Coalition For The Advancement Of Brachytherapy 660 Pennsylvania Avenue, S.E. Suite 201 Washington, D.C. 20003 (202) 548-2307 Fax: (202) 547-4658

Coalition For The Advancement Of Brachytherapy 660 Pennsylvania Avenue, S.E. Suite 201 Washington, D.C. 20003 (202) 548-2307 Fax: (202) 547-4658 September 25, 2002 The Honorable Thomas A. Scully Administrator Centers for Medicare and Medicaid Services Department of Health and Human Services ATTN: CMS-1471-P Room 445-G Hubert H. Humphrey Bldg. 200 Independence Avenue, S.W. Washington, DC 20201 Re: Comments on August 12, 2003 Proposed Rule on HOPPS and Brachytherapy; CMS-1471-P Dear Mr. Scully: The Coalition for the Advancement of Brachytherapy (CAB)1 is pleased to submit these comments to the Centers for Medicare and Medicaid Services (CMS) in response to the August 12, 2003 Federal Register proposed rule on the Hospital Outpatient Prospective Payment System (HOPPS) (see attachment 1). Executive Summary and Recommendations We would like to thank CMS for the opportunity to meet with staff during the past several years to explore how refinements can be made for brachytherapy payment under HOPPS. CMS has made significant changes in brachytherapy APCs but further revisions are essential to ensure appropriate payment to hospitals and meaningful access to high quality cancer treatment care for Medicare patients. 1 The Coalition for the Advancement of Brachytherapy (CAB) was organized in early 2001 as a coalition composed of the leading developers, manufacturers, and suppliers of brachytherapy devices, sources, and supplies. CAB's mission is to work for improved patient care by assisting federal and state agencies in developing reimbursement and regulatory policies to accurately reflect the important clinical benefits of brachytherapy. Such reimbursement policies will support high quality and cost-effective care. 1

The Coalition for the Advancement of Brachytherapy appreciates this opportunity to submit comments to CMS on Medicare HOPPS brachytherapy issues. Our recommendations are summarized below. CAB recommends that CMS review the claims data used to package appropriate costs into APC 313 Brachytherapy to ensure that the reasonable cost of the HDR Iridium-192 (C1717) source was packaged into every procedure code, as well as multiple catheters/needles (C1728/C1715). We request that CMS select the claims that accurately reflect the source and device costs and delete the claims that do not, and revise the final payment rate for 2004 to reflect the appropriate cost of devices packaged into the procedure. CAB recommends that CMS issue a Medicare Program Memorandum instructing providers to report the cost of the HDR source and brachytherapy catheters and needles in the hospital procedure charge. We request that CMS also instruct providers to report all HDR procedures and related procedures by date of service. CAB recommends, as it has in the past, that Medicare reimburse the Iodine-125 and Palladium-103 brachytherapy sources for prostate cancer on a per seed basis reflecting the hospital s costs for the number, type and radioactive intensity of the brachytherapy sources used to treat each individual patient. Billing brachytherapy sources separately would allow CMS to once again accurately track source usage and cost, at the same time, increasing the number of correctly coded claims. CAB recommends that CMS eliminate the two (2) prostate brachytherapy G codes (G0256 and G0261) and their related APCs 649 and 684, and revert to its previous policy to allow hospitals to bill the prostate brachytherapy procedure with CPT procedure codes 55859 (APC 163) and 77778 (APC 651) separately. CAB does not oppose packaging the costs of brachytherapy needles (C1715) and catheters (C1728) into their related brachytherapy procedures. CAB remains concerned, however, that the actual costs of these products have not been accurately captured anywhere, and the real costs of these devices are not incorporated into any of the brachytherapyrelated APCs. 2

