Economics 101: An Overview of General Terminology and Concepts

Katie Keysor

Director, Economics & Health Policy

2

Economics & Health Policy Department Staff

Angela Kim, Senior Director Pamela Kassing Diane Hayek Katie Keysor Gloria Garcia Stephanie Le

Anita McGlothlin Laura Pattie Gloria Bland Evelyn Gilbert Rynzelle Spraggs 2 Vacant Positions

Cindy Moran, Assistant Executive Director

3

ACR Commission on Economics

Geraldine McGinty, MD, MBA, Chair Katie Keysor, Staff Pam Kassing, Staff

19 Committees/Subcommittees

4 Networks

4

Committee Staff Chair(s)

Body Imaging Committee Gloria Garcia David Paushter

Breast Imaging Committee Laura Pattie Ellen Mendelson

Coding & Nomenclature Committee Diane Hayek, Gloria Garcia, Laura PattieDaniel Picus (Chair) Timothy Crummy (Vice Chair)

Economic Issues in Academic Radiology Committee Pam Kassing James V. Rawson

Future Trends Committee Pam KassingDavid C. LevinFrank J. Lexa (Co-Chair)

GSR Committee Kathryn Keysor Robert S. Pyatt

HOPPS/APC Committee Pam Kassing James V. Rawson

Interventional & Cardiovascular Radiology Committee Gloria Garcia Sean Tutton

Managed Care Committee Kathryn Keysor Mark O. Bernardy

Medical Physics Committee Anita McGlothlin Michael D. Mills

Neuroradiology Committee Laura PattieRobert M. Barr William Donovan (Co-Chair)

Nuclear Medicine Committee Laurie Pattie Gary Dillehay

Pediatric Radiology Committee Anita McGlothlin Richard M. Benator

Practice Expense Committee Stephanie Le/Angela Kim Ezequiel Silva

Radiation Oncology Committee Anita McGlothlin Louis Potters

Reimbursement Committee Stephanie Le/Angela Kim William Donovan

Ultrasound Committee Stephanie Le John S. Pellerito

Utilization Management Committee Kathryn Keysor Christopher Ullrich

Value Added Sub Committee Stephanie Le/Angela Kim Ezequiel Silva

5

ACR Commission on Economics - Networks

Carrier Advisory Committee (CAC) Network Radiology

Robert Zeman, MD (Chair) Shawn Conwell, MD (Vice-Chair)

Radiation Oncology Richard Hudes, MD Donald Schwartz, MD

Managed Care Network Mark Bernardy, MD (Chair)

Medicaid Network Raymond Tu, MD (Chair)

Radiology Integrated Care (RIC) Network David Rosman, MD (Chair) Jack Farinhas, MD (Vice-Chair)

6

Alphabet Soup

ACO – Accountable Care Organization ADIS – Advanced Diagnostic Imaging Services APC – Ambulatory Payment Classification CAC – Carrier Advisory Committee CPT – Current Procedural Terminology CERT – Comprehensive Error Rate Testing CF – Conversion Factor CMD – Contractor Medical Director CMS – Centers for Medicare and Medicaid

Services

7

More Alphabet Soup

DOS – Date of Service DRA – Deficit Reduction Act EHR – Electronic Health Record E/M – Evaluation and Management GPCI – Geographic Practice Cost Index HCPCS – Healthcare Common Procedural Coding System HHS – Health and Human Services HIT – Health Information Technology HOPPS – Hospital Outpatient Prospective Payment

System IPAB – Independent Payment Advisory Board

8

…And More

ICD-9,10 – International Classification of Diseases IDTF – Independent Diagnostic Testing Facility LCD – Local Coverage Determination MAC – Medicare Administrative Contractor MCC – Managed Care Committee MCN – Managed Care Network MedCAC – Medicare Evidence Development and Coverage

Advisory Committee MedPAC – Medicare Payment Advisory Commission MFS – Medicare Fee Schedule MEI – Medicare Economic Index

