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HCFA Reevaluations May Affect Chemo Administration Cost Codes

HCFA Reevaluations May Affect Chemo Administration Cost Codes

PITTSBURGH--The Health Care Financing Administration's current
re-evaluation of reimbursements for physician work and practice
expenses could have "a major impact" on chemotherapy
administration cost codes, Joseph S. Bailes, MD, said at the Association
of Community Cancer Center's 1995 Oncology Symposium.

Dr. Bailes, chairman of the ASCO Clinical Practice Executive Committee,
explained that HCFA is required by law to re-evaluate physician
work values and make changes effective January 1, 1997. In addition,
Congress has ordered the agency to develop a more accurate method
to reflect practice expenses, and have that method in place by
January 1, 1998.

Most important for Medicare provider reimbursement is the practice
expense component, Dr. Bailes said. Practice expenses are currently
based on average allowed historical charges. HCFA is doing a survey
of 3,000 physician practices that their expert panels will use
to determine new codes for practice expenses.

"In theory, the new method will shift money from specialties
where practice expense is overpaid, ie, surgical, to those where
expenses are underpaid, ie, nonsurgical," Dr. Bailes said.

Because there is no scientifically accurate methodology to determine
indirect costs, HCFA is focusing on direct costs. Therefore, the
practice expense component for chemotherapy administration will
depend on whether oncology office indirect costs are allocated
to visits or to chemotherapy administration, he said.

"There is a downside risk to changes in chemotherapy administration
cost codes: Suppose they take hoods, chemo chairs, specialized
infusion areas, etc, and allocate those across all 7,000 service
cost codes. Odds are this will lower the chemo administration
code price. We believe these should be separate, that indirect
costs should be allocated directly to the chemo administration
codes," he said.

Another HCFA initiative may impact payment for cancer drugs. HCFA's
Carrier Work Group for Cancer Drugs is trying to develop a national
pricing mechanism that would estimate acquisition costs and pay
those amounts.

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