CAB recommends that CMS review the claims data for APC 312 Radioelement Application and APC 651 Complex Interstitial Radiation Source Application and ensure that the reasonable costs of multiple brachytherapy needles/catheters were packaged into each procedure code. We request that CMS select the data that accurately reflects the device costs and delete the claims that do not, and revise the final payment rate for 2004 to reflect the appropriate cost of devices packaged into the procedure. CAB supports permanent, separately payable APCs for all brachytherapy sources, but the current payment structure and amounts are inadequate and must be corrected. CAB recommends that CMS establish two (2) new permanent, separate brachytherapy source APCs for High Activity Iodine-125 and High Activity Palladium-103 sources. The sources should be paid separately on a per source, per patient basis, in addition to the procedure code. CAB recommends that CMS consider pass-through or new technology status for new devices for brachytherapy catheters and needles that are FDA approved for new indications and treatment protocols. CAB recommends that CMS exempt any device portion of an APC rate from the wage index adjustment. CAB recommends that CMS apply a dampening adjustment to all APCs and limit the reduction in payment from 2003 to 2004 rates. CAB recommends that CMS consider the best external data available in constructing final 2004 APC rates, including confidential data, to determine median cost calculations. CAB recommends that CMS continue its efforts to use only correctly coded claims for device-related APCs where each claim must contain the relevant device code(s). Nonetheless, CAB continues to have significant concerns regarding the accuracy of CMS brachytherapy data. 3

High Dose Rate Brachytherapy (APC 313) CAB recommends that CMS review the claims data used to package appropriate costs into APC 313 Brachytherapy to ensure that the reasonable cost of the HDR Iridium-192 (C1717) source was packaged into every procedure code, as well as multiple catheters/needles (C1728/C1715). We request that CMS select the claims that accurately reflect the source and device costs and delete the claims that do not, and revise the final payment rate for 2004 to reflect the appropriate cost of devices packaged into the procedure. In addition, CAB recommends that CMS issue a Medicare Program Memorandum instructing providers to report the cost of the HDR source and brachytherapy catheters and needles in the hospital procedure charge. We request that CMS also instruct providers to report all HDR procedures and related procedures by date of service. CMS recently proposed to continue its 2003 policy of packaging the device costs associated with the High Dose Rate (HDR) Iridium-192 source and brachytherapy catheters/needles into APC 313 Brachytherapy. APC 313 includes the four (4) Remote Afterloading High Dose Rate Brachytherapy codes (CPT 77781-77784) and the Unlisted Clinical Brachytherapy procedure code (CPT 77799). The four (4) Remote Afterloading High Dose Rate Brachytherapy codes (CPT 77781-77784) are differentiated by the number of source positions or catheters used during the procedure. A High Dose Rate Iridium-192 source (C1717) is required for each Remote Afterloading Brachytherapy procedure. A varying number of brachytherapy catheters/needles (C1728 & C1715) are required for each procedure based on medical necessity and treatment plan. Analysis of hospital claims data from April 1 through December 31, 2002 indicate that 102 different diagnoses are indicated for treatment with HDR brachytherapy. Each HDR treatment protocol is unique and requires the use of a variable number and type of brachytherapy catheters and needles. Hospital outpatient claims data vary significantly for each patient treated with HDR Brachytherapy. The number and cost of catheters/needles differs based on the type of procedure, size and type of tumor, and type of catheters used. The time and effort for the procedure is often proportional to the number of catheters required for each patient. The 2004 proposed payment rate for Remote Afterloading High Dose Rate (HDR) Brachytherapy APC 313 does not include the reasonable costs of the HDR Iridium-192 source and the related brachytherapy catheters/needles. 4

Since the beginning of HOPPS, there have been numerous changes in coding and assignments of the temporary device codes ( C codes) for related procedures. CAB and its member companies have conducted an analysis of the claims data and our findings reveal that hospital outpatient coding is often inaccurate and does not capture the cost of the HDR Iridium-192 source and the multiple units of brachytherapy catheters/needles required for each procedure. An external survey of providers conducted by two CAB member companies identified serious coding confusion regarding the use of temporary device codes and accurate cost assignment for the procedures in APC 313. A review of the 2002 hospital outpatient claims data indicates that the medical supply and device costs have not been captured in the majority of the single claims or pseudo-single claims used to determine the median cost and payment rate for APC 313. CMS used only 25% of the total claims that include CPT 77781-77784 to establish the proposed APC rate for 2004. This low number of claims did not include those correctly coded claims that accurately reported all associated C codes. Not only is there confusion among providers, but CMS has acknowledged the difficulty in using claims data to determine the appropriate cost for HDR brachytherapy. In the HOPPS proposed rule for 2003 (August 9, 2002 Federal Register) CMS stated that it is difficult if not impossible to determine a per treatment cost for the HDR source. APC 313 has a proposed reduction of 35% from a current payment of $1,097 to $712 in 2004, and a cumulative reduction of over 61% from 2002 to 2004. The reduction in payment is related to flawed claims data. CMS should establish a methodology to stabilize and prevent extreme and unwarranted payment reductions in this APC from year to year. Due to the fact that each claim for HDR includes multiple procedures and CMS has stated that accurate costs are impossible to determine, we request that CMS utilize a more appropriate claims filtering methodology to establish a payment rate that is specific to the unique requirements of HDR. CAB recommends that CMS only utilize correctly coded claims that include the primary procedure code (CPT 77781 77784) and one HDR source code (C1717) and at least one catheter or needle code (C1728 or C1715) to determine a more appropriate payment rate for APC 313 in 2004. 5

