Katie Keysor Senior Director Economics & Health Policy Economics 101: An Overview of General Terminology, Concepts and Hot Topics Katie Keysor Senior Director Economics & Health Policy

Alphabet Soup ACO – Accountable Care Organization ADIS – Advanced Diagnostic Imaging Services APC – Ambulatory Payment Classification APM – Alternative Payment Model 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 2

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 3

…And More ICD-9,10 – International Classification of Diseases IDTF – Independent Diagnostic Testing Facility LCD – Local Coverage Determination MAC – Medicare Administrative Contractor MACRA – Medicare Access and CHIP Reauthorization Act 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 4

…And More Still MIPS – Merit Based Incentive Payment System 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 PQRS – Physician Quality Reporting System 5

…Last one QPP – Quality Payment Program 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… 6

Economics: From New Technology to Coverage New Technology (published evidence) CPT Code Code Valuation Coverage 7

What are CPT Codes? CPT = Current Procedural Terminology Listing of descriptive terms/identifying codes for reporting of medical services and procedures Developed, owned, and copyrighted by American Medical Association (AMA) Updated Yearly – codes can be created, revised, or deleted 8

How are Codes Created? Code proposals are submitted to the CPT Editorial Panel for consideration The Panel meets three times a year to discuss the creation of new codes and the deletion or revision of existing codes It is comprised of 17 individuals: nominees from the Blue Cross and Blue Shield Association, the American Hospital Association, Americans Health Insurance Plans, the Centers for Medicare and Medicaid Services (CMS), and the American Medical Association (AMA) Radiology is represented on the CPT Editorial Panel by Daniel Picus, MD, FACR 9

Types of CPT Codes Category III Category I – high evidence threshold “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 10

How to Choose a CPT Code 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

International Classification of Diseases 10th Revision – Clinical Modifications (ICD-10-CM) Implemented October 1, 2015 Codes used to designate signs, symptoms, injury, disease, screen Establish medical necessity 3-7 characters (alphanumeric) Code to highest level of specificity 12

ACR Coding Resources Ultrasound Nuclear Medicine Interventional Radiology Update (SIR/ACR) 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 Clinical Examples in Radiology (AMA/ACR) Published quarterly Real dictations with expert analysis Documentation challenge Test case Semi-annual bulletin articles to address timely topics 66

What Happens After A Code is Created? New and revised CPT codes will need to be valued before they can be implemented 14

R B V S Radiology Allergy Testing Diaphragmatic Hernia Repair .01 108 Resource B Based Relative V Value S Scale Allergy Testing Diaphragmatic Hernia Repair Radiology .01 108 15

Total RVU + Work (PC) Practice Expense (TC)

What is the RUC? Formed in 1991 Convenes three times a year The RUC Panel is comprised of 31 members Radiology is represented by Zeke Silva, MD, FACR Makes value-based recommendations to CMS for new and revised codes coming from CPT Random surveys are conducted to gather data related to the time, intensity, and complexity of the procedure Data used to support the recommended RVU relative to all other procedures To understand what happened to CTC, we must understand the payment system involved. What the RUC is? What the RUC does? How the RUC functions?

What is Practice Expense? Considers the direct expense inputs related to the performance of the procedure Clinical Labor costs Costs of medical supplies Equipment costs To understand what happened to CTC, we must understand the payment system involved. What the RUC is? What the RUC does? How the RUC functions?

What Happens After The RUC? The AMA shares the RUC-approved values with CMS CMS publishes the values in the Medicare Physician Fee Schedule (MPFS) after their internal review CMS may choose to make refinements (revisions) to the values proposed by the AMA/RUC To understand what happened to CTC, we must understand the payment system involved. What the RUC is? What the RUC does? How the RUC functions?

Medicare Physician Fee Schedule (MPFS) 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

Clinical Decision Support Protecting Access to Medicare Act (PAMA) Mandate: Requires referring providers to consult appropriate use criteria (AUC) prior to ordering advanced diagnostic imaging services - CT, MR, nuclear medicine exams and PET - for Medicare patients.  CMS believes the goal of an appropriate use criteria (AUC) program is to promote the evidence-based use of advanced diagnostic imaging to improve quality of care and reduce inappropriate imaging. The law gives preference to AUCs developed by “Provider-Led” entities. The American College of Radiology is considered a “provider-led entity”. CMS envisions a system where the ordering professional would input information regarding the clinical presentation of the patient into the CDS tool and the tool would provide immediate feedback to the ordering professional on the appropriateness of one or more imaging services. Ideally, CMS would like to see multiple CDS mechanisms available that could integrate directly into, or be seamlessly interoperable with, existing health IT systems.

