Oncology & Hematology Coding Alert

CRC screening policy shift could spell good news.

On July 7, 2022, the Centers for Medicare & Medicaid Services (CMS) issued its calendar year (CY) 2023 Medicare Physician Fee Schedule (MPFS) proposed rule, continuing its pandemic-inspired focus on health equity and access to safe, affordable healthcare for all. The fee schedule stands at 2,066 pages with suggested policy changes surrounding critical issues like mental health, telehealth, and chronic pain management.

CMS’s proposals point to possible financial hardship for hematology/oncology specialty practices in 2023; however, the Community Oncology Alliance (COA) and American Medical Association (AMA) have already promised they will lobby against the proposed rule in the hope Congress will not fully adopt the MPFS as it is currently proposed.

Here’s what you need to know about these potential changes, along with one other policy change providing us a sliver of hope in the hematology/oncology world.

Know What the Proposed CF Reduction Is and Why it Matters

For CY 2023, CMS is proposing to cut the conversion factor (CF) by $1.53, reducing the rate from $34.61 to $33.08, the MPFS proposed rule suggests. This lowered CF is due to “budget neutrality adjustments, as required by law to ensure payment rates for individual services don’t result in changes to estimated Medicare spending, the required statutory update to the conversion factor for CY 2023 of 0%, and the expiration of the 3% increase in PFS payments for CY 2022,” CMS explains in a fact sheet on the proposals (www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2023-medicare-physician-fee-schedule-proposed-rule).

When Medicare lowers the CF, payments for some services are lowered accordingly. That’s because the CF is the final multiplier in the resource-based relative value scale (RBRVS), the complex formula CMS uses to establish payment for services. CMS uses relative value units (RVUs) for services based on the work, practice expense (PE), and malpractice insurance (MP) involved. They are then “adjusted by geographic practice cost indices (GPCI) to reflect the variations in the costs of furnishing the services” per the proposed rule. Then everything is multiplied by the CF to produce a dollar value using the following formula:

Payment = [(RVU work × GPCI work) + (RVU PE × GPCI PE) + (RVU MP × GPCI MP)]× conversion factor (CF)

So, it follows that a reduction in the CF would generally result in many services, across all specialties, being paid less starting next year.

Know That Oncology PE May Also Be Reduced

Oncology and hematology practices potentially face a double whammy with a -1 percent reduction on the total PE allowed charges. In all, “CMS estimates a negative 1% overall impact for the hematology/oncology specialty and a negative 1% overall impact for the radiation oncology specialty in 2023. However, this estimate does not factor in the 3% reduction in the conversion factor. The actual impact on individual clinicians, however, will vary based on geographic location and the mix of Medicare services billed,” according to the American Society of Clinical Oncology (ASCO) (www.asco.org/news-initiatives/policy-news-analysis/more-4-conversion-factor-decrease-2023-medicare-physician).

Clinicians in community oncology practices may well be some of those who will be negatively affected by the MPFS proposed rule. “This is a major cut for us. Along with these cuts to the conversion factor and sequester, the Prescription Drug Pricing Reduction Act will affect drug prices in such a way that community oncology practices will face significant financial risk. As it is currently drafted, practices will be reimbursed at much lower negotiated rates relative to the underlying costs of drugs,” says Stephanie A. Thebarge, CPC, CPCO, CPMA, CPPM, CPB, CEMC, CHONC, compliance manager at New England Cancer Specialists in Scarborough, Maine.

“How can a community oncology practice stay afloat when they can’t cover their overhead to treat the patient in their practice? It just doesn’t make sense, but I’m hoping CMS will listen to the comments presented by COA and other community oncology practices before they finalize the proposed rule,” Thebarge adds.

Know What the AMA Plans to Do

Other healthcare lobbyists, including the AMA, are already advocating for legislators to get involved.

“The rule not only fails to account for inflation in practice costs and COVID-related challenges to practice sustainability, but also includes a significant and damaging across-the-board reduction in payment rates,” cautions Jack Resnek, Jr., MD, AMA president, in a release on the proposed rule. “Such a move would create long-term financial instability in the Medicare physician payment system and threaten patient access to Medicare-participating physicians. We will be working with Congress to prevent this harmful outcome,” Resnek adds (Source: www.ama-assn.org/press-center/ press-releases/ama-medicare-payment-schedule-rule-threatens-patient-access).