Weighing Options and the Impact on Innovation

The RFI cites “longstanding concerns” raised by the Medicare Payment Advisory Commission (MedPAC) about over-reliance on a private organization with a financial interest in the CPT^® and Relative Value Scale Update Committee (RUC) process. CMS also suggests the processes may contribute to a “‘sick care’ system with limited emphasis on prevention and … inhibit progress on the Secretarial priority to Make America Healthy Again.”²

CMS requests input on the “harms or challenges associated with AMA’s monopoly” as well as “potential improvements to patient care diverted or delayed … including inhibited innovations and acquisition/maintenance costs of CPT^® licensure.” Notably, CMS also asks whether any alternatives to the CPT^® and RUC processes exist or could be developed and adopted to maintain a more objective process, while considering the impact on innovation.³

Alternative Coding Systems

CMS specifically seeks comments on the possible “benefits and drawbacks of paying for physician procedural services on the basis of the underlying International Classification of Diseases, 10^th Revision (ICD-10) procedure code, as an alternative,” with services grouped or bundled into payment categories similar to other Medicare payment systems. The agency notes that a combination of CPT^® and the Healthcare Common Procedure Coding System (HCPCS) codes were adopted through rulemaking as a national coding standard and questions the need for additional rulemaking and a separate legal standard.⁴

Following enactment of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Department of Health and Human Services (HHS) defined the combination of HCPCS and CPT^® codes as the nationally required medical data code set for physician and other specified services.⁵  In the RFI, however, CMS observes that “only HHS interpretation, not the Act itself, mentions CPT^®.”⁶

Ongoing Congressional Investigations

The agency’s inquiry comes in the wake of congressional investigations launched by the Senate Health, Education, Labor, and Pensions (HELP) Committee and the House Committee on Oversight and Government Reform (OGR).⁷ The Senate HELP Committee has focused on how the current CPT^{® “}monopoly” may increase costs within the healthcare system based on revenues generated through licensure and sales of ancillary services and materials.⁸ The House OGR Committee has questioned the complexity of CPT^® coding and noted the potential for the system to be gamed through improper billing, upcoding, or other abuses.⁹

Potential Threats to Innovation

Manufacturers and other innovation-sector stakeholders should recognize the potential for CPT^® reform to cause major upheaval, with risks of incomplete and inaccurate federal data systems, bias toward bundled and packaged payments, and federally driven rate-setting, among others. Given the broad scope of the RFI and related congressional interest, stakeholders should seriously consider taking this opportunity to inform CMS policy deliberations.