9

…And More Still

MPPR – Multiple Procedure Payment Reduction NCD – National Coverage Determination NCCI – National Correct Coding Initiative NPI – National Provider Identifier PC, -26 – Professional Component POS – Place of Service PPACA – Patient Protection and Affordable Care Act of 2010 PPIS – Physician Practice Information Survey PPS – Prospective Payment System PQRI – Physician Quality Reporting Initiative

10

…Last one

RAC – Recovery Audit Contractor RBM – Radiology Business Management Company RBMA – Radiology Business Management Association RCCB – Radiology Coding Certification Board RVU – Relative Value Unit RUC – Relative Value Update Committee SGR – Sustainable Growth Rate TC – Technical Component

And many others…

11

Economics: From New Technology to Coverage

New Technology (published evidence)

CPT Code Code Valuation Coverage

CPT Coding Background

CPT = Current Procedural Terminology “Codes” Number assigned to services provided to patients Evolve over time (new, revised, eliminated) Developed, owned, and copyrighted by AMA

12

CPT Editorial Panel (17 members)

Blue Cross and Blue Shield Association (1) American Hospital Association (1) American’s Health Insurance Plans (1) Centers for Medicare and Medicaid Services (1) Health Care Professionals Advisory Committee (2) Physicians (11)

Appointed by AMA Board of Trustees Radiology is NOT guaranteed a seat!

Source: Duszak, “The CPT Process and How It Influences Our Economic Future”

13

Types of CPT Codes

Category III “Emerging Technology” Intended to be used for data collection to substantiate

widespread use

Category I – high evidence threshold Distinct service/procedure FDA approved Widely performed (in USA) Substantial US peer reviewed literature

14

How to Choose a CPT Code

Pre- 2001 CPT Instructions: Select the code that most accurately identifies the

service performed

2002 CPT Instructions: Select the code that accurately identifies the service

performed Do not select a code that merely approximates the

service provided If no accurate code exists, then use an unlisted code

Once FDA approved, and modest clinical trial data exists…

Level III CPT code is likely to be approved… Once there’s level III code, Medicare Administrative

Contractors (MACs) may choose to develop local coverage determinations (LCDs) and private payers may offer some limited coverage

This may precede CMS consideration of whether or not a national policy is needed Example: coronary CTA, diagnostic CTC

Level III codes are valued locally

16

ACR Coding Products

ACR Coding Guides

Ultrasound (2013)

Nuclear Medicine (2013)

Radiation Oncology (ASTRO/ACR - 2013)

Interventional Radiology Update (SIR/ACR - 2013)

66

ACR Coding Products

Newsletters: ACR Radiology Coding SourceTM

Bimonthly electronic newsletter on coding & reimbursement

Feature article Medicare and third party payer issues Q&A CEUs available toward RCCB certification

ACR Coding Products

Clinical Examples in Radiology AMA-ACR Coding Publication (2005) Published quarterly

Real dictations with expert analysis Documentation challenge Test case Q&A Semi-annual bulletin articles to address timely topics

American Medical Association Specialty Society

R

RelativeValue Scale

U

Update

C

Committee

R

Resource

B

Based

R

Relative

V

Value

S

Scale

Total RVU

22

Practice Expense (TC)

+

Work (PC)

23

ACRRefine-ment Panel

RUC CMS CMS FINAL

Medicare Physician Fee Schedule (MFS)

How radiologists get paid for their work and practice expense for their offices

Medicare Physician Fee Schedule

Proposed Rule published in late June/early July

Final Rule published in late October/early November

Monitor the impacts of adjustments to the MFS for increases and decreases in physician work, practice expense and malpractice RVUs

Other CMS payment policy decisions (e.g. MPPR, interest rate, utilization rate, etc.)

