ACR, ASTRO and ACRO agree that relying on legacy HOPPS cost distributions will irreparably harm freestanding radiation centers.
FROM THE CHAIR OF THE COMMISSION ON ECONOMICS
Lauren P. Nicola, MD, FACR
By Laeton J. Pang, MD, MPH, FACR, Paul E. Wallner, DO, FACR, David C. Beyer, MD, FACR, and Catherine M. Yashar, MD, FACR
Guest Columnists
Regardless of site of service, issues related to the new radiation treatment delivery codes for photon therapy have resulted in initial revenue reductions of 10–30% for many radiation centers across the country. These reductions are largely due to slow revision of fee schedule updates by commercial payers and state Medicaid programs and lower than anticipated valuation of the most complex treatment code, 77412.
Professional societies, including the ACR, the American Society for Radiation Oncology (ASTRO) and the American College of Radiation Oncology (ACRO), have expressed concerns about patient access and maintenance of quality of care, given that many centers already operate on slim margins — particularly in rural areas of the country — and are at increased risk of closure. Ironically, overall spending on radiation therapy is inflated because of practice consolidation and the fact that payers reimburse facilities (hospitals and hospital-owned) at higher rates than non-facilities.
More than two decades of serial reductions in reimbursement to the office-based facilities in the Medicare Physician Fee Schedule (PFS), combined with decreases in technical revenues from hypofractionation and increased practice expenses (including equipment, maintenance and personnel salaries), which are aggravated by a nationwide staffing workforce shortage, are taking a toll. A 2026 study in the International Journal of Radiation Oncology, Biology, Physics highlighted significant access to care concerns relating to radiation therapy, particularly in the freestanding setting and in rural areas.
Key findings include:
In the CY 2026 PFS Final Rule, CMS finalized its proposal to utilize the relationship among Hospital Outpatient Prospective Payment System (HOPPS) Ambulatory Payment Classifications (APCs) 5621, 5622 and 5623 to inform the PFS valuation of Practice Expense (PE) in the technical-only delivery codes 77402 (Level 1), 77407 (Level 2) and 77412 (Level 3). Because the new radiotherapy treatment delivery codes modified definitions of previously used old delivery codes (77402, 77407 and 77412), there has been significant confusion regarding the new code set,. Unfortunately, this confusion has persisted into rate-setting for 2027.
To provide CMS with actionable, consensus-driven solutions, ACR strongly urged the agency to adopt these specialty-developed recalibration remedies.
In detailing its rationale in the 2026 HOPPS and PFS Final Rules, CMS performed a best-effort crosswalk of the old code set to the new code set. The methods used by CMS to determine payments are complex and largely opaque. As a result, ACRO and ASTRO independently contracted with consultant firms to request information from CMS and perform a data analysis. These efforts were complicated by the short turnaround time (roughly two months) for the allowed comment period. Both reviews indicated that the ratios used in the preliminary assumption by CMS do not reflect actual clinical practice and require recalibration for 2027 rate-setting based on empirical data and clinical dynamics.
ASTRO’s principal recommendation is that CMS assign CPT® code 77407 to APC 5623, Level 3 Radiation Therapy. Because the current ambulatory payment classifications (APC) assignment does not adequately reflect the complexity and resource use of the services now described by CPT code 77407, ASTRO proposed this modification in its CY 2026 and CY 2027 HOPPS comments.
Based on methodological concerns about how CMS cross walked volume analyses into the new code set, ACRO has suggested a different methodology. In their recommendations, ACRO has urged CMS to calibrate the technical component Practice Expense RVUs for CPT codes 77402, 77407 and 77412 under the CY 2027 PFS Final Rule by directly incorporating corrected HOPPS APC relative cost weights in accordance with current delivery patterns.
The ACR joined colleagues across the radiation oncology community to emphasize that CPT code 77407 requires reimbursement aligned with APC 5623-level resource intensity. To achieve this goal while maintaining clear distinctions across the three delivery tiers, CMS can readily either adopt ACRO’s mathematical recalibration crosswalk or implement the payment remedies advanced by ASTRO. Both approaches address the underlying cost-allocation anomalies inherited from legacy HOPPS claims and preserve rational relativity across the code family.
ACR economics staff and volunteers collaborated closely with our colleagues at ACRO and ASTRO, and all organizations agree that relying on unadjusted, legacy HOPPS cost distributions will irreparably harm freestanding radiation centers. To provide CMS with actionable, consensus-driven solutions, ACR strongly urged the agency to adopt these specialty-developed recalibration remedies across both the HOPPS and PFS rules to ensure final rates establish equitable, stable reimbursement for conventional photon delivery. Finally, CMS should utilize the most complete 2026 claims data available at the time of final rulemaking to support accurate recalibration.
The Same Language
ACR’s PE-RADS™️standardizes how radiologists report pulmonary embolism and bolsters communication with other ordering clinicians.
Read more
Patient- and Family-Centered Care
As radiology evolves, the patient remains the compass guiding us through a changing healthcare landscape towards what comes next.
Read more
Master the Challenges of Gastrointestinal Imaging
The CPI Gastrointestinal Tract Radiology Module 2026 features image-rich, case-based learning that radiologists and trainees at all levels can learn from.
Read more