In addition, CAB recommends that CMS provide accurate coding instructions to hospitals that outline appropriate coding for the HDR brachytherapy procedure and reporting multiple procedures on the same date of service. CMS should also instruct hospitals to include the cost of related equipment, brachytherapy sources, supplies and brachytherapy catheters/needles in the primary procedure code. It is also necessary for CMS to require providers to report the date of service by line item on claims. This will permit CMS to more accurately utilize claims data to establish future payment rates for HDR brachytherapy procedures. Remote Afterloading High Dose Rate Brachytherapy offers important cancer therapies to Medicare patients and is the only treatment option for several indications. Appropriate payment for APC 313 will ensure that Medicare beneficiaries have full access to high quality cancer care in the hospital outpatient setting. If payment is reduced by 35%, many hospital outpatient facilities will not be able to continue providing this therapy and beneficiaries will be forced to travel further distances for treatment or pursue higher cost treatment alternatives, such as inpatient care. Prostate Brachytherapy (APCs 649 and 684) CAB recommends that Medicare separately code and reimburse the Iodine- 125 and Palladium-103 brachytherapy sources for prostate cancer on a per seed basis reflecting the hospital s cost for the number, type and radioactive intensity of the brachytherapy sources used to treat each individual patient. Billing brachytherapy sources separately would allow CMS to once again accurately track source usage and cost, at the same time, increasing the number of correctly coded claims. CAB s recommendation is consistent with the APC Advisory Panel s August 22, 2003 general recommendation to CMS to unbundle the prostate brachytherapy sources. CAB continues to support its longstanding policy that CMS should not package prostate brachytherapy sources into procedure APCs. Prostate brachytherapy is different from most other clinical interventions because of the dramatic variability in the type, number and radioactive intensity of brachytherapy sources that are required to treat each patient. This variability is due to differences in the type, staging and size of the prostate cancer that afflicts different patients. This variability also results in a broad range in costs per patient for the necessary brachytherapy sources (also called seeds ), which depending on the clinical requirements can range from $2,000 to $10,000 per patient. 6

Packaging brachytherapy sources, needles and catheters in the current prostate brachytherapy G codes (G0256 and G0261) fails to recognize the wide variability of costs. One problem with this is that APCs must meet basic statutory standards of clinical and resource homogeneity. The current APCs for prostate brachytherapy, however, fail the resource homogeneity test. CAB also continues to have significant concerns regarding the accuracy of CMS s existing data for prostate brachytherapy. For example, the number of sources per patient that CMS reported in 2002 is exceptionally low in comparison to what would be expected from a clinical perspective. The poor quality of CMS data is further reinforced by the fact that the payment levels for the existing codes are too low. As discussed above, the degree of clinical variability among patients receiving prostate brachytherapy is unique in comparison to other procedures, and this significant variability appears to be related directly to problems with CMS data in this area. Finally, with respect to the issue of cost variability, it is worth noting that for 2004, CMS has again proposed to continue separate payment for blood, blood products and some outpatient drugs. There is a fundamental inconsistency in CMS logic because prostate brachytherapy sources for a single patient always cost more than the $150 threshold applied by CMS to determine whether to package or pay separately for drugs. In addition, there typically is much greater variability in radioactive source costs among patients treated with prostate brachytherapy than among patients treated with drugs that merely exceed $150 per administration. CAB also recommends that CMS eliminate the two (2) prostate brachytherapy G codes (G0256 and G0261) and their related APCs 649 and 684, and revert to its previous policy to allow hospitals to bill the prostate brachytherapy procedure with CPT procedure codes 55859 (APC 163) and 77778 (APC 651) separately. CAB s recommendation is consistent with the APC Advisory Panel s August 22, 2003 recommendation to CMS to unbundle the prostate brachytherapy procedure codes. CMS is proposing to continue its new 2003 policy to package two (2) procedure codes (CPT 55859 a urology code and CPT 77778 a radiation oncology code) with the brachytherapy sources (seeds) and needles/catheters, into 2 APCs specific to the radioactive source utilized: APC 649 Prostate Brachytherapy with Palladium-103 and APC 684 Prostate Brachytherapy with Iodine-125. Prostate brachytherapy is the only medical procedure under the Hospital Outpatient Prospective Payment System that packages two (2) procedure codes (55859 and 77778) and all medical devices (including sources and needles/catheters) into the APC payment. CAB is not clear why prostate brachytherapy was singled out and subjected to a policy that is not applied to any other medical procedure performed in the hospital outpatient setting. 7

