Blog Post

Beyond 340B: The 5 other CMS proposals for 2018 that cancer programs need to know

August 17, 2017

    By now, you've likely heard about the significant 340B changes CMS called for in the 2018 HOPPS proposed rule released back in July—but that's not the only proposal that would impact cancer programs' payments. Keep reading for our non-340B-related takeaways on the proposed rule.

    (Need to get up to speed on the 340B proposal? Read the blog post, "6 things 340B and non-340B hospitals need to know about CMS's proposed $900M cut to drug reimbursement.")

    1. Proposed packaging of Level 1 and 2 drug administration services

    CMS is proposing to increase reimbursement slightly for all four drug administration codes in 2018. However, the agency is also proposing to package Level 1 and 2 drug administration services for 2018, which it claims would more closely align payment in hospital outpatient departments and physician offices. The geometric mean costs for APC 5691 (Level 1) and APC 5692 (Level 2) are typically $37 and $59, respectively. Therefore, CMS is proposing that these services be packaged when performed with other billable services. For 2018, CMS would not include Level 1 and 2 add-on codes in the proposed packaging, but the agency is requesting comments on whether these add-on codes should be included in the packaging in future years.

    2018 proposed payment changes for drug administration codes

    2018 proposed payment changes for drug administration codes

    Proposed packaging of chemotherapy Level 1 and 2 drug administration codes

    Proposed packaging of chemotherapy level 1 and 2 drug administration codes

    2. No major changes proposed in radiation reimbursement

    Under the new proposal, Levels 1-3 of radiation therapy would see a slight increase in reimbursement, while Levels 4-7 will decrease slightly. As you may recall, CMS developed a C-APC for sterotactic radiosurgery (SRS) in 2015. However, in 2016, it unbundled SRS therapy and adjunctive services. For 2018, CMS proposes to eliminate the modifier for 10 adjunctive services and continue to reimburse separately for them.

    No major changes in radiation reimbursement

    3. CMS proposes to continue non-enforcement of direct supervision requirement for CAHs and small rural hospitals

    In 2010, CMS clarified that direct supervision is required for outpatient therapeutic services covered and paid for by Medicare. Critical access hospitals (CAHs) and small rural hospitals with fewer than 100 beds were provided a moratorium to establish the necessary infrastructure to meet these requirements which was set to expire in December of 2017. CMS has proposed extending this period of non-enforcement of the direct-supervision rule for these hospitals through CY 2019.

    4. Majority of PPS-exempt hospitals will see a minor hit with new changes in 21st Century Cures Act

    Congress last December passed the 21st Century Cures Act, which requires that the weighted average payment-to-cost ratio (PCR) for PPS-exempt hospitals be reduced by 1 percentage point starting in 2018. Therefore, CMS is proposing a target PCR of 0.89 for PPS-exempt hospitals, which would likely reduce the percentage increase in OPPS payments for almost all PPS-exempt hospitals.

    5. CMS considering date of service modification for molecular pathology tests

    CMS since 2001 has defined the date of service (DOS) for clinical diagnostic laboratory services as the date the specimen is collected. In 2006, the "14-day rule" was established to account for laboratory tests sampled during a patient's hospital stay that relate to treatment the patient receives post-hospital care. This rule made these tests eligible for separate payment under Medicare Part B if they meet certain conditions.

    Recently, CMS has received complaints that molecular pathology tests and ADLTs (advance diagnostic laboratory tests) that meet the 14-day rule requirements are not being paid for separately by Medicare. CMS is asking for feedback and considering modifying the DOS for molecular pathology tests and ADLTs, so that the DOS is the date the test is performed, should they meet the 14-day rule requirements outlined below:

    1. The physician orders the test following the date of a hospital outpatient's discharge from the hospital outpatient department;
    2. The specimen was collected from a hospital outpatient during an encounter (as both are defined 42 CFR 410.2);
    3. It would be medically inappropriate to have collected the sample from the hospital outpatient other than during the hospital outpatient encounter;
    4. The results of the test do not guide treatment provided during the hospital outpatient encounter; and
    5. The test was reasonable and medically necessary for the treatment of an illness.

    CMS will be accepting comments on implementation of these provisions until 5 p.m. ET on September 11, 2017. Electronic comments may be submitted at


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