Lawmakers Argue Against Proposed Pay Cut To Radiation Oncologists

Published by Inside Health Policy
John Wilkerson
September 3, 2014

Bipartisan groups of lawmakers in both chambers are urging CMS not to go through with proposed cuts in reimbursement for a procedure that kills cancer with targeted radiation. The lawmakers and radiation oncologists take issue with CMS' justification for one technical element of the proposal: that the vaults housing linear accelerators are indistinguishable from the medical-office buildings to which they join and therefore are not a direct practice expense.

CMS' decision in the proposed Physician Fee Schedule to remove radiation treatment vaults as a direct cost for radiation treatment codes would cut average Medicare reimbursement for radiation oncology services by 4 percent, and that's on top of the 20 percent in pay cuts to radiation oncology services over the past five years, the lawmakers write. Sens. Debbie Stabenow (D-MI) and Richard Burr (R-NC), and Reps. Devin Nunes (R-CA) and Paul Tonko (D-NY) are circulating sign-on letters in their respective chambers. House Energy & Commerce health subcommittee Chair Joe Pitts (R-PA) and ranking Democrat Frank Pallone (NJ) sent a separate solo letter making the same arguments.

The lawmakers write that the proposed pay change especially would hurt freestanding cancer therapy centers, which are expected to suffer a 6 percent reduction, and they note that those centers often are located in areas where hospitals with similar technology are few and far between. Industry predicts that, when combined with other proposed pay cuts for radiation oncology services, one-third of freestanding centers could shut down, which would push radiation treatments into hospitals where Medicare pays significantly more.
Cancer patients are treated in a linear accelerator that is located in what radiation oncologists call a vault. CMS officials say they cannot distinguish the vaults from the rest of the medical office buildings and imaging equipment so they're proposing to classify vaults as an indirect practice expense. The treatment vault is not viewed by CMS as a direct cost because it appears to be more similar to building infrastructure costs than to medical equipment costs, the proposed rule states, and it is difficult to distinguish the cost of the vault from the cost of the building.

But lawmakers argue that the vault is distinguishable from rest of the building.

"Not only is the vault distinct from medical imaging treatment room, as it is designed and constructed to ensure the safe delivery of radiation therapy for the specific radiation machine it is built to house," Stabenow and Burr write in a letter to CMS.

Vladimir Ioffe, a radiation oncologist at 21st Century Oncology, showed Inside Health Policy the vault in which the linear accelerator is used to treat patients -- the same vault that CMS officials visited before proposing to switch the cost of vaults to an indirect practice expense. The vault, which cost about $775,000, is built specifically for each linear accelerator. Were Ioffe's company to buy another linear accelerator, it would need to construct a new vault, and were 21st Century Oncology to lease a different building, it would have to tear down the vault and take the linear accelerator with them, he said.

The vault is connected to the medical office building, but it sits on an independent foundation, and the electrical and plumbing systems for it are separate from the rest of the building.

Ioffe also showed a room that houses an imaging machine. He said it makes sense to categorize rooms that house imaging equipment as an indirect expense because they don't require much specialization. However, the vault is surrounded by thick concrete walls and a special door because the linear accelerator is 400 times more powerful than imaging equipment.

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