HCFA signals policy change for coincidence cameras

April 25, 2001

The paths to Medicare reimbursement for dedicated PET and coincidence cameras have diverged and there appears to be no hope of reuniting them.As of July 1, Medicare will reimburse users of dedicated PET scanners for the diagnosis, staging, and restaging

The paths to Medicare reimbursement for dedicated PET and coincidence cameras have diverged and there appears to be no hope of reuniting them.

As of July 1, Medicare will reimburse users of dedicated PET scanners for the diagnosis, staging, and restaging of six types of cancer: lung, colorectal, lymphoma, melanoma, esophageal, and head and neck (exclusive of cancers involving the brain or thyroid). The agency will not reimburse users of coincidence cameras for the same studies, pending the Health Care Financing Administration’s development of a performance standard for these cameras.

Because third-party payers, many of which are contractors to Medicare, usually mimic HCFA policy in making their own coverage decisions, this action affects a wide customer base and places the future of positron imaging at risk.

The outcome will have an impact on the appeal of coincidence cameras that are capable of positron imaging. It also raises the possibility that PET policy changes implemented by HCFA, which runs the Medicare program, could signal a change in how Medicare reimburses examinations that use other diagnostic imaging equipment.

In policy issued Dec. 15, HCFA grouped dedicated bismuth germanate (BGO) PET scanners together with coincidence cameras that have a 1-inch crystal. The policy called for reimbursement of both types of positron technologies. An April 10 memorandum to intermediaries and carriers, however, called into question the inclusion of these cameras for the extended coverage.

“For indications covered beginning July 1, 2001, scans performed with dedicated full-ring scanners will be covered,” HCFA stated. “However, coverage of PET using camera-based systems is now under further review as a separate national coverage determination.”

Following this memorandum, HCFA distributed a tracking sheet on April 13, explaining that the agency has issued an internal formal coverage request to examine the comparative performance of all system types approved for marketing by the FDA as PET scanners.

“This request will allow us to develop a uniform and appropriate quality standard for imaging systems that will be eligible for Medicare reimbursement for all covered uses of FDG-PET,” the tracking sheet stated.

The performance standard will be used in place of design specifications-specifically, crystal thickness-that the original policy attempted to use as a means for differentiating a “quality cut-off.” A final decision on which systems other than dedicated PET scanners will be eligible for expanded coverage will be announced prior to July 1, according to HCFA. That is the date on which additional Medicare coverage for positron imaging is to go into effect.

“Where things stand with full-ring dedicated PET is absolutely crystal clear,” said Steve Atkinson, chair of the industry council, which is part of the Academy of Molecular Imaging. “The situation with camera PET is very fluid and will continue to evolve.”

Coincidence cameras have thus entered a kind of limbo and their ticket out is the performance standard under development by HCFA. That standard could ultimately afford Medicare reimbursement to many cameras, according to Atkinson.

“All HCFA is saying is that camera systems are sufficiently different in design and performance from full-ring dedicated PET scanners that (HCFA) has decided to issue an entirely separate coverage policy document that they will follow with an entirely separate implementation manual compared to dedicated PET,” he said. “The real significance of the April 10 memorandum is that dedicated PET and camera PET are no longer on the same pathway, and we don’t yet know which camera systems are covered for the expanded Medicare indications.”

HCFA has stated, however, that for indications covered prior to July 1, all PET scanners, including coincidence cameras, approved or cleared for marketing by the FDA will remain covered. In other words, the use of both dedicated PET scanners and coincidence cameras will be covered for certain narrow indications, such as diagnosis of single pulmonary nodules or recurrent colon cancer indicated by a rising carcinoembryonic antigen level.

On the surface, the wrangling might appear to be a minor scuffle. HCFA is not rescinding coverage previously awarded to coincidence cameras; the issue involves only expanded uses of PET. Further, HCFA’s second look at PET has led to a simplification of the claims process that physicians must follow. Gone are the modifiers HCFA previously required, as well as the paper documentation needed for PET scan claims. G-codes were also announced to cover the expanded indications.

Much of the uncertainty that remains could soon disappear. HCFA has indicated its intent to complete its fact-finding efforts by mid-May and to announce a performance standard soon afterwards, presumably before the July 1 implementation date for new Medicare coverage.

“It is probably a reasonable approach,” said Wayne Webster, vice president of sales, marketing, and service at Positron. “They are asking ‘What level of performance is acceptable for a PET scanner?’”

But this question worries some industry executives. They are concerned about the market for coincidence cameras and even more concerned that HCFA policies regarding other modalities might change. Some fear that a decision against coincidence cameras could affect the practice of medicine.

“The risk here is that maybe an important clinical tool that is very cost-effective will essentially be taken away because of lack of reimbursement,” said Randy Weatherhead, vice president of marketing for the nuclear medicine group of Siemens Medical Solutions.

And coincidence cameras might be only the beginning. No performance standard has been proposed for PET scanners, but the standard for coincidence cameras could be a first step in that direction. The worst-case scenario would involve HCFA developing performance standards for other areas of diagnostic imaging.

The industry is replete with equipment designed to deliver different levels of performance. Ultrasound scanners range from black and white to super-premium systems; CT has single-slice nonspiral, spiral, and multislice spiral units; MRI scanners run the gamut from 0.23-tesla opens to 3-, 4-, and even 7-tesla products. There’s also digital and film-based radiography, mammography, and fluoroscopy systems. What if HCFA starts splitting technological hairs over which of these should be reimbursed?

“The PET performance standard for coincidence cameras sets a very uncomfortable precedent that unfortunately could be applied in other areas,” Atkinson said. “It could be very challenging in a lot of areas of diagnostic imaging.”

New equipment might also be subject to standards. Any product navigating FDA review will be vulnerable if HCFA sets a precedent by differentiating between full-ring and “partial” ring coincidence cameras.

“A manufacturer could undergo all the normal development costs, overcome the FDA’s hurdles, and still have uncertainty as to whether it would overcome the HCFA hurdle,” said Atkinson, who is also director of oncology marketing at ADAC Laboratories. “You could go through all the necessary steps and end up with a product nobody wants to buy because it isn’t reimbursed.”

Speculation abounds that HCFA’s interest in developing a performance standard for coincidence scanners is an attempt to keep the lid on Medicare costs by limiting the number of sites that qualify for expanded coverage. Opponents of that theory contend that HCFA could have achieved the same end more effectively by declining to expand coverage to the additional areas noted in the December policy statement. Supporters of the idea respond that HCFA’s change in policy regarding coincidence cameras is a face-saving effort to contain the damage done by overzealous administrators who prematurely took the wraps off positron imaging.

The silver lining in the whole affair is the effect it could have on dedicated PET. A reimbursement decision excluding coincidence cameras from positron imaging would boost interest in full-ring systems, according to Weatherhead.

“If there is a difference from a reimbursement standpoint between coincidence and PET, it will force the marketplace toward dedicated PET systems,” he said.

Aside from the near certainty that prospects for dedicated PET scanners are looking up, few other consolations are apparent. The coincidence camera market is on stand-by until further notice.