CAB does not oppose packaging the costs of brachytherapy needles (C1715) and catheters (C1728) into their related brachytherapy procedures, because the per patient costs are significantly less variable than the per patient costs of radioactive sources. CAB remains concerned, however, that the actual costs of these products have not been accurately captured in CMS data and the real costs of these devices have not been incorporated into any of the other brachytherapy-related APCs. Furthermore, as explained below, the creation of two new HCPCS G codes in 2003 for prostate brachytherapy has created an administrative burden for hospitals. The creation of the G codes will prevent CMS from capturing the total costs associated with prostate brachytherapy in the future. More specifically, we have been told by numerous hospital administrators that the creation of the new prostate brachytherapy G codes has created additional confusion in assigning revenue codes to this procedure and has resulted in some Medicare carriers denying prostate brachytherapy claims. CPT 55859, which is a urological surgery code (Transperineal placement of needles or catheters into prostate for interstitial radioelement application, with or without cystoscopy), is assigned to revenue code 360 for Operating Room Services-General Classification. CPT 77778, which is a radiation oncology code (Interstitial radiation source application; complex), is assigned to revenue code 333 for Radiology-Therapeutic Radiation Therapy. Both of these procedure codes are packaged into one prostate brachytherapy G code and hospitals must choose only one of the two revenue codes to enter on the Medicare claim. We understand that some Medicare carriers require one revenue code over another and have denied hospital claims if the unexpected revenue code is submitted on the claim. Many hospitals have included only the total costs associated with one revenue code when they establish their charges for the procedure. Therefore, the total costs of the procedure may not be captured in the 2003 hospital claims data, which will affect the HOPPS 2005 payment rates. Additionally, this problem may make it impossible for the hospitals to reconcile their cost report on a department level because the costs of a single procedure are incurred by two separate departments (revenue centers), yet the charges for the procedure can only be placed in one revenue center. Clearly the creation of the new G codes has created an administrative burden for hospitals from a charging/cost reporting perspective. This burden is compounded by the fact that virtually every private payer requires the continued use of conventional Level I CPT codes (55859 & 77778) rather than the G codes. Thus, Medicare s implementation of the G Codes is inconsistent with the overarching efforts to collect accurate data for Medicare and to promote uniformity in coding under HIPAA and otherwise. 8

