ASTRO asks Medicare to stop cuts in payments for radiation therapy

Agency plans reductions based on 90% utilization rates for radiation therapy equipment.

Based on a review utilization survey of diagnostic imaging equipment, the Centers for Medicare and Medicaid Services has recommended boosting estimated utilization rates for radiation therapy equipment from 50% to 90%. According to the American Society for Radiation Oncology, the change would harm freestanding radiation therapy centers.

In a press release, ASTRO said that the survey, conducted by the Medicare Payment Advisory Commission (MedPAC), only looked at utilization rates for MRI and CT scanners, and that data do not apply to radiation therapy equipment.

“Our argument is that, without data, it’s difficult to draw the conclusion that the utilization rate should be changed,” said Patricia Eifel, MD, president of ASTRO and a professor of radiation oncology at M.D. Anderson Cancer Center. “The impact could be profound, particularly on freestanding facilities.”

To determine a machine’s cost per minute, CMS used a formula to spread the purchase price of a piece of equipment over the number of minutes it is projected to be used during its useful life, taking into account factors such as the cost of capital and maintenance. The agency then multiplies cost per minute by the number of minutes the equipment is in use.

The agency currently assumes that the average facility is open 50 hours per week and that radiation therapy equipment is in use for 25 hours per week, or 50% of the time.

“However, if machines are used more frequently, their fixed costs are spread across more units of service, resulting in a lower cost per service,” the agency says. “In this instance, such equipment would be overvalued by CMS.”

Based on the assumption that CT and MRI machines are in use 45 hours per week, CMS has proposed increasing the equipment use rate to 90% for both diagnostic imaging and radiation therapy equipment costing more than $1 million. However, a study conducted by dmrkynetec on ASTRO’s behalf showed that radiation therapy equipment is in use, on average, between 40% and 60% of the time.

“MedPac’s recommendation to raise the assumed rate was specifically targeted at diagnostic imaging equipment,” said Dave Adler, ASTRO’s assistant director of government relations. “What we fear is that CMS misapplied that recommendation and they are proposing to increase the rate not just on imaging equipment, but on radiation therapy equipment as well. They did not use any sort of real data on how often radiation therapy equipment is being used as a basis for that recommendation; they relied solely on the MedPAC recommendation.”

In a letter to acting CMS administrator Charlene Frizzera, MedPAC supported increasing the use rate for diagnostic imaging machines, and recommended looking at increasing the rate for equipment costing less than $1 million as well, but said the new use rate should be limited only to diagnostic imaging machines.

“MedPAC did not contemplate applying this policy to radiation therapy machines,” the letter said. – by Jason Harris