Theyre now going to be under the gun from hospitals, Parman says. Hospitals are going to tighten their belts and make physicians more accountable.

Under the original proposal, chemotherapy drugs would have been grouped into four APCs and Medicare would not have made a separate payment for other types of drugs, including supportive drugs, such as the anti-emetic Anzamet, J1260.

HCFA still adheres to the general principle that drugs should be paid as part of the APC payment for the procedure and should not be subject to a separate payment; the Balanced Budget Refinement Act (BBRA) allows three categories of drugs not to be subject to this approach. A large category of cancer therapy and orphan drugs that are paid on a 95 percent of the average wholesale price was created for a two- or three-year transitional period. A similar system for drugs introduced after July 1 was created, and high-cost drugs that are not covered by the BBRA will be paid separately.

The Balanced Budget Act of 1997 requires HCFA to establish a prospective payment system for hospital-outpatient department services. The law requires HCFA to establish a classification system for outpatient department services. It allows HCFA to group various services within a payment group if the services are comparable clinically and require [...]