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March 27, 2018

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Medicare to Pay for Brachytherapy Sources and Application

December 11, 2007:
The Centers for Medicare and Medicaid Services (CMS) will pay for brachytherapy sources separately on a prospective basis for 2008. As of December 31, 2007, brachytherapy sources will no longer be paid on the basis of their charges adjusted to cost and all codes will be assigned to status indicator K.

Brachytherapy sources have been separately paid for most of the seven years of the outpatient prospective payment system (OPPS), and hospitals have had seven years of experience in reporting the sources separately to receive payment for these relatively costly items. CMS believes that hospitals historically have had a strong incentive to bill for sources at charges that reflected the costs of the sources and that 2006 claim data are sufficient to provide the basis for prospective payment.

The median cost for stranded sources is set at the 60th percentile of the aggregate claims data for the predecessor code for the source, and for nonstranded sources, the median cost is set at the 40th percentile of the aggregate claims data for the predecessor code for the source. While CMS understands that there is variability among sources, the agency feels that the underlying concept of OPPS—averaging—is sufficient to accommodate the cost variations and no special adjustments to median costs are necessary.

Brachytherapy source costs are eligible for outlier payment and are subject to scaling for budget neutrality. Brachytherapy payments are included in the group of services eligible for the 7.1 percent payment increase for rural sole community hospitals (SCH), including essential access community hospitals (EACH).

The national unadjusted payment rate for the two not otherwise specified (NOS) codes, C2698 and C2699, is equal to the lowest stranded or nonstranded prospective payment rate for such sources, respectively, paid on a per source basis. This payment methodology for NOS sources provides payment to a hospital for new sources, while encouraging interested parties to quickly bring new sources to CMS’s attention so specific coding and payment can be established. New brachytherapy source codes may be established quarterly.

As previously instructed, hospitals are to report the costs related to supervision, handling, and loading of brachytherapy sources in one of two ways. The costs can be separately reported using CPT® code 77790 Supervision, handling, loading of radiation source, or can be included in the charge reported with the HCPCS procedure code(s) for application of the radiation source. Reporting in either of these ways results in the costs of special handling being packaged into payments for brachytherapy treatment procedures.

In response to comments, CMS stated that the agency understands that since high dose rate iridium has a fixed active life and must be replaced every 90 days, hospitals’ costs for the source will be highly dependent on the number of treatments provided by a hospital during that time period. Since the source cost must be amortized over the life of the sources, CMS expects that hospitals would project the number of treatments that would be provided over the life of the source and establish their charges accordingly.

Regina Magnani, RHIT
Clinical/Technical Editor


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