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What cancer programs need to know about Medicare's 2021 final rules

By Ashley RileyEmily Heuser

December 31, 2020

    We combed through CMS' Radiation Oncology (RO) Model interim final rule, Most Favored Nation interim final rule, calendar year (CY) 2021 HOPPS final rule, fiscal year (FY) 2021 IPPS final rule, CY 2021 MPFS final rule, and CY 2021 Home Health Prospective Payment System (PPS) final rule. Here are 8 things that cancer programs should know:

    1. RO Model delayed until January 2022
    2. Most Favored Nation Model targets oncology drugs
    3. CMS maintains current 340B rate payment
    4. New DRG for CAR T-cell therapy active starting Oct. 1, 2020

    5. Labs can bill Medicare directly for cancer-related protein-based MAAAs starting in 2021

    6. No major changes to radiation therapy and drug administration reimbursement

    7. CMS established payment for extended audio-only assessment on interim final basis for CY 2021, added 60+ services to Medicare telehealth list, and extended virtual direct supervision policy

    8. New Medicare home infusion therapy benefit to take effect in 2021 as site of care shift pressures increase

    Keep reading to learn more about each update.  

    1. RO Model delayed until January 2022

    The Consolidated Appropriations Act, 2021 enacted on December 27, 2020 prohibits implementation of the RO Model prior to January 1, 2022, effectively delaying the start date from July 1, 2021 to January 1, 2022. This announcement comes less than a month after CMS formalized its decision to delay the start date from Jan. 1, 2021 to July 1, 2021 due to the ongoing Covid-19 public health emergency (PHE) in an interim final rule with comment period released alongside the CY 2021 HOPPS final rule in Dec. 2, 2020. 

    CMS had planned to keep the originally scheduled end date for the RO Model and just shorten the Model performance period from five years to four and a half years when it had only planned to delay the start date by six months, but we're still waiting to hear if that will still be the case now that it will be delayed by a full year or if the whole timeline of the model will be shifted. With more time before the start of the model, it's also possible that we will see changes to the structure of the model as opponents continue to call for CMS to scale back the reimbursement cuts to participating radiation providers.

    Has your organization been selected to participate in the RO Model? Email if you'd be interested in joining a networking forum for program leaders to share how they're preparing, ask questions of one another, and brainstorm solutions together. This session is not intended to provide an in-depth review of methodology and will be best suited for leaders with strategic oversight of the cancer program.

    2. Oncology drugs major target of Most Favored Nation Model

    The Most Favored National Model calls for CMMI to implement a new seven-year payment model that will test whether aligning providers' payments for certain Medicare Part B drugs and biologics with the lower prices paid for the drugs in other countries will reduce federal spending on Medicare Part B. The model will be mandatory for hospitals and physician practices nationwide (although PPS-exempt cancer hospitals and a few other types of providers are exempt) and apply to 50 high-cost drugs and biologics responsible for a "high percentage" of Medicare Part B spending.

    For the 50 drugs included in the model, providers will be the lowest-adjusted international price (MFN price) for each drug and biologic plus a fixed per-dose add-on payment that will be the same for all included drugs. The model will be phased in over 4 years, so that payments for the drugs are based 100% on the MFN in year four (through year seven). The bad news for cancer programs: Hematology/Oncology or Medical Oncology is one of the top three billing specialties for 38 of the 50 (76%) drugs included in the Model and the top billing specialty for 29 of the 50 (58%) drugs. Based on two separate analyses, the American Society of Clinical Oncology (ASCO) found that the MFN Model could negatively impact cancer patient outcomes and cancer programs' financial stability. ASCO estimates that independent community oncology practices will see a 52% average loss of Medicare drug revenue once it’s fully phased in and that HOPDs will see an average loss of 50%.

    View the full list of drugs and top billing specialties here.

    The start date of the MFN Model is up in the air at the moment. The model was set to be implemented on Jan. 1, 2021 in the interim final rule issued on November 20, 2020, but the U.S. District Court for the District of Maryland issued a temporary restraining order on Dec. 23, 2020 that "temporarily restrains HHS from implementing, enforcing, or otherwise effecting the Most Favored Nation Rule for a period of fourteen days [until January 6, 2021]," according to updates posted on CMMI's website. Then on Dec. 28, 2020 the U.S. District Court for the Northern District of California issued a preliminary injunction prohibiting HHS from implementing the Most Favored Nation Rule pending completion of the notice and comment period for the interim final rule, which is scheduled to end on Jan. 26, 2021. With the turnover of the presidential administration taking place on Jan. 20, 2021, the fate of the MFN Model is even more unclear.

    3. CMS forgoes additional 340B rate cut, sticking with current ASP-22.5% payment

    In a small win for hospitals after being denied their request to reassess this summer's court decision that upheld CMS' 340B cuts, CMS announced in the CY 2021 HOPPS final rule that it will continue with its current 340B payment policy of paying ASP-22.5% for 340B-acquired drugs for 2021. While this will not likely appease those that deem CMS' initial 2018 340B reimbursement rate cut unlawful, this rate is at least more favorable than the agency's proposal to reduce the 340B reimbursement rate to ASP-28.7%.

    CMS explained that it did not finalize any additional changes to the 340B reimbursement rate to maintain consistent and reliable payment during the Covid-19 public health emergency. However, the agency noted that it's still considering the possibility of using 340B hospital survey data on drug acquisition cost to set future payment rates for 340B drugs. 

