LUGPA Policy Brief – Modernizing C-APC Payment to Protect Access to Innovative Urologic Care

August 2026

At A Glance

The Issue:
Under Medicare’s Hospital Outpatient Prospective Payment System (OPPS), Comprehensive Ambulatory Payment Classifications (C-APCs) provide a single bundled payment for a primary procedure and related services, including certain drugs and biologics after temporary pass-through payment status expires.

The Challenge:
C-APC packaging can promote efficiency for routine services, but may not adequately account for newer, high-cost therapies. Once pass-through status expires, the cost of an innovative therapy may be absorbed into a C-APC rate based on historical claims and costs that do not reflect the therapy’s current acquisition or administration costs.

Why It Matters:
Inadequate payment can make innovative treatments financially unsustainable for independent practices and outpatient facilities, limiting patient choice and potentially shifting care to higher-cost or less convenient settings.

LUGPA’s Position:
LUGPA urges CMS to establish a targeted exclusion list or comparable payment mechanism for qualifying high-cost innovative therapies whose costs cannot reasonably be captured within existing C-APC rates.

Background

Under the OPPS, CMS uses Ambulatory Payment Classifications (APCs) to establish payment for hospital outpatient services. Under the C-APC methodology, CMS generally provides a single bundled payment for a primary service and associated services rather than separate payment for each component.

In the CY 2023 OPPS Final Rule, CMS moved CPT code 51720, which describes bladder instillation of antineoplastic agents, into C-APC 5372. As a result, drugs administered as part of the service are generally packaged into the C-APC payment once applicable temporary pass-through status expires.

Packaging can promote efficiency when applied to routine, lower-cost services and supplies. However, challenges arise when a newer, high-cost therapy is incorporated into a C-APC rate based largely on historical utilization and cost data.

This can create a mismatch between payment and actual resource use. The concern is not with packaging itself, but with ensuring that packaging does not inadvertently make clinically appropriate, innovative therapies financially unsustainable.

Impact on Independent Urology

LUGPA represents independent urology practices that provide a substantial share of urologic care nationwide, including treatment for bladder cancer and other complex urologic conditions.

When C-APC payment does not reasonably reflect the cost of an innovative therapy, practices and outpatient facilities may face pressure to:

• Limit access to new treatment options for Medicare beneficiaries;
• Shift care to hospitals or other settings, potentially increasing costs and patient burden;
• Reduce services or investment in innovative treatments; and
• Contribute to consolidation by making it more difficult for independent practices to sustain comprehensive specialty services.

These effects are particularly concerning in urologic oncology, where timely access to appropriate treatment can affect treatment options, quality of life, and continuity of care.

LUGPA’S Position

LUGPA urges CMS to refine the C-APC methodology to ensure that payment policy supports, rather than impedes, access to innovative cancer therapies.

LUGPA supports a targeted exclusion list or comparable payment mechanism for qualifying high-cost innovative therapies when their costs cannot reasonably be captured within an existing C-APC rate.

This approach would:

• Improve payment accuracy by better reflecting the costs of innovative therapies;
• Protect patient access to appropriate treatment in community settings;
• Preserve the efficiency of packaging for routine, lower-cost services;
• Support innovation by avoiding payment policies that discourage adoption of new therapies; and
• Strengthen independent specialty care by reducing unintended incentives for consolidation.

The Bottom Line

Innovative therapies should not become victims of outdated payment methodologies.

CMS can preserve the efficiency of C-APCs while creating appropriate safeguards for high-cost therapies whose costs cannot reasonably be captured within existing bundled rates.

For patients with urologic cancers, accurate and predictable payment is essential to maintaining access to innovative treatment, preserving patient choice, and sustaining high-quality community-based specialty care.

LUGPA stands ready to work with CMS and other stakeholders on practical, data-driven reforms that protect Medicare beneficiaries while supporting access to innovative urologic care.