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.