Relevant, Timely Medical and Radiation Oncology News

Constant advancements in medical technology and healthcare regulations mean the oncology industry is dynamic and fast-changing. To keep clients on the leading edge of what's happening, Revenue Cycle Inc. maintains the news section of its website as a clearinghouse for oncology news, CPT® coding and/or business operations. Whether it's a legal change that could affect our industry or a tip about oncology coding, you'll find it here.

For more information about how our team of expert consultants can help your practice stay current on these industry changes, visit our medical and radiation oncology service page.

April 2017 Medical Oncology News

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MedPAC Recommends New Part B Drug Pricing System

Teri Bedard BA, R.T. (R)(T), CPC

In early March 2017 the Medicare Payment Advisory Committee (MedPAC) was presented with recommendations by the chairman for reforming the Part B drug payment program. On April 6, 2017, MedPAC voted unanimously to recommend a competitive pricing program and other reimbursement changes for the Medicare Part B drug program.

The new pricing system would include a voluntary Drug Value Program (DVP). The DVP would include a small number of vendors who would negotiate prices paid for the drugs; however, these vendors would not be the ones shipping the drugs. The providers who volunteer in the DVP would purchase the drugs at the vendor-negotiated rate and Medicare would then pay the providers the rate plus an administration fee. The administration fee would be based on either the Medicare Physician Fee Schedule (MPFS) or Hospital Outpatient Prospective Payment System (HOPPS) rate. Additionally, participating providers would also be able to share in any cost savings as part of the DVP.

Additional changes to the Part B drug program by MedPAC include the following: 

  • Improving reporting of the average sales price (ASP) data. All manufacturers of drugs covered under Part B would be required to report data, not just those who have arrangements with Medicaid, and penalties would increase for those not reporting. 
  • Payments modified for drugs paid at wholesale acquisition cost (WAC) to WAC +3%; a reduction from the current rate of WAC +6%. 
  • Limit payment rate increases for drugs based on ASP. Currently there is no limit on how much the payments can increase. Manufacturers would pay a rebate if their products’ ASP exceeded a particular inflation benchmark, such as the consumer price index. 
  • Implement consolidated billing codes for biosimilar drugs. Reference biologics and their biosimilars would be paid under a single code; this would match the current process for brand-name drugs and their generic counterparts. Additionally, the Health and Human Services Secretary might also consider using a consolidated billing code for groups of products with similar health effects.

In an effort to make the DVP more attractive for providers to participate in, the ASP add-on percentage would be cut. If these changes by MedPAC were implemented, the Part B drug program could result in a projected decrease in spending of $250-$750 million in the first year and $1 billion to $5 billion over the next 5 years.  

MedPAC also attended a presentation on what a Medicare premium support program would include in the event Congress and the Trump administration instituted such a program. A Medicare premium support program would provide Medicare beneficiaries with a set amount of money from the federal government to purchase one of several health insurance plans available. Concerns were discussed if such a program was instituted and what it could mean for beneficiaries of various incomes or how access to information by beneficiaries could impact their decisions for healthcare. MedPAC indicated they were not endorsing a premium support program, but felt it was their responsibility to discuss and provide information and advice concerning ideas others have mentioned to revamp the Part B drug program.  

You can stay current with oncology coding and reimbursement news through Revenue Cycle Inc.’s Client Resource Center (CRC) which offers easily accessible answers around the clock, along with a library of resources and articles. To find out about an annual subscription and all of our consulting services, please call us at 512-583-2000 or visit our contact page.

April 2017 Radiation Oncology News

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Contract Management

Jeremy Hogan & Matt Terry, MBA, BSRT (R)(T)

What is contract management and what does it mean to your revenue cycle?

Contract management is the art of negotiating your reimbursement amount from the various payers for services provided. The process does not include regular Medicare, Tricare, VA (Veterans Administration), or Medicaid, which have a preset rate that is non-negotiable. However, it does include Medicare Plus plans (Medicare Advantage), which have a negotiable rate that typically ranges from 70% to 120% or more of the facility specific Medicare rate for HOPPS1 (APC2 based) and/or MPFS3 (RVU4 based). Contracted rates can be a percentage of a fee schedule such as Medicare, a percentage of billed charges, or a combination of both, case rates, and/or specific reimbursement by HCPCS5 code.

Most managed care contracts (MCC) contain additional reimbursement language concerning services that do not follow the predetermined reimbursement schedule. These are characterized as carve outs, and may be applicable to new codes added annually by the AMA. There are other types of carve outs that may be reimbursed outside the normal agreed upon fee schedule such as high volume or expensive services. Carve outs must be evaluated individually based on resources utilized and frequency.

Managed care contracts have a predetermined effective time limit which can be 1 to 2 years in many cases. The language in the MCC usually states the contract can be renegotiated after a certain time frame, or if the facility chooses not to renegotiate, the existing terms are rolled over to the next time period.

There is also contract language that identifies the time frame in which a claim must be provided to the payers (timely filing), payment time frames in which the claim must be paid by the payer, and processes and time frames for appealing denied and/or unpaid claims. The language in the contract typically states both parties agree to mediation of disagreements versus utilizing a court of law, if necessary.

Revenue Cycle Inc. can also assist the facility with charge master management. This includes evaluation of the charge master to ensure charges exceed contracted allowable amounts so no money is left on the table. In many contracts, especially those reimbursing a percentage of charges billed, there is also a ‘charge creep’ clause in which a provider can only increase their charge master fees a specified amount on an annual basis. If this clause is violated, the provider may have to reimburse the payer for the difference plus potential interest fees. If a charge creep clause is in place, RCI may be able to utilize rate optimization techniques. The technique involves increasing some prices and reducing others so there is a net neutral outcome to the overall charge master while increasing revenue capture, thus avoiding violation of the charge creep clause.

Once a contract has been negotiated, the payment terms should be loaded into your practice management contract management module to ensure you are being reimbursed according to contract terms and to identify overpayments to be refunded to the payer and underpayments that need to be appealed to the various payers. If you do not have a contract management module, you will have to create a manual audit process to ensure terms of the contract are being followed. As you may know, all under and overpayments are the responsibility of the provider to identify and interest may be applicable, per your contract language.

Not sure you have this information organized, loaded, or ready for renegotiation? Revenue Cycle can review existing contracts for favorable rates and language, perform manual spot audits to determine if the facility is being reimbursed appropriately, and ensure the charge master is appropriately priced to allow maximum reimbursement per contract. In addition, we will review the contract management system module to verify it is set up appropriately and develop a schedule of contract expirations and terms needed for renegotiation. To take it one step further, our team can assist you in renegotiating the provider contracts if requested. To get help managing your contracts, rely on the experts at Revenue Cycle Inc. For more information, please contact us at 512-583-2000 or


1 HOPPS – Hospital Outpatient Prospective Payment System

2 APC – Ambulatory Payment Classification

3 MPFS – Medicare Physician Fee Schedule

4 RVU – Relative Value Unit

5 HCPCS – Healthcare Common Procedure Coding System