Understanding Radiopharmaceutical Billing

There are basically two things you need to know about radiopharmaceutical (isotope) billing:

1. Part-B Medicare versus Hospital Outpatient Prospective Payment System (HOPPS)
2. Acquisition Cost versus Fee Schedule.

  1. Part-B is billed by private physicians groups. HOPPS is billed by hospitals.  When billing Part-B, Medicare and many insurers allow the provider to bill separately for the radiopharmaceutical.  With HOPPS billing, the cost of the isotope is rolled into the main test CPT code.  While HOPPS reimbursements for the same CPT codes are typically higher than Part-B, the fact that the isotope can be billed separately usually means that Part-B pays significantly more.
  2. Most Medicare (and many private insurers) pay “acquisition” or “pass-through” cost for the radiopharmaceutical.  In other words, if the physician group pays $65 for a dose of Sestamibi, they bill Medicare (or the private insurer) $65. They make no profit on the isotope.  Some Medicare (although few) and private insurers have an established fee schedule for radiopharmaceuticals.  They pay a set fee for the isotope regardless what the physician group paid for it.  In other words, if the Medicare provider (or private insurer) pays $85 per dose for Sestamibi, then the physician group that pays $65 makes a profit of $20 per dose.

While pricing varies significantly by region and amount of isotope purchased, in general, the pricing in “acquisition” states tends to be higher since the physician group does not have the motivation to procure the lowest price since they get none of the benefit.  Of course, if they have an above average amount of private insurers who pay fee schedule, they may be very motivated to procure the lowest price regardless of how Medicare pays them.

For example:

On January 1, 2013 CMS converted Florida reimbursement for generic Sestamibi from “Fee Schedule” to “Acquisition Cost” reimbursement. Meaning that groups prior to January 1st would receive a fixed amount ($117.50) per dose regardless of what amount was actually paid by the practice for the corresponding dose. Thus this methodology allowed the imaging practice the opportunity to gain or lose depending on the price negotiated with the radiopharmaceutical supplier. Since the January 1st transition to “Acquisition Cost” reimbursement for Sestamibi, all physician practices purchasing directly from the radiopharmacy or secondary supplier must pass through their actual cost per dose, for which they receive identical reimbursement, making it an overall wash, wth no potential for gain or loss, thus leaving a void in previously seen revenue for most practices.