Medicare
Hospital Outpatient Prospective Payment System (HOPPS)
In the hospital setting, CMS considers diagnostic radiopharmaceuticals as supplies necessary to perform the scan. As such, they package payment for them into the payment for the procedure. However, CMS considers the diagnostic radiopharmaceuticals to be drugs when determining Pass-Through Status for payment in the hospital outpatient setting of care.
Pass-Through Status provides separate payment for a new, FDA-approved radiopharmaceutical for at least 2 but no more than 3 years. Beginning in 2017, CMS changed the timing of the Pass-Through Status expiration to quarterly rather than annually, so as to afford a pass-through period as close to 3 years as possible. If the manufacturer submits an Average Sales Price to CMS, the agency will reimburse the drug at ASP +6%. If ASP is not provided, CMS will pay Wholesale Acquisition Cost (WAC) + 6% or reimburse at 95% of the drug’s most recent Average Wholesale Price (AWP).
A portion of the procedure payment rate reflects the cost of the drugs that are used for the scans. (In the case of PET procedures, FDG is the most common drug used.) Thus, CMS establishes “offset” rates so that there is not duplicate payment when reimbursing for the new drug with Pass-Through Status. The 2018 offset for PET = $248.29.
Upon expiration of Pass-Through Status, payment for the drug is bundled into the payment for the scan. The national average CMS payment for most PET scans will be $1377.12 in 2018.
Medicare Physician Fee Schedule (MPFS)
The Medicare payment for radiopharmaceuticals in non-hospital settings of care, such as the physician office or independent diagnostic testing facility (IDTF), is 95% of AWP, WAC +6%, invoice, or an allowable as set by the MAC. Pass-Through Status is not applicable in these sites. The PET scans are “carrier priced” which means that the payment is decided when the claims are processed. However, per the Deficit Reduction Act of 2005, most are paid at or near the current year’s HOPPS rate.
Commercial Insurers
Commercial Insurers typically bundle payment for the scan and the drug; the payment rate is per their contractual agreement with the provider.
Reimbursement for PET tracers
| Hospital Inpatient | Hospital Outpatient Departments | Physician Offices & Freestanding Imaging Centers | |
|---|---|---|---|
| Medicare | Packaged into the DRG payment | Packaged into payment for procedures unless Pass-Through Status is in effect | Based on Average Wholesale Price (AWP), Wholesale Acquisition Cost (WAC), Invoice, or Allowable. |
| Commercial Insurance | Commercial insurance rates are paid per the contractual agreements with providers. The drug is usually packaged into the procedure payment. Imaging services are typically subject to prior authorization. | ||
| Medicaid | Medicaid payment for drugs varies among the states and often within a setting of care. Diagnostic radiopharmaceuticals are often packaged into payment for the procedure. | ||
