November 11, 2016

HOPPS Final Rule Alters Lung Screening Payments

Substantial changes to two important lung cancer screening G codes appear in the 2017 Hospital Outpatient Prospective Payment System (HOPPS) final rule.

The 2017 HOPPS proposed rule attempted to reduce reimbursement rates for the low-dose CT (LDCT) lung cancer screening shared decision making session (G0296) and actual LDCT lung cancer screen (G0297) by 64 percent and 44 percent, respectively, in comparison to 2016 payment rates. The shared decision making code provides reimbursement to ordering physicians for discussing the potential benefits and risks of an LDCT scan and the importance of adhering to the annual screening regiment for a patient at high risk of developing lung cancer.

The reimbursement policies outlined in the final rule are largely mixed despite intense opposition from members of Congress and the Lung Cancer Screening Coalition, convened by the American College of Radiology (ACR). With respect to the shared decision-making visit, the Centers for Medicare & Medicaid Services (CMS) acknowledged after reviewing only 21 single claims that the final geometric mean cost for that particular service is $130.44. Because of the dearth of claims data, CMS ultimately elected to place the shared decision-making G code into Level 2 ambulatory payment classification (APC) 5822 with a corresponding payment rate of $70.23 in the 2017 HOPPS final rule.

APCs are the federal government’s method of paying facilities for Medicare outpatient services. Each APC is composed of services that are similar in clinical intensity, resource utilization and cost. All services which are grouped under a specific APC result in an annually updated Medicare “prospective (or fixed) payment” for that particular APC. Since it’s a fixed level of reimbursement to the hospital, the facility accepts any potential financial profit or loss stemming from each APC payment.

The combination of ACR’s direct advocacy and inquiries from members of Congress pressured CMS to alter the 2017 HOPPS proposed rule that would have reduced reimbursement to $25.08 for code G0296. In 2016, the shared decision-making visit was also placed in APC 5822 but with a slightly higher corresponding payment rate of $69.65. Though representing only a minor increase in comparison to 2016 reimbursement, payment for the shared decision-making visit outlined in the 2017 HOPPS final rule is considerably higher than rates outlined in the 2017 HOPPS proposed rule. In addition, the Agency acknowledged that it took into account clinical similarity when grouping the shared decision-making visit into APC 5822 and indicated that it would review payment rates for G0296 in the 2018 rulemaking cycle.

However, CMS finalized very different payment provisions as they relate to the actual LDCT scan (G0297) and ultimately refused to retain the current 2016 APC payment rate of $112.49. Instead, the Agency placed G0297 into APC 5521, with a corresponding payment rate of $59.84. Unlike the shared decision-making code, CMS did not indicate it will reevaluate reimbursement rates for G0297 in 2018, and it rejected the ACR’s arguments that the actual LDCT scan was no longer grouped into a clinically similar APC.

The ACR continues to analyze the entire 2017 HOPPS final rule, though it appears that reimbursements for the two lung cancer screening G codes are a microcosm of CMS’s overarching effort to consolidate the 17 existing APCs down into seven APCs. Fewer APCs have the indirect impact of subjecting numerous services to price compression or reimbursing relatively more expensive procedures at lower rates while reimbursing less expensive procedures at higher rates without any corresponding regard for clinical similarity.

The ACR will submit formal comments on the CY 2017 HOPPS final rule. Radiologists are encouraged to monitor the Advocacy in Action newsletter for the latest developments surrounding this issue.