On October 18, draft legislation was released that would help radiation oncology by revamping key aspects of the Medicare Physician Fee Schedule (MPFS) that have negatively impacted the specialty. This legislation is largely the result of efforts of the American Medical Association (AMA) MPFS Reform Workgroup, in which ASTRO has been actively participating.

Why it matters
Radiation oncology payments under the MPFS have dropped by 25% since 2013, including recent cuts stemming from application of the MPFS’ budget neutrality requirements. Under current law, any changes to the MPFS payments must be done in a budget neutral way, meaning that if the Centers for Medicare and Medicaid Services (CMS) estimates changes in one area of the MPFS will increase (or decrease) total Medicare spending by more than $20 million, it must reduce (or sometimes increase) spending in other areas of the MPFS.

A recent example that impacted radiation oncology was the update to clinical labor pricing, which raised reimbursement for specialties with high clinical labor costs, but cut reimbursement for specialties that use expensive equipment, like radiation oncology. The draft legislation would change budget neutrality rules to reduce the severity of year-over-year changes in the MPFS.

If passed, the legislation would:

• Increase the budget neutrality threshold from $20 million to $53 million in 2025
  • Beginning in 2030, the $53 million threshold would be adjusted for inflation (Medicare Economic Index) every five years.
• Provide a lookback period to reconcile overestimates and underestimates of pricing adjustments for individual services
  • Budget neutrality adjustments under the MPFS are partly based on projections of how much a new code or service will be utilized. Under this provision, data would be collected and analyzed, with CMS making corrections based on actual utilization data in the next rulemaking cycle. Any adjustments would not be subject to budget neutrality requirements.
• Require more regular updates to direct costs used to calculate practice expense (PE) relative value units (RVU)
  • Every five years, CMS would be required to update prices and rates for direct cost inputs for PE RVUs, including clinical labor pricing and supply and equipment pricing. More frequent updates would reduce extreme payment cuts.
• Limit positive or negative changes in the conversion factor to no greater than 2.5% each year (beginning in 2025)
  • Preventing large changes in the conversion factor would have a stabilizing impact on the MPFS.  

The bill was introduced by the GOP Doctors Caucus leaders and considered during a House Energy and Commerce Subcommittee on Health hearing on October 19.

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