Medicare Outpatient Payments: Rates for Certain Radioactive Sources Used in Brachytherapy Could Be Set Prospectively
Highlights
Generally, in paying for hospital outpatient procedures, Medicare makes prospectively set payments that are intended to cover the costs of all items and services delivered with the procedure. Medicare pays separately for some technologies that are too new to be represented in the claims data used to set rates. It also pays separately for certain technologies that are not new, such as radioactive sources used in brachytherapy, a cancer treatment. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 required separate payment for the radioactive sources. It also directed GAO to make recommendations regarding future payment. GAO examined (1) how Medicare determines payment amounts for technologies that are not new but are separately paid and (2) how payment amounts for iodine, palladium, and iridium sources used in brachytherapy could be determined.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Health and Human Services | In order to promote the efficient delivery of radioactive sources associated with outpatient brachytherapy, the Secretary of Health and Human Services should direct the Administrator of CMS to set prospective payment rates for iodine and palladium sources with each rate based on the source's average--that is, the mean or median--unit cost across hospitals estimated from OPPS claims data. |
Closed – Implemented
CMS agreed with this recommendation and drew upon GAO's analysis to propose and then finalize prospective rates for calendar year (CY) 2007 and CY 2008 for all brachytherapy sources, including iodine and palladium, based on the respective sources' median costs. The CY 2008 outpatient prospective payment system (OPPS) final rule cited GAO's analysis and recommendations. However, Congress delayed the implementation of prospective rates for brachytherapy sources through December 31, 2009. In its CY 2010 OPPS final rule, CMS announced that, starting January 1, 2010, it would pay for brachytherapy sources, including iodine and palladium, prospectively based on CY 2008 median costs from historical hospital claims. Per the final rule, the prospective rates went into effect on January 1, 2010.
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| Department of Health and Human Services | In order to promote the efficient delivery of radioactive sources associated with outpatient brachytherapy, the Secretary of Health and Human Services should direct the Administrator of CMS to use claims data to evaluate the unit cost of iridium so that a suitable, separate payment methodology can be determined. |
Closed – Implemented
CMS agreed with this recommendation and drew upon GAO's analysis to propose and then finalize prospective rates for calendar year (CY) 2007 and CY 2008 for all brachytherapy sources, including iridium, based on the respective sources' median costs. The CY 2008 outpatient prospective payment system (OPPS) final rule cited GAO's analysis and recommendations. However, Congress delayed the implementation of prospective rates for brachytherapy sources through December 31, 2009. In its CY 2010 OPPS final rule, CMS announced that, starting January 1, 2010, it would pay for brachytherapy sources, including iridium, prospectively based on CY 2008 median costs from historical hospital claims. Per the final rule, the prospective rates went into effect on January 1, 2010.
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