An administrative burden also has been placed on the commercial secondary Medigap payors, as the information provided to the secondary payor on the primary payment of the G codes by Medicare is inconsistent with their adjudication software. This causes incorrect payment or denial of payment, which in turn, places a burden upon the Medicare beneficiary. In sum, CMS should reflect the tremendous resource variability among prostate brachytherapy patients and be consistent in its payment policy by allowing prostate brachytherapy sources to be billed separately on a per seed, per case basis. Further, CMS should eliminate the two prostate brachytherapy G codes and allow hospitals to bill the conventional CPT codes for this procedure. Bundling prostate brachytherapy sources may adversely alter clinical practice and impair Medicare beneficiaries access to this important cancer treatment. Improper payment may encourage the use of fewer sources per case or shift care to other alternatives, such as invasive radical prostatectomy surgery requiring inpatient care, which may result in less effective treatment and/or serious complications or side effects, as well as increased costs to Medicare. Medicare payment policy should not limit access to care or discourage the provision of appropriate patient care. Low Dose Rate Brachytherapy, Non-Prostate (APCs 312 and 651) CAB recommends that CMS review the claims data for APC 312 Radioelement Application and APC 651 Complex Interstitial Radiation Source Application and ensure that the reasonable costs of multiple brachytherapy needles/catheters were packaged into each procedure code. We request that CMS select the data that accurately reflects the device costs and delete the claims that do not, revising the final payment rate for 2004 to reflect the appropriate cost of devices packaged into the procedure. CMS has established two APCs that include Low Dose Rate (LDR) Brachytherapy procedure codes for all Intracavitary and Interstitial brachytherapy, excluding prostate brachytherapy. The brachytherapy needles/catheters (C1715/C1728) have been packaged into the APC payment. APC 312 includes the three (3) Intracavitary brachytherapy codes (CPT 77761-77763) and two (2) Interstitial brachytherapy codes (CPT 77776-77777). APC 651 includes one (1) Interstitial brachytherapy code (CPT 77778) that is considered complex as it utilizes 10 or more sources for each procedure. It is important to note that in 2002 CPT code 77778 was used to code for prostate brachytherapy, a high volume cancer therapy, as well as other complex interstitial brachytherapy procedures that utilize more than 10 sources per procedure. 9

The Intracavitary and Interstitial Low Dose Rate Brachytherapy codes are differentiated by the number of sources used during the procedure: simple 1-4 sources; intermediate 5-10 sources; complex greater than 10 sources. The brachytherapy sources are paid separately on a per source basis. For 2004, CMS proposes to reduce reimbursement for APC 312 (CPT 77761-77763 and 77776-77777) 93% from the 2003 rate of $2,758 to $200. APC 651 (CPT code 77778) reimbursement decreases 81% from the 2003 rate of $2,853 to $545. The two-year cumulative effect is even more severe with 97% and 91% reductions in proposed 2004 payment, respectively. CMS must establish a methodology to stabilize payment rates from year to year. For example, GliaSite is a low dose radiation therapy for the treatment of brain tumors. This procedure typically requires up to two hours of staff and facility time (3 staff involved in the procedure). A 93% reduction in this APC payment rate will prohibit hospitals from offering this therapy in the outpatient department and will drive treatment into the inpatient setting, which is more costly to the health care system. Although a large majority of these procedures are performed in the inpatient hospital setting, CAB believes that the reported frequency of the 2002 claims data for these APCs is low and did not likely capture additional multiple-claims data that should be used to determine the proposed payment rates. The 2004 proposed rate for APC 651 is based on 201 claims. The 2004 proposed rate for APC 312 is based on 139 claims for five (5) procedure codes. CMS used 139 "single procedure" claims for APC 312. This is just 21% of the total number of occurrences of these procedure codes for this APC in the HOPPS data file. Brachytherapy procedures are almost always billed with other APCs. The typical radiation oncology encounter involves multiple services over several weeks and sometimes months. It is likely that the majority of outpatient claims were excluded from the calculation of the 2004 proposed rates and the APC proposed rates are based on atypical encounters. In other words, the data likely represents services performed in small, relatively low-volume centers with minimal technological complexity and inappropriate costs and charges, which are not reflective of the norm. Additionally, a review of the 2002 median claims file demonstrates inconsistency across the intracavitary and interstitial codes; and the high coefficient of variation for all codes proves that the data is inaccurate. 10

Since the inception of HOPPS, the payment policies and rates have fluctuated dramatically from year to year. For APC 312, the payment has ranged from $205 when the brachytherapy sources and needles/catheters were paid on a passthrough basis in 2001; to $6,345 when 75% of medical devices were packaged in 2002; to $2,758 in 2003 when only the brachytherapy needles/catheters were packaged; to a 2004 proposed reimbursement of $200. The proposed rate is unreasonable and inadequate, and it does not begin to cover the outpatient facility costs. This rate will not even cover the costs of the brachytherapy needles/catheters alone. The proposed 2004 outpatient rates will likely drive all non-prostate Intracavitary and Interstitial Low Dose Rate Brachytherapy procedures into the inpatient hospital setting. This will not only increase the overall costs to the Medicare program, but it may severely affect patient access to this important cancer treatment. High Activity Brachytherapy Source Codes CAB supports permanent, separately payable APCs for all brachytherapy sources, but the current payment structure and amounts are inadequate and must be corrected. In addition, CAB recommends that CMS establish two (2) new permanent, separate brachytherapy source APCs for High Activity Iodine-125 and High Activity Palladium-103 sources. The sources should be paid on a per source, per patient basis, in addition to the procedure code. In its 2004 proposed rule, CMS continues its 2003 policy of providing separate payment for non-prostate brachytherapy sources on a per seed, per patient basis. In that regard, CMS established five (5) device C codes based on the radioactive isotope (C1716, C1718, C1719, C1720, C2616). While we commend CMS for establishing permanent, separate APCs for brachytherapy sources and appreciate CMS s recognition that brachytherapy sources vary based on the type, number and radioactive intensity of the sources used, the current payment structure and amounts assigned to the Iodine-125 and Palladium-103 non-prostate source codes are inadequate and must be corrected. In addition, two (2) new high activity codes are needed to cover the costs of High Activity Iodine-125 and Palladium-103 sources. 11

