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Medicare Compliance & Reimbursement

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Medicare Announces New Cancer Drug Admin Codes

Published on Thu Nov 04, 2004

But are they enough to offset oncologists' losses in other areas?

Effective Jan. 1, 2005, the Centers for Medicare & Medicaid Services is implementing 14 new physician payment codes covering the cost of administering anti-cancer drugs, agency administrator Mark McClellan announced in an Oct. 12 letter to Rep. Nancy Johnson (R-CT).

McClellan said the codes would address oncologists' complaints that they have been under-reimbursed for administering the drugs. In the debate over the Medicare Modernization Act, oncology groups opposed efforts to reduce Medicare payments to physicians for the drugs themselves, even though these payments were almost universally regarded as excessive, on the grounds that any drug-acquisition overpayments were needed to make up for drug-administration underpayments.

In the end, Congress revamped the way Medicare pays for cancer-drug acquisition, moving to an "average sales price" methodology, but also ordered CMS to review the way it pays oncologists to administer the medications. The American Medical Association's Relative-Value Update Committee recommended the new codes to CMS pursuant to that review process.

"[One new code] will reflect the higher resource costs associated with infusing a second cancer drug," McClellan told Johnson. "Additionally, oncologists will be able to bill Medicare for more than one administration of a nonchemotherapy drug, as they can do currently for chemotherapy drugs." McClellan added that payments under the new codes will account for the time non-physician staff spend preparing medications.

But while McClellan's letter detailed the inputs, such as staff time, that will go into determining payment ranges under the new codes, McClellan did not reveal what those payment ranges would be.

In an Oct. 13 statement, the American Society of Clinical Oncologists - while welcoming the new codes as "a positive first step" - expressed disappointment at this omission, saying it "hampers our ability to conduct an analysis of the impact of the proposed changes."

ASCO offered a "rough estimate" that the new administration codes would increase 2005 physician cancer-care payments by about $100 million, as compared to a $500 million reduction in acquisition payments.

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