Analyze these effects and write formal comments to CMS on areas of concern

Multiple Procedure Payment Reduction

26

No credible data justifies these proposals Permanently devalues Radiology relative to

other physician services 2013 CMS rule: 25% PC MPPR reduction across

group practices $100 Mil savings – redistributed to others Independent of any other “adjustments”

Hospital Outpatient Prospective Payment System (HOPPS)

HOPPS mandated by Balanced Budget Act (BBA) of 1997

April 7, 2000 CMS issued final rule on HOPPS

HOPPS went into effect August 2000

Previously Medicare paid for services performed in

hospital in a variety of methodologies based on

reasonable costs

Prospective Payment System

Less granular than Medicare Physician Fee Schedule

Belief that prospective payments incent efficiency

Other examples: DRG payments to hospitals for inpatient admission

Payments calculated annually based on hospital charges

28

Ambulatory Payment Classifications

Service divided into ambulatory payment classifications

(APC)

Each APC encompasses services that are clinically

similar and require similar resources

All services within an APC are generally paid at same

prospectively-fixed rate.

Payment determined by hospital charges submitted to

CMS

2 Times Rule

CMS considers the items and services within a

group as NOT comparable if the highest median

cost for an item or service within a group is more

than two times greater than the lowest median

cost

Proactive Work with CMS

Work with The Moran Company to analyze new bundled

CPT codes based on predecessor codes

Meet with CMS staff in person to provide

recommendations prior to publication of Final Rule

CMS is appreciative of the information and generally

accepts recommendations

CMS COVERAGE

DECISION

LCD NCD (CAC)

What is a MAC? Medicare Administrative Contractor

33

15 Jurisdictions

34

Local Coverage Determination (LCD)

Most Medicare coverage decisions are made at the local level through LCDs No LCD does not mean there is no coverage

MACs are required to post draft coverage policies for comment and hold Carrier Advisory Committee (CAC) meetings to discuss the policies ACR CAC Networks

Screening coverage must be through a National Coverage Determination

National Coverage Determination - NCD

“reasonable and necessary for the diagnosis or treatment of an illness or injury within the scope of a Medicare benefit. “NCD’s are made through evidence-based process… with public participation. In some cases CMS’ own research is supplemented with an outside technology assessment and/or consultation with MEDCAC” (eg internal decision cardiac flow add-on code for cardiac MRI)

MedCAC

36

Provide independent, expert guidance…“Up to 100 experts in clinical and administrative medicine, biological and physical sciences, public health administration, patient advocacy, health care data management and information analysis, health care economics,and medical ethics…”

US Preventive Services Task Force

“...independent panel of private sector experts in prevention and primary care…conducts rigorous impartial assessments of the scientific evidence… for effectiveness of screening, counseling, and preventative medications”

Private Payer Coverage – Influences

Medicare Often, Medicare coverage or non-coverage equals private payer

coverage or non-coverage, but not always

Blue Cross Blue Shield Association Technology Evaluation Center (TEC)

United States Preventative Services Task Force (USPSTF) Increasing influence on Medicare coverage decisions Some payers now cite the USPSTF in their coverage decisions

Radiology Benefits Management Companies (RBMs) Most say that they use ACR Practice Guidelines and

Appropriateness Criteria, but do not have transparent processes

38

The TEC uses five criteria to evaluate new technologies The technology must have final approval from the

appropriate governmental regulatory bodies. The scientific evidence must permit conclusions concerning

the effect of the technology on health outcomes. The technology must improve the net health outcome. The technology must be as beneficial as any established

alternatives. The improvement must be attainable outside the

investigational settings.

39

Blue Cross Blue Shield Association Technology Evaluation Center (TEC)

Little to no transparency

Not required to publish draft policies for public comment

Relationships are key!

40

Private Payer Decisions

41

ACR Networks

CAC Managed Care Medicaid Radiology Integrated Care (RIC) General, Small, and Rural Practices

The Networks are the eyes and ears of the ACR!

James Moorefield Economics Fellowship Two week program

Learn about activities of the College, and specifically about economics.

Provide clinical feedback on various projects

Two interns per year

Applications accepted February-April

QUESTIONS???

kkeysor@acr.org