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

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Presentation on theme: "Economics 101: An Overview of General Terminology and Concepts Katie Keysor Director, Economics & Health Policy."— Presentation transcript:

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

2 Economics & Health Policy Department Staff  Angela Kim, Senior Director  Pamela Kassing  Diane Hayek  Katie Keysor  Gloria Garcia  Stephanie Le 2  Anita McGlothlin  Laura Pattie  Gloria Bland  Evelyn Gilbert  Rynzelle Spraggs  2 Vacant Positions Cindy Moran, Assistant Executive Director

3 ACR Commission on Economics  Geraldine McGinty, MD, MBA, Chair  Katie Keysor, Staff  Pam Kassing, Staff  19 Committees/Subcommittees  4 Networks 3

4 CommitteeStaffChair(s) Body Imaging CommitteeGloria GarciaDavid Paushter Breast Imaging CommitteeLaura PattieEllen Mendelson Coding & Nomenclature CommitteeDiane Hayek, Gloria Garcia, Laura Pattie Daniel Picus (Chair) Timothy Crummy (Vice Chair) Economic Issues in Academic Radiology CommitteePam KassingJames V. Rawson Future Trends CommitteePam Kassing David C. Levin Frank J. Lexa (Co-Chair) GSR CommitteeKathryn KeysorRobert S. Pyatt HOPPS/APC CommitteePam KassingJames V. Rawson Interventional & Cardiovascular Radiology CommitteeGloria GarciaSean Tutton Managed Care CommitteeKathryn KeysorMark O. Bernardy Medical Physics CommitteeAnita McGlothlinMichael D. Mills Neuroradiology CommitteeLaura Pattie Robert M. Barr William Donovan (Co-Chair) Nuclear Medicine CommitteeLaurie PattieGary Dillehay Pediatric Radiology CommitteeAnita McGlothlinRichard M. Benator Practice Expense CommitteeStephanie Le/Angela KimEzequiel Silva Radiation Oncology CommitteeAnita McGlothlinLouis Potters Reimbursement CommitteeStephanie Le/Angela KimWilliam Donovan Ultrasound CommitteeStephanie LeJohn S. Pellerito Utilization Management CommitteeKathryn KeysorChristopher Ullrich Value Added Sub CommitteeStephanie Le/Angela KimEzequiel Silva 4

5 ACR Commission on Economics - Networks  Carrier Advisory Committee (CAC) Network  Radiology  Robert Zeman, MD (Chair)  Shawn Conwell, MD (Vice-Chair)  Radiation Oncology  Richard Hudes, MD  Donald Schwartz, MD  Managed Care Network  Mark Bernardy, MD (Chair)  Medicaid Network  Raymond Tu, MD (Chair)  Radiology Integrated Care (RIC) Network  David Rosman, MD (Chair)  Jack Farinhas, MD (Vice-Chair) 5

6 Alphabet Soup  ACO – Accountable Care Organization  ADIS – Advanced Diagnostic Imaging Services  APC – Ambulatory Payment Classification  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 6

7 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 7

8 …And More  ICD-9,10 – International Classification of Diseases  IDTF – Independent Diagnostic Testing Facility  LCD – Local Coverage Determination  MAC – Medicare Administrative Contractor  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 8

9 …And More Still  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  PQRI – Physician Quality Reporting Initiative 9

10 …Last one  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… 10

11 Economics: From New Technology to Coverage New Technology (published evidence) CPT Code Code Valuation Coverage 11

12 CPT Coding Background  CPT = Current Procedural Terminology  “Codes”  Number assigned to services provided to patients  Evolve over time (new, revised, eliminated)  Developed, owned, and copyrighted by AMA 12

13 CPT Editorial Panel (17 members)  Blue Cross and Blue Shield Association (1)  American Hospital Association (1)  American’s Health Insurance Plans (1)  Centers for Medicare and Medicaid Services (1)  Health Care Professionals Advisory Committee (2)  Physicians (11)  Appointed by AMA Board of Trustees  Radiology is NOT guaranteed a seat!  Source: Duszak, “The CPT Process and How It Influences Our Economic Future” 13

14 Types of CPT Codes  Category III  “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 14

15 How to Choose a CPT Code  Pre- 2001 CPT Instructions:  Select the code that most accurately identifies the service performed  2002 CPT Instructions:  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

16 Once FDA approved, and modest clinical trial data exists…  Level III CPT code is likely to be approved…  Once there’s level III code, Medicare Administrative Contractors (MACs) may choose to develop local coverage determinations (LCDs) and private payers may offer some limited coverage  This may precede CMS consideration of whether or not a national policy is needed  Example: coronary CTA, diagnostic CTC  Level III codes are valued locally 16

17 ACR Coding Products ACR Coding Guides Ultrasound (2013) Nuclear Medicine (2013) Radiation Oncology (ASTRO/ACR - 2013) Interventional Radiology Update (SIR/ACR - 2013) 66

18 ACR Coding Products  Newsletters:  ACR Radiology Coding Source TM  Bimonthly electronic newsletter on coding & reimbursement  Feature article  Medicare and third party payer issues  Q&A  CEUs available toward RCCB certification


20 ACR Coding Products Clinical Examples in Radiology  AMA-ACR Coding Publication (2005)  Published quarterly  Real dictations with expert analysis  Documentation challenge  Test case  Q&A  Semi-annual bulletin articles to address timely topics

21 American Medical Association Specialty Society R Relative Value Scale U Update C Committee R Resource B Based R Relative V Value S Scale

22 Total RVU 22 Practice Expense (TC) + Work (PC)

23 23 ACR Refine- ment Panel RUCCMS FINAL

24 Medicare Physician Fee Schedule (MFS)  How radiologists get paid for their work and practice expense for their offices

25 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

26 Multiple Procedure Payment Reduction 26  No credible data justifies these proposals  Permanently devalues Radiology relative to other physician services  2013 CMS rule: 25% PC MPPR reduction across group practices  $100 Mil savings – redistributed to others  Independent of any other “adjustments”

27 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

28 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 28

29 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

30 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

31 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


33 What is a MAC? Medicare Administrative Contractor 33 15 Jurisdictions

34 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 34

35 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)

36 MedCAC 36 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…”

37 US Preventive Services Task Force “...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”

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 38

39  The TEC uses five criteria to evaluate new technologies  The technology must have final approval from the appropriate governmental regulatory bodies.  The scientific evidence must permit conclusions concerning the effect of the technology on health outcomes.  The technology must improve the net health outcome.  The technology must be as beneficial as any established alternatives.  The improvement must be attainable outside the investigational settings. 39 Blue Cross Blue Shield Association Technology Evaluation Center (TEC)

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

41 ACR Networks  CAC  Managed Care  Medicaid  Radiology Integrated Care (RIC)  General, Small, and Rural Practices The Networks are the eyes and ears of the ACR! 41

42 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


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