    4. New DRG for CAR T-cell therapy active starting Oct. 1, 2020

    CMS took another step to remove reimbursement barriers for CAR T-cell therapy in the FY 2021 IPPS final rule by finalizing a new dedicated DRG (MS-DRG 018) for the treatment for FY 2021 (ICD-10-PCS procedure codes XW033C3 or XW043C3 are now assigned to this MS-DRG). CMS will pay providers a base rate of $239,928.79 per case for the new DRG (0.18% more than proposed). Of note, CMS will distinguish between clinical trial and non-clinical trial use when calculating reimbursement for the DRG, reducing clinical trial reimbursement to an estimated 17% of the non-clinical trial reimbursement amount.

    While the new DRG is a step in the right direction, the reimbursement attached to it still does not cover the full cost of treatment ($373K on average) and administration (including labor, supplies, and hospitalization costs). In fact, the finalized reimbursement for the new DRG is still less than the $285,544 that cancer programs are currently reimbursed for CAR T, which has historically been billed under MS-DRG 016 and supplemented with new-technology add-on payment. 

    5. Labs can bill Medicare directly for cancer-related protein-based MAAAs starting in 2021

    CMS finalized in the CY 2021 HOPPS final rule changes to how it pays for cancer-related protein-based multianalyte assays with algorithmic analyses (MAAAs), which are tests (e.g., OncotypeDx) that combine results from two or more biochemical or molecular markers, along with patient demographics and clinical information, into an algorithm to generate diagnostic, prognostic, or predictive information for a disease. Historically, Medicare payment for these tests has been bundled with the HOPPS payment to the hospital for the outpatient encounter during which the test was performed and then the lab performing the test must seek payment from the hospital.

    Starting in 2021, cancer-related protein-based MAAAs will be added to the laboratory date of service (DOS) exception, so that labs performing these tests can bill Medicare directly and receive separate payment for the tests under the Clinical Lab Fee Schedule. CMS finalized this change after determining that because these tests are used to guide future surgical procedures and chemotherapeutic interventions, they rarely affect the treatment regimen during the same hospital outpatient encounter during which the sample was collected. Given the speed at which new cancer-related protein-based MAAAs are developed, CMS noted that this policy change applies to any cancer-related protein-based MAAA that is developed in the future as well.

    6. No major changes to radiation therapy and drug administration reimbursement

    HOPD reimbursement for levels 2, 3, and 5 radiation therapy ambulatory payment classifications (APCs) will increase slightly (1%-4%) in 2021 compared to 2020, according to CMS's CY 2021 HOPPS final rule, while reimbursement for levels 1, 4, 6, and 7 will decrease slightly (-2% - -4%). There will be almost no change in payment for radiation treatment preparation APCs.

    The outlook is slightly better for drug administration. Level 3 drug administration will see an 11% increase in reimbursement in 2021. However, there will only be small (3%-5%) or no increases for the other three levels of drug administration APCs.

    7. CMS established payment for extended audio-only assessment on interim final basis for CY 2021, added 60+ services to Medicare telehealth list, and extended virtual direct supervision policy

    The biggest surprise in the telehealth provisions of CMS's CY 2021 MPFS final rule is that the agency created a new HCPCS code (G2252) for an audio-only discussion longer than existing virtual check-ins on an interim basis for CY 2021. CMS has favored two-way, real-time, audio-visual interactions prior to the PHE, but hopes this will make it easier for patients without access to technology to receive care.

    The final rule also adds more than 60 services to the list of telehealth services that Medicare will cover. Nine of these services were added permanently on a Category 1 basis; the rest of the services were added temporarily on a Category 3 basis through the end of the year in which the PHE declaration ends. CMS noted that it's not adding Radiation Treatment Management Services (CPT code 77427) to the Medicare telehealth list either permanently or temporarily for 2021 even though it was included on the list on a Category 2 basis at the beginning of the PHE, which most commenters on the proposed rule supported.

    CMS also finalized its proposal to extend through Dec. 31, 2021, an interim final policy adopted under the PHE declaration to federal rules that allows direct supervision to include instances when a supervising physician or practitioner is overseeing other clinicians via interactive audio/video real-time communications technologies. This presumably includes supervision for chemo and radiation therapy provided in the physician office and freestanding settings and could foreshadow a permanent relaxation of supervision rules in these care settings to align with the recent shift to general supervision as the minimum requirement in the HOPD setting.

    8. New Medicare home infusion therapy benefit to take effect in 2021 as site of care shift pressures increase

    The new Medicare home infusion therapy benefit that was finalized in the CY 2020 Home Health Prospective Payment System (HH PPS) final rule will take effect on Jan. 1, 2021, replacing the home infusion therapy services temporary transitional payment established by the Bipartisan Budget Act of 2018 that began Jan. 1, 2019. This benefit extends coverage for home infusion therapy suppliers who bill Medicare Part B for professional services associated with home infusion therapy and is meant to ensure consistency in coverage for home infusion benefits for all Medicare beneficiaries. The new benefit requires that the home infusion therapy supplier is in the patient's home while the drug is being administered, which is a departure from previous coverage for training patients on drug self-administration, and specifically excludes insulin and self-administered drugs. The benefit provides a single payment for each home infusion drug administration day in the patient's home equivalent to five hours of infusion in a physician's office, which is determined using MPFS payment rates.

    CMS didn't propose or finalize any changes to the home infusion therapy benefit payment system in their CY 2021 HH PPS final rule beyond what was already finalized in the CY 2020 HH PPS final rule, but it updated the CY 2021 home infusion therapy services payment rates using the CY 2021 Physician Fee Schedule amounts. The CY 2021 HH PPS final rule does, however, finalize a proposed amendment to exclude services covered under home infusion therapy services benefit from the home health benefit and changes to enrollment requirements for home infusion therapy suppliers.


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