A set of healthcare reform funding options presented to the Senate Finance Committee has confirmed imaging provider fears about possible payment cuts. One option includes a Medicare Payment Advisory Commission proposal to recalculate the Medicare payment formula for the technical component of imaging services. 

The May 20 document, Financing comprehensive health care reform: Proposed health system savings and revenue options, was the last of three papers released after the healthcare reform roundtable discussions held by the Senate Finance Committee in April and May. Policy options established before the committee writes legislation in June identified three ways to fund expanded healthcare access: by reducing healthcare spending, by reevaluating health tax subsidies, and by raising taxes on lifestyle choices that affect healