If you run an independent oncology center in California, you need to pay attention to what is happening in 2026. Because it is not good.
Effective January 1, 2026, CMS deleted CPT codes 77385 and 77386 and implemented a revised radiation oncology payment structure under OPPS. Services previously billed under these codes are now subject to APC-based payment classification under APC 5621, 5622, and 5623, creating new payment dynamics that may significantly affect reimbursement for independent practices.
For hospital-owned centers, this is annoying but manageable. For independent radiation oncology billing California practices? This is a direct hit to your revenue. And if you are not preparing for it right now, you are already behind.
What’s Actually Changing and Why It Matters
For years, IMRT billing was straightforward. You had two CPT codes:
- CPT 77385: Complex IMRT planning
- CPT 77386: Highly complex IMRT planning
You documented the case, billed the code, and got paid. The rates were fixed. You could budget around them.
CMS has deleted both codes and radiation oncology services are now classified under a three-tier APC payment structure:
| APC Code | Level | What It Covers |
|---|---|---|
| 5621 | Level 1 | Low-complexity radiation therapy |
| 5622 | Level 2 | Moderate-complexity services |
| 5623 | Level 3 | High-complexity services (cases previously billed under 77385/77386) |
Here’s the Problem
Reimbursement is no longer fixed. It is tiring. CMS used historical CPT 77385 and CPT 77386 cost data, with geometric mean costs of $568 and $634, respectively, when setting APC 5623 for 2026. As a result, reimbursement may be lower for some cases that do not support the highest complexity level under the new payment structure.
Why Cases Face Downgrade Risk
Under the previous system, you had some flexibility. A borderline case between complex and highly complex could usually be justified as highly complex with decent documentation.
The new APC classification structure changes that. To qualify for Level 3 (APC 5623), the documentation must clearly establish genuine high complexity. That means documenting:
- Why this case required advanced planning
- Number of treatment areas
- Proximity to critical structures
- Use of advanced techniques (SRS, SBRT)
- Time spent on planning
- Clinical decision-making complexity
If the documentation does not meet the Level 3 threshold, the claim may be classified at Level 2 (APC 5622) or Level 1 (APC 5621), with a corresponding reduction in reimbursement.
Early experience with the new APC structure suggests that documentation standards for Level 3 classification are being applied more stringently than the previous CPT 77386 criteria. Cases that would have qualified as highly complex under 77386 may not meet Level 3 requirements without more explicit documentation of complexity factors.
The practices navigating this successfully are not just updating their codes. They are overhauling their entire documentation process.
SRS and SBRT Under the New APC System
Stereotactic radiosurgery and stereotactic body radiotherapy cases should consistently qualify for APC 5623 Level 3 given their inherent planning complexity. But the new system requires explicit documentation of the stereotactic-specific factors.
Under the old CPT 77386 structure, SRS/SBRT complexity was generally understood. Under the new three-tier APC structure, that complexity must be stated explicitly:
- Sub-millimeter targeting precision and the clinical rationale for it
- Image-guided verification frequency and technique
- Respiratory gating if used, with documentation of why it was clinically necessary
- Margin reduction rationale that distinguishes stereotactic from conventional planning
Centers that have historically billed SRS/SBRT cases under CPT 77386 without capturing these specific elements in the treatment planning note face downgrade risk on exactly their highest-value cases. Do not assume stereotactic equals Level 3 automatically. Prove it in the documentation.
Why Independent Centers Are Getting Hit Harder
Hospitals are dealing with the same APC changes. But they have advantages you do not.
Hospitals have integrated revenue streams. If their radiation oncology department takes a hit, they absorb it across imaging, surgery, and infusion therapy. They have cushions. Independent centers do not. Radiation oncology is your revenue.
Hospitals have compliance teams. Dedicated coders and auditors making sure documentation supports the highest reimbursement. They started preparing months ago. Most independent centers have one biller handling oncology coding plus denials, prior auths, and everything else.
Hospitals have negotiating leverage. They contract across dozens of service lines and can push back on unfavorable rates. Independent centers take the rates they are given.
That is why this is hitting independent practices harder. It is not just a policy change. For some centers, it is a survival issue.
The Audit Risk You Should Be Preparing For
CMS did not create this three-tier system to make billing easier. They created it to control costs. And the three-tier structure gives auditors a clear, documented framework to challenge complexity classifications.
Under the new APC classification, Recovery Audit Contractors (RACs) and MACs are expected to focus on one question: does the documentation support the Level 3 classification, or should the case have been classified at Level 2?
Noridian, the MAC for California and the Western region, has historically been active in radiation oncology claim reviews and is expected to apply the new APC criteria in its audit processes.
If auditors find cases classified at Level 3 that do not meet the documentation threshold, they may recoup the overpayment and potentially apply that finding across similar claims in your history.
Even if you win the appeal, the process takes months. Your cash flow strangles. Your staff spends weeks pulling charts instead of doing their jobs.
The only way to minimize this risk is getting documentation right from day one. Not after the first audit. Not after the first denial. From your very first claim under the new system.
What You Need to Do Right Now
1. Audit Your Current Cases Against the New Criteria
Pull your last six months of CPT 77385 and 77386 claims. Go through them. Ask yourself: if CMS reviewed this case today under the new APC system, would the documentation support Level 3?
Be honest. If the answer is “probably,” that means it might not. CMS does not do “probably.”
If more than 20% of your cases would face downgrade risk, you have a documentation problem. Fix it immediately.
Run a Test Audit This Month
Pick 20 random IMRT cases from the last quarter. Review the documentation as if you’re a CMS auditor.
Ask:
- Is the complexity clearly documented?
- Is planning time recorded?
- Are clinical decision points explained?
If you can’t confidently say “yes” to all three, your documentation needs work
2. Retrain Your Team on What “High Complexity” Means Now
Your dosimetrists, physicists, and physicians need to understand the bar has moved. What passed as “highly complex” under CPT 77386 might not meet the APC 5623 Level 3 threshold.
They need to document why the case required advanced planning, what clinical factors made it complex, how much time planning took, and what alternative approaches were considered.
This is not gaming the system. It is capturing the clinical reality of your work. Because if it is not documented, CMS says it did not happen.
Level 3 (APC 5623) Documentation Best Practices
CMS has not published a formal documentation checklist for Level 3 APC 5623 classification. However, based on the complexity criteria outlined in the 2026 OPPS Final Rule, the following documentation elements represent best practices for supporting Level 3 claims:
| Documentation Element | Recommended Content | Completed |
|---|---|---|
| Clinical complexity statement | Explicit statement why conventional planning was insufficient | ✓ |
| Planning time record | Total physician and dosimetrist planning time in hours | ✓ |
| Advanced technique justification | Named technique (IMRT, SRS, SBRT, VMAT) with clinical rationale | ✓ |
| Critical structure proximity | Named structures, distances, dose constraints applied | ✓ |
| Number of treatment areas | Explicit count, not implied by procedure description | ✓ |
| Alternative approaches considered | Brief documentation that simpler approaches were evaluated and rejected | ✓ |
| Physician attestation | Treating physician signature on complexity assessment | ✓ |
If any row is unchecked, the claim faces downgrade risk. Review documentation before submission.
3. Review Your Payer Contracts
Your current contracts are probably tied to CPT codes, which means they are about to be obsolete. Anthem Blue Cross of California, Blue Shield of California, and Health Net are the major commercial payers to prioritize. Ask your contracts team.
- Are our rates based on CPT codes or APC levels?
- Do we have language accounting for CMS reimbursement changes?
- What happens if APC rates drop further in 2027?
When approaching commercial payers about APC transition language, negotiate three specific protections:
APC floor rate guarantee: Negotiate a minimum reimbursement floor for Level 3 APC 5623 claims that is no less than your current CPT 77386 contracted rate. Without this, payers will automatically apply the lower Medicare APC rate as their reference when contracts renew.
Transition period protection: Request a 12-month rate hold from January 2026 that prevents payers from reducing radiation oncology rates while both parties assess actual claim distribution under the new APC system.
Downgrade dispute resolution: Add contract language specifying that APC level determinations are subject to peer-to-peer review, preventing automatic acceptance of a payer’s unilateral downgrade decision.
Payers will not offer these protections voluntarily. They must be negotiated before contract renewal, not after the first downgraded claim arrives.
4. Train Your Billing Team Now
Your billing staff needs to understand the APC system at the operational level. The specific training priorities are:
APC Grouper logic: How the OPPS Grouper software assigns claims to APC levels based on revenue codes, CPT codes, and modifiers in combination.
Revenue code mapping: APC claims require the correct revenue code alongside the procedure code. Revenue code errors are a separate denial trigger from procedure code errors.
OPPS remittance advice reading: APC remittance advice uses different remark codes than professional claims. Train your team to identify APC-specific denial and adjustment codes before the first claims are returned.
If you wait, you will spend months submitting incorrect claims and dealing with denials.
5. Know How to Appeal an APC Level Downgrade
When a claim is classified at Level 2 instead of Level 3, the appeal process requires different documentation than a standard medical necessity appeal.
Step 1: Request the specific downgrade reason in writing. MAC and RAC decisions must specify which complexity criteria were not met.
Step 2: Pull the treatment planning records. The appeal package must include the physician’s complexity assessment, dosimetrist planning notes with time records, the treatment plan showing beam angles and field complexity, and proximity mapping to critical structures.
Step 3: Reference the CMS complexity criteria directly. Your appeal letter should quote the APC 5623 Level 3 criteria from the 2026 OPPS Final Rule and explain point-by-point how the documented case meets each criterion. Generic appeals fail. Criterion-specific appeals succeed.
Step 4: File with your MAC within the redetermination window. For Medicare OPPS claims, the redetermination request deadline is 120 days from the remittance advice date. Missing this deadline forfeits the appeal regardless of clinical merit.
Will Commercial Payers Follow?
Here’s what most centers aren’t thinking about: this won’t stay in Medicare. Commercial payers (Anthem, Blue Cross, UnitedHealthcare) often adopt CMS payment models within 12–18 months. Even if Medicare isn’t your primary payer, the APC shift is coming. Maybe not in 2026. But probably by 2027.
California Medi-Cal and the APC Transition
Medi-Cal managed care plans in California typically align with CMS payment model changes within 12 to 24 months. If your patient mix includes Medi-Cal beneficiaries, which is common for independent centers in the Inland Empire and Central Valley, your contracts with Anthem Blue Cross Medi-Cal, Health Net, and Molina should be reviewed now.
Contracts that reference “Medicare allowable” or “percent of OPPS rate” will automatically adjust when the APC transition takes effect, creating an additional revenue reduction beyond the direct Medicare impact. Review the rate reference language in every Medi-Cal managed care contract.
Need Help Preparing for the 2026 Changes?
Dastify Solutions specializes in oncology billing and coding compliance. We will audit your current claims, train your team on the new APC structure, and make sure you are not leaving money on the table under the new system.
Schedule a Free Consultation With Our Oncology Billing Experts
The Bottom Line
The practices that navigate this transition successfully will be the ones that treated it as a financial and operational project, not a billing update to address after the first denial. The revenue math is straightforward: any cases that fall from Level 3 to Level 2 under the new APC structure represent a per-case reimbursement reduction that compounds across your annual volume. The documentation overhaul, billing team training, and contract renegotiation cost less than the revenue you lose by not doing them