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 24

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

Policy Mechanics of MIPS Merit-Based Incentive Payment System (MIPS) starts in 2019. Essentially a modified fee-for-service program. New P4P program under FFS payment system Current penalties under PQRS, meaningful use (MU), value-based modifier (VBM) will end 2018 Performance and composite scores will be based on four categories: Quality (PQRS/30 percent) Resource use (VBM/30 percent) Meaningful Use (25 percent) Clinical Practice Improvement Activities (15 percent) MIPS categories to build/improve on PQRS, VBM and MU Composite scoring assesses performance on sliding scale and gives credit for benchmark attainment and improvement. The payment adjustments: negative for those below the threshold; zero for those at the threshold; positive above the threshold: 2019: capped at +/-4%; going to 2022 and beyond capped at +/-9%. One of the most important sentences in the legislation for radiology: “Encourage the use of qualified clinical data registries.”

Alternative Payment Models Loosely defined in the statute to permit innovation but do require physicians to assume two-sided financial risk and must include a quality component. e.g. ACOs, bundled payments, etc. CMS must define APM criteria by Nov. 1, 2016 To encourage physicians to take on this risk, legislation provides annual 5% incentive payments from 2019 to 2025. To be eligible for bonuses, participants need to receive at least 25% of their Medicare revenue through an APM in 2019-2020. Revenue threshold increases over time to 75% APM in 2023 on. APM Participants would be exempt from MIPS quality program. Beginning in 2026, providers participating in a qualifying APMs will have the opportunity to earn up to .75% in annual automatic adjustments while all other professionals will receive an annual automatic update of .25%.

Summary of New Payment Provisions MIPS APM Consolidated Value Based Payment Programs EHR incentive program PQRS Value-based modifier Clinical practice improvement Positive/Negative Adjustment phase in 2019- 4% 2020- 5% 2021-7% 2022 and subsequent years-9% Professionals who receive a significant share of their revenues through APMs will receive a 5% bonus each year from 2019-2025. Professionals who qualify for this bonus will be excluded from the MIPS assessment and most EHR meaningful use requirements. In 2026, Providers participating in APMs can earn up to .75% in annual automatic adjustments. Other professionals will receive 0.25%.

CMS COVERAGE DECISION LCD NCD (CAC) Once there is a levl 1 CPT code and it has been valued by the RUC, these are the 2 big outcomes LCD’s (local coverage determination) and NCD’s (national coverage determination).

What is a MAC? Medicare Administrative Contractor These are the folks who cut the checks for Medicare, and they are typically insurance companies that you know and love that have won bids to manage and pay Medicare claims 15 Jurisdictions 32

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 33

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) For coverage a test must be

MedCAC 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…” 35

US Preventive Services Task Force Since it’s a screening test, USPSTF IS INVOLVED. Of course you have heard of them in the context of mammography… “...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”

CT Lung Cancer Screening Received a grade B rating from the USPSTF. Subsequently CMS issued a national coverage determination (NCD) for the coverage of a lung cancer screening counseling and shared decision making visit as a preventative benefit effective February 6, 2015. Applicable in both the hospital outpatient and physician office setting. ACR submitted recommendations for work and direct PE inputs. The ACR recommended that CMS crosswalk LDCT to 71250 (computed tomography, thorax; without contrast material) with additional physician work added to account for the added intensity of the service.

CT Lung Cancer Screening After reviewing this recommendation, CMS believes that the physician work (time and intensity) is identical in both to 71250, and therefore, they are proposing valuation the same as 71250. CMS placed LDCT for LCS in APC 5570 (Level II Imaging Without Contrast), at a payment rate of $112.49 for the technical component in the hospital outpatient setting for 2016. For 2017, CMS reassigned LDCT to APC 5521 (Level I Imaging Without Contrast), at a payment rate of $59.84. Failure to pay for LDCT at an adequate rate will limit patient access to this service. 38

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 39

Private Payer Decisions Little to no transparency Not required to publish draft policies for public comment Relationships are key! 40

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