Medicare payments for hospital outpatient positron emission tomography (PET) imaging will be cut significantly beginning in January 2007, despite modifications that dampen the impact of some of CMS' previous proposals.

CMS will pay equal amounts for single and multiple PET scans of the heart beginning Jan. 1, resulting in cuts of 70% for multiple scan procedures, according to the agency's final calendar year 2007 outpatient payment ¹ rule, released Nov. 1.

CMS created separate ambulatory payment classifications (APCs) for single and multiple images in 2005 to reflect what was perceived as different resource use for the procedures. Payment rates in 2006 were about $800 for a single scan and $2,485 for multiple scans (² Also see "CMS Proposes Deep Payment Cut For PET Scans In Draft Outpatient Rule" - Medtech Insight, 21 August, 2006., p. 5).

The new rate under a single classification, APC 307, is roughly $731.

Citing longer scan times for multiple procedures in comments on the proposal, stakeholders expressed doubts about the validity of data CMS used to show that multiple scans are no more costly than single scans.

CMS notes in the final rule, "We believed that it was possible that most hospitals performing multiple PET scans were particularly efficient in their delivery of higher volumes."

Non-myocardial PET scans will see cuts of 25% in 2007 as the procedure transitions from a new technology APC paying $1,150 to clinical APC 308 paying about $855. The procedure has been in a new technology APC since August 2000.

CMS had proposed the same move to APC 308 for PET combined with computed tomography imaging, a potential payment cut of 32%.

CMS' decision to keep PET/CT in a new technology APC shows some response to stakeholder comments that the cut was too drastic, but in the end dampened the effect by only $100.

Instead of paying $1,250 for PET/CT scans as it has since CY 2005, the procedure's new tech APC in 2007 will pay $950, a 24% decrease.

CMS did not follow a recommendation from the August meeting of its APC advisory panel suggesting that all devices in new technology APCs retain that classification for a minimum of two years to allow adequate cost data to accrue (³ Also see "APC Panel Recommends A Two-Year Commitment For New-Tech APCs" - Medtech Insight, 28 August, 2006., p. 12).

"We ... continue to believe that it occasionally may be appropriate to move a service from a New Technology APC to a clinical APC in less than two years," CMS writes. However, "we are convinced that, in this instance, we should wait for a full year of CPT-coded claims data prior to assigning the PET/CT services to a clinical APC."

Although CMS cites more than 76,000 claims for PET/CT, only nine months of claims data are available.

CMS Acting Deputy Administrator Herb Kuhn said during a Nov. 1 call announcing the rule's release that the agency is alarmed by the rapid increase in volume and intensity of outpatient services. From 2005 to 2006, payments increased an estimated 12%, and they are expected to grow an additional 9.2% in CY 2007.

Kuhn said the patterns are similar to what has happened with physician services, which has led Congress and the agency to seek significant cuts in payments to physicians for imaging and other procedures.

Few Changes For Device-Dependent APCs

Showing little variation from its August proposed rule, CMS will raise payments for 31 device-dependent APCs in 2007, while payments for 11 decrease.

The payment median for insertion or replacement of pacemakers goes up 9% from 2006 levels to $7,557, and the median for pulse generator insertion or replacement jumps 12% to $6,007. Implantable cardioverter defibrillator lead procedures increase 4% to $23,205.

Meanwhile level II implantation of a neurostimulator drops 20% from its 2006 payment median to $14,846. In total, six APCs decline more than 10% in median cost.

In 2006, CMS set a floor for median payment reductions, not allowing them to drop more than 10%, having instituted similar floors in prior years. Despite concerns from device stakeholders - AdvaMed and the Medical Device Manufacturers Association asked that payments not drop below 100% and 95% of 2006 rates, respectively - CMS will not limit the percent reduction on device-dependent APCs in 2007 (⁴ Also see "CMS Bypasses Floor Adjustment For 2007 Device-Dependent APCs" - Medtech Insight, 14 August, 2006., p. 4).

Stakeholders Are Heard On ASC Changes

Also included in the rule released last week is the updated list of procedures eligible for payment in ambulatory surgical centers (ASCs), effective Jan. 1.

Of the 14 procedures CMS had proposed to add, three are not included in the final rule. AdvaMed requested that two CPT codes for transcatheter placement of peripheral stents (not in the heart, carotid or vertebral vessels) not be permitted in ASCs because of safety concerns related to complications in major blood vessels.

Although other stakeholders supported the procedures' inclusion, "we found the divergence of responses among public comments troubling," CMS notes. Upon reconsideration, the agency decided the two stenting procedures and a third it had proposed, venous angioplasty, are inappropriate for the ASC setting.

The final rule adds another 10 procedures, including insertion of mesh for repair of pelvic floor defect, to the inclusion list in response to commenter requests.

CMS also reacted to stakeholder feedback by moving endometrial ablation without hysteroscopic guidance to a higher payment of $995 and hysteroscopy with endometrial ablation to a payment of $1,339 in 2007. Both procedures were previously paid $630.

The final rule also applies Sec. 5103 of the Deficit Reduction Act of 2005, which requires CMS to cap standard overhead payments for ASC surgical procedures at outpatient payment levels.

The mandate lowers payments for 275 procedures, including percutaneous breast biopsy and brain canal shunt procedures.

The coordination between the two payment systems is a step toward a larger overhaul slated for 2008 that will tie payments in the ASC setting to outpatient rates (⁵ Also see "CMS Proposes Two-Year Phase-In For Ambulatory Surgical Center Reform" - Medtech Insight, 14 August, 2006., p. 3). Comments on the 2008 changes CMS has proposed for the ASC system are due Nov. 6.

- Chloe Taft

Outpatient Payments For PET Scans Slashed, Few Changes To CMS Proposals

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