Legislative/Reimbursement Updates


As you know Palmetto released a draft LCD for Supervised Exercise training on May 17th.  The comment period ran through July 19th and we are now waiting on their final decision.  Responses were provided to Palmetto from many organizations and groups including NCCRA and AACVPR.  We will communicate the final LCD as soon as we know it’s available.

Response to SET draft LCD

Section 603 of BBA of 2015 – impacting movement to off campus locations

Section 603 of the Balanced Budget Act of 2015 mandated that hospitals would no longer be able to bill under the hospital outpatient methodology, i.e., higher reimbursement rate, under certain conditions:

  1. If an existing off campus (beyond 250 yards) service moves to a new location, the hospital is required to bill at the physician fee schedule rate rather than the hospital outpatient rate.
  2. If a hospital opens a NEW hospital outpatient service, that new service must be within 250 yards of the main campus in order to receive hospital outpatient reimbursement; otherwise, the physician fee schedule rate applies.

Impact on Pulmonary/Cardiac Rehabilitation (PR/CR): Hospitals that choose to expand or relocate (beyond the 250 yard threshold) services must bill at the physician fee schedule rate, thereby creating a very strong disincentive for hospitals to improve access to PR/CR services. (A very limited number of exceptions to this exist.)  CMS recognizes this reality as an “unintended consequence” of Section 603, but the Agency states it has no authority to address our problem.

Political considerations: Section 603 received strong support on Capitol Hill, on both sides of the political aisle as it addressed an important issue at one end of the Medicare scale. However, PR/CR are at the other end of the scale, definitively evidenced by Medicare data.

  • Pulmonary rehabilitation billing under the physician fee schedule for all medical specialties for G0424 totaled $535K in 2014, a 22% reduction from 2012. The largest single specialty, pulmonary disease, is under $230K for G0424.
  • Cardiac rehabilitation billing under the physician fee schedule for all medical specialties for CPT 93798 totaled $1.2M in 2014, a 30% reduction from 2012. The largest single specialty, cardiology, is under $1M for 93798.

This clearly documents that that the primary premise of Section 603 does not apply to either PR or CR because hospitals are not purchasing pulmonary or cardiac practices to benefit from the higher reimbursement rate for PR/CR services. Simply stated, these services are NOT being performed in physician offices, nor have they been provided in that setting for years.

Solution: We are seeking sponsors for legislation that would exempt hospitals from Section 603 and the implementing regulations by creating specific thresholds. As long as no physician specialty, nationwide, bills for any CPT or HCPCS code under the Medicare Physician Fee Schedule in an aggregate amount greater than $1million in the previous year for which data are available, that code (or codes) would be exempt from Section 603 requirements.

As noted above, because billing for 93798 and G0424 under the physician fee schedule has no physician specialty billing exceeding $1M, those codes would be exempt from Section 603 requirements.

NCCRA representatives recently met with Representative Butterfield with the hope of gaining his support in introducing legislation that would help this issue.  Although he was able to provide some advice and direction, he has not committed to assisting with this effort at this time.  We appreciate the assistance we received from the programs in his district that wrote letters of support for this work.   AACVPR will hopefully be able to partner with other House and Senate members to get this bill created and moved forward.