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New House bill calls for change in CMS definition of radiopharmaceuticals

by John R. Fischer, Senior Reporter | October 04, 2018
Molecular Imaging
Congress to evaluate bill to reclassify
radiopharmaceuticals in Medicare
outpatient-based settings
A new bill is calling for CMS to recognize diagnostic radiopharmaceuticals as drugs under the Medicare Hospital Outpatient Prospective Payment System, to spare hospitals the financial burdens associated with their current classification as supplies.

Introduced late last month by congressmen George Holding (R.-NC) and Seth Moulton (D.-MA) in the U.S. House of Representatives, the Medicare Diagnostic Radiopharmaceutical Payment Equity Act of 2018 seeks to change the status of radiopharmaceuticals so that they may be paid for separately in Medicare hospital outpatient settings rather than as bundled payments.

“Supplies are considered ancillary to a procedure in the Medicare hospital outpatient setting, and therefore payment is packaged into the payment for the scan,” Patrick Hope, executive director of the Medical Imaging & Technology Alliance (MITA), told HCB News. “The current CMS averaging system packages lower-volume, higher-cost diagnostic radiopharmaceuticals with other higher-volume, lower-cost drugs. In some instances, the cost of the diagnostic radiopharmaceutical exceeds the entire packaged amount of reimbursement, creating the potential for hospitals to lose money every time they perform the procedure.”

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As a result of these difficulties, many small providers are hesitant to perform certain exams, such as an Octreoscan procedure to visualize hormone-producing tumors in the nervous and endocrine systems. The cost of this procedure ranges from $1,200 to 1,400 with reimbursement nowhere near that amount, causing patients in need of it to seek help from bigger, far away facilities.

In addition, including radiopharmaceuticals as a bundled payment also deters research and innovation, with companies less inclined to spend money on development for such compounds due to providers unwilling to purchase them.

Hope says the passage of H.R. 6948 would open up access for patients to necessary diagnostic exams for a variety of diseases, including cancer, neurologic, and cardiac conditions, improving diagnostic accuracy and enabling physicians to develop treatments that avoid unnecessary procedures.

He also points out that doing so would eliminate inconsistencies in CMS’ definition of diagnostic radiopharmaceuticals, which depends on the site of care, with freestanding, non-hospital based imaging centers recognizing them as drugs and paid for as such by CMS, in contrast to hospital-based outpatient settings.

“These drugs go through the rigor of the FDA approval process and should therefore be considered the same as other drugs,” he said, adding that the FDA regulates radiopharmaceuticals as drugs. “Paying separately at a $500 drug threshold will provide more appropriate reimbursement, ensure patients have access to vital diagnostic tests, and allow for continued innovation in molecular imaging.”

Whether or not the bill will pass in the coming months is “hard to say”, according to Hope, due to the end of the year approaching and “uncertainty” over the outcome of the midterm elections.

MITA, however, plans to work with other stakeholders to ensure the bill does become law.

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