New HOPPS rates bring PET reimbursement hike

By Erik L. Ridley, staff writer

March 4, 2002 --

A dark cloud covering the PET marketplace may be clearing: As part of the final 2002 Medicare reimbursement rates for hospital outpatient departments announced Thursday, the Centers for Medicare and Medicaid Services (CMS) has raised coverage for FDG-PET procedures from $1,375 to $1,850.

While keeping FDG-PET at its previously announced reimbursement level of $1,375, CMS has added separate coverage for FDG at $475 (APC 1775), effectively raising reimbursement to $1,850. Although still lower than 2001 reimbursement of $2,331.18, the new FDG-PET rate marks a 34.5% improvement over the 2002 rate of $1,375 announced in November.

On December 31, CMS had delayed implementation of its 2002 hospital outpatient prospective payment system (HOPPS), pending a review of all 394 procedure APCs. CMS officials were unavailable to comment specifically on the decision to increase PET reimbursement, and did not provide any discussion of the change along with the new rates, which are effective April 1.

In any event, PET advocates generally reacted positively to the decision. CMS' earlier proposed rates for 2002 had sparked widespread criticism and concern over the impact on the marketplace.

"We're pleased they increased the rate," said William Uffelman, general counsel and director of public affairs for the Reston, VA-based Society of Nuclear Medicine. "While it's less than 2001, the impact will be substantially less than the devastating rate proposed back in August."

The new rates are also more in line with a University of Southern California (USC) PET cost analysis sponsored by the National Science Foundation (American Journal of Roentgenology, July 2001, Vol.177:1, pp. 31-40), said Dr. Peter Conti, director of the PET Imaging Science Center at USC in Los Angeles.

"This will stabilize the market, allowing more companies to enter as well as provide PET sites a reasonable reimbursement rate so as to justify the investment in this imaging technology," Conti said.

Although the rate has improved, it still needs to move closer to the cost of PET, however, said Ruth Tesar, executive director for Northern California PET Imaging Center in Sacramento.

"The cost per procedure is higher than $1,850 for most PET centers that have recently been established," she said.

The Academy of Molecular Imaging is pleased not only with the decision, but with the level of collaboration provided by CMS, said AMI president Dr. Michael Phelps. AMI had collected financial information from a large representative sample from its members, and performed a financial analysis with help from an accounting firm. This data was presented to CMS, Phelps said.

"The initial announcement of a cut in the reimbursement rate by more than a factor of two destabilized hospitals and medical professions interested in providing the benefit of PET imaging of the biology of disease to their patients during this time of PET's growing entry into the healthcare system," Phelps told "The new coverage rate will allow medicine to focus on the benefit of PET for their patients."

AMI said that it would continue to work with CMS alongside organizations such as the Society of Nuclear Medicine, the American College of Radiology, medical specialty groups, National Institutes of Health, and advocacy groups.

As increased utilization and new coverage for applications is added, AMI believes the cost situation will improve, Phelps said. Currently, PET sites perform an average of 2.7 studies per day, he said.

"Providing PET to the CMS beneficiaries is the right thing to do and increasing utilization will evidentially drive down costs," Phelps said.

Despite the incremental decline compared with 2001 levels, the new increase does add luster to an already brightening reimbursement environment for PET procedures. In recent weeks, CMS has added Medicare coverage for determining myocardial viability in patients with ischemic heart disease and as an adjunct to other imaging modalities in breast cancer applications. CMS is also reviewing coverage for thyroid cancer and soft tissue sarcoma, as well as Alzheimer's disease.

By Erik L. Ridley staff writer
March 4, 2002

Related Reading

CMS expands PET coverage to breast cancer patients, February 28, 2002

CMS expands PET reimbursement, February 20, 2002

U.S. gives thumbs-down on PET for Alzheimer's, January 11, 2002

CMS tackles FDG-PET reimbursement for Alzheimer’s, January 10, 2002

PET scanning plus new molecular probe detects early Alzheimer's disease in vivo, January 10, 2002

Copyright © 2002


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