More than 45 bipartisan members of the U.S. House of Representatives sent a letter urging the Secretary of Health and Human Services (HHS) and Administrator of the Centers for Medicare and Medicaid Services (CMS) to avoid implementing any reimbursement cuts for low-dose CT (LDCT) lung cancer screens provided in hospital outpatient departments. Anchored by Representatives Jim Renacci (R-OH), Larry Bucshon, MD (R-IN), Bill Pascrell (D-NJ) and John Larson (D-CT), 26 of the Members of Congress who ultimately cosigned this letter directly oversee Medicare by serving on either the Ways and Means or Energy and Commerce Committees.

The Calendar Year 2017 Hospital Outpatient Prospective Payment System (HOPPS) final rule reduced Medicare reimbursement rates for the LDCT lung cancer screen G codes (G0297) by approximately 47 percent in comparison to 2016 rates. G codes are typically used by CMS to reimburse procedures that currently do not have a Current Procedural Terminology (CPT) code or to track the studies for their own internal purposes.

The recent steep reimbursement reductions to LDCTs are a microcosm of the unintended consequences of CMS consolidating Ambulatory Payment Classifications (APCs) in order to control overarching spending in the HOPPS. 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 service. Since it’s a fixed level of reimbursement to the hospital, the facility accepts any potential financial profit or loss from each APC payment. As a result, alignment of services within proper APCs is essential to a hospital receiving ample reimbursement for care provided to patients.

Prior to the 2017 HOPPS rule, G0297 was classified as a Level 2 APC (APC 5570; Level 2 Imaging without Contrast) and, therefore, received a corresponding payment rate of $112.49. For comparison purposes, services grouped within a Level 1 APC typically have a geometric mean cost of $63. Although Level 2 APC reimbursement rates do not accurately represent the time and effort associated with using structured reporting and contributing patient information into a data registry, the American College of Radiology (ACR) supported the initial APC group assignment for LDCTs because the payment level closely mirrored HOPPS reimbursement for a diagnostic Chest CT without Contrast (HCPCS/CPT Code 71250), specifically $112.69.

Yet, continuous pressure on Medicare to control spending within the outpatient department ultimately prompted CMS to use the CY 2017 HOPPS rulemaking cycle to consolidate 17 total APCs down to 7, a decision that subsequently reshuffled many services into different APC levels and, in turn, led to dramatic reimbursement reductions for a variety of key services. With respect to LDCTs, the unintended consequences associated with massive APC consolidation were compounded by CMS’ flawed analysis of insufficient 2015 LDCT claims data. In the end, effective January 1, 2017, G0297 was reassigned to a Level 1 APC, specifically APC 5521 (Level 1 Imaging without Contrast), and a new corresponding payment rate of $59.84.

In light of the dramatic reimbursement reductions imposed on this screening service, the underlying goal of this Congressional letter is to preempt any potential effort by CMS to lower reimbursement for LDCTs in the CY 2018 HOPPS rule. Since CMS has not yet published this latest outpatient payment rule, there are no definitive cuts scheduled for 2018. The CY 2018 HOPPS Proposed Rule, however, is expected to be released to the public sometime in late June or early July 2017 followed by the Final Rule in late November. Changes announced in the final rule will take effect in 2018.

The ACR is hopeful that this bipartisan letter will encourage CMS not to pursue any further consolidation of HOPPS APCs for fear that it will negatively impact patient access to annual LDCTs. The College applauds Representatives Renacci, Bucshon, Pascrell and Larson for their leadership on this important screening procedure. ACR members are encouraged to monitor Advocacy-in-Action e-News for the latest developments surrounding reimbursement changes to LDCT lung cancer screens in the CY 2018 HOPPS rule.