Previously, CMS created brachytherapy source codes for High Dose Rate Iridium-192 (C1717) and Non-High Dose Rate Iridium-192 (C1719) because it recognized the significant clinical and resource differences between the two products. As discussed below, the same is true with respect to Iodine-125 and Palladium-103. As such, we recommend that CMS add two (2) new codes for the High Activity Sources. C17XX Brachytherapy source, High Activity Iodine-125 C17XX Brachytherapy source, High Activity Palladium-103 Iodine-125 and Palladium-103 High Activity sources are used primarily as temporary implants. A common use of Iodine-125 High Activity sources is for collaborative ocular melanoma studies (COMS). High Activity Iodine-125 and Palladium-103 are the standard treatment protocol for eye plaque therapy in ocular melanoma. High Activity sources are also used as interstitial seeding for head and neck cancers, and in the treatment of residual brain tumors. High Activity sources often are used in smaller quantities with higher radiation intensity. The High Activity Iodine-125 sources are generally in the 1-3 mci range whereas the lower activity sources are approximately 0.4 mci. The High Activity Palladium-103 sources are in the 2.5-5 mci range of activity. The 2003 and 2004 proposed rates for Iodine-125 and Palladium-103 sources do not capture the costs of loose low dose seeds, much less those of High Activity Iodine or Palladium sources, which typically cost in excess of $150 per source. As such, CAB requests that CMS address these issues by adopting its recommendations, as set forth above. New Brachytherapy Technology CAB recommends that CMS consider pass-through or new technology status for new devices for brachytherapy catheters and needles that are FDA approved for new indications and treatment protocols. The brachytherapy needle (C1715) and catheter (C1728) pass-through codes expired December 31, 2002. CAB member companies have submitted and will continue to submit applications for pass-through or new technology status for new technology used to treat beneficiaries that was not available prior to January 1, 2003. If CMS considers every brachytherapy catheter and needle to be clinically equivalent, this will hinder the development of innovative technology that will permit more advanced treatment options, improve patient outcomes and may help to reduce cost of care. CAB recommends that CMS provide a mechanism for consideration of new devices of brachytherapy to assure continued beneficiary access to new, more cost effective cancer treatments. 12

Exemption of Device Costs from the Wage Index Adjustment CAB recommends that CMS exempt any device portion of an APC rate from the wage index adjustment. CMS is required to apply a wage adjustment factor to the portion of the HOPPS payment rate and copayment amount that is attributable to labor and laborrelated costs. For brachytherapy, the device costs are a significant portion of some APC payments. Packaging medical devices into the APC subjects the device costs to the wage index adjustment. The Medicare wage index adjustment is directly related to the labor costs in each geographical area in the country. The acquisition cost of the medical device that the hospitals pay is not based on labor costs for their specific geographic area. For example, the cost of the brachytherapy source is based on the type and radioactive intensity of the source, volume of the purchase, and group purchasing organizations. Making the device portion of the APC subject to the wage index adjustment greatly reduces the availability of the medical procedures in rural areas of America since their wage index is historically lower than urban areas. The portion of the APC attributable to the devices should be specified by CMS and should be exempted from the wage index, since device costs should not be subject to local wage variation. Dampening Adjustment CAB recommends that CMS apply a dampening adjustment to all APCs and limit the reduction in payment from 2003 to 2004 rates. CAB is very concerned that CMS did not continue its policy of stabilizing APC rates by protecting against significant cuts to APCs. Specifically, in the final rule governing 2003 payment, CMS established a dampening adjustment to virtually all APCs (except New Technology APCs). This adjustment was created to limit the impact of payment reductions from 2002 to 2003 rates. It was not, however, applied to the prostate brachytherapy APCs 649 or 684. In an attempt to receive clarification and an understanding as to why these APCs were not covered by the dampening adjustment, CAB sent correspondence to CMS on this issue several times and received no response. As such, these APC s are already significantly disadvantaged. 13

In the 2004 proposed rule, CMS continues to apply a dampening factor for separately payable drugs and radiopharmaceuticals whose 2004 median costs decrease by more than 15% from the 2003 median costs. Three (3) brachytherapy APCs have 2004 median costs that have proposed decreases far in excess of the 15% threshold: APC 312 at 93.12%; APC 651 at 81.89%; and APC 313 at 38.45%. HOPPS payment rates need to be relatively stable from year to year. CAB recommends that CMS apply a dampening adjustment to all APCs in 2004 to limit drastic reductions in payment. External Data Submission CAB recommends that CMS consider the best external data available in constructing final 2004 APC rates, including confidential data, to determine median cost calculations. CAB appreciates CMS s willingness to continue to accept external data in constructing the APC rates, especially for those APCs that have a proposed reduction in payment greater than 10% from 2003 to 2004. The Coalition plans to work with its member companies to provide external data for APC 313 High Dose Rate Brachytherapy, which has a proposed 35% reduction in payment for 2004. We are concerned however at CMS stringent criteria and parameters for submitting external data and request that CMS consider all external data based on its merits, including confidential proprietary data. CMS accepted confidential proprietary data in 2003 for benchmarking purposes. CMS should expand the use of confidential, proprietary external data to calculate the 2004 payment rates whenever such data is indicated and proven reliable. Additionally, some of the preferred criteria would be difficult, if not impossible to provide, especially by the closing date of the comment period. Indeed, the criteria seem to be seeking data identical to the claims data CMS utilizes, despite the problems with these data that precipitated the need for external information. The level of specificity in the CMS preferred criteria are often not available. CAB urges CMS to utilize the best data available. Correctly Coded Claims CAB recommends that CMS continue its efforts to use only correctly coded claims for device-related APCs where each claim must contain the relevant device code(s). Nonetheless, CAB continues to have significant concerns regarding the accuracy of CMS brachytherapy data. 14

CAB commends CMS on several methodological improvements included in the 2004 proposed rule. Specifically, we are pleased that CMS analyzed devicerelated claims and attempts to use correctly coded claims to determine the median costs. Nonetheless, as discussed above, CAB continues to have significant concerns regarding the accuracy of CMS brachytherapy data. Additional steps are necessary to ensure that CMS is not relying on poor data to establish reimbursement levels. Conclusion Brachytherapy offers important cancer therapies to Medicare patients. Appropriate payment for brachytherapy procedures and sources is necessary to ensure that Medicare beneficiaries will continue to have full access to high quality cancer treatment in the hospital outpatient setting. We hope that CMS will take these issues under consideration during the development of the HOPPS Final Rule. Should CMS staff have additional questions, please contact Wendy Smith Fuss, MPH at (703) 534-7979. Sincerely, Michael Krachon Chair Raymond Horn Vice-Chair Enclosures 15

Attachment 1 Coalition for the Advancement of Brachytherapy (CAB) The Coalition for the Advancement of Brachytherapy (CAB) is a national non-profit association composed of manufacturers and developers of sources, needles and other brachytherapy devices and ancillary products used in the fields of medicine and life sciences. CAB members have dedicated significant resources to the research, development and clinical use of brachytherapy, including the treatment of prostate cancer and other types of cancers as well as vascular disease. Over 90% of brachytherapy procedures performed in the United States are done with products developed by CAB members. Member Companies C.R. Bard Inc. IBt, Inc. MDS Nordion North American Scientific, Inc. Nucletron Corp. Oncura, an Amersham Business Pro-Qura Proxima Therapeutics, Inc. Theragenics Corporation Varian Medical Systems CAB Advisory Board American Brachytherapy Society American College of Radiation Oncology Association for Freestanding Radiation Oncology Centers Society for Radiation Oncology Administrators 16