Report from SNM: Society protests Medicare reimbursement policies

June 18, 2008

Society of Nuclear Medicine officials say the Centers for Medicare and Medicaid Services is manipulating the definition of radiopharmaceuticals to artificially deflate its payment rates for radioactive imaging agents essential to nuclear and molecular imaging practice.

Society of Nuclear Medicine officials say the Centers for Medicare and Medicaid Services is manipulating the definition of radiopharmaceuticals to artificially deflate its payment rates for radioactive imaging agents essential to nuclear and molecular imaging practice.SNM opposition to the CMS practices, announced Tuesday at the society's annual meeting in New Orleans, revolves around fees paid by Medicare's Hospital Outpatient Prospective Payment System. The HOPPS schedule implemented in January for the first time bundled the cost of radiopharmaceutical drugs into a single fee covering the technical cost of performing nuclear medicine exams.CMS promised publicly at the time that bundled reimbursement would not translate into lower payments. Incoming SMN president Robert Atcher, Ph.D., however, noted in a press conference that Medicare has misclassified terminology defining radiopharmaceuticals to artificially depress their reimbursement rates."Although managed care (companies) label them as drugs or biologics, and HOPPS specifically defines them as drugs, CMS has twice reclassified radiopharmaceuticals as 'tests,' 'therapies,' or, more recently, 'supplies' in the same categories as band-aids or x-ray film," he said. The tactic has led CMS to establish rates for radiopharmaceutical products that are sometimes less than half the costs of producing them, Atcher said. He noted that Medicare reimbursement for radioimmunotherapies such as Bexxar and Zevalin, for treatment of non-Hodgkins lymphoma, is so low that it discourages hospitals and physicians from performing the procedures."As we develop new therapeutic radiopharmaceuticals that have the potential to dramatically change disease outcomes, we need to ensure that they will be adequately reimbursed in order to be effectively utilized," he said.

The SNM made four recommendations to CMS address the issue:

  • All radiopharmaceuticals should be recognized and treated as drugs, not supplies.
  • CMS should adopt a reimbursement model for radiopharmaceuticals that is comparable to the formula used to determine payments for other drugs.
  • All radiopharmaceuticals should qualify for the same bundling threshold in 2008 ($60) as all other drugs.
  • CMS should accept and use external data sources to identify and appropriately reimburse radiopharmaceuticals under HOPPS, as the agency does for all other drugs.

The SNM has compiled extensive data on the financial effects of Medicare bundling policy, according to Dr. Alexander J. McEwan, immediate past president. The society's evaluation indicates Medicare policy threatens the next generation of molecularly targeted radiopharmaceuticals. CMS has badly underestimated the cost of at least 15 radiopharmaceutical agents in addition to Bexxar and Zevalin.

"The CMS data are clearly badly flawed, particularly when it comes to low-volume, high-cost agents, where there is a significant impact on the availability of these pharmaceuticals," he said. For more information from the Diagnostic Imaging archives:

Medicare payment changes take a bite out of IR and molecular imaging

Medicare bundling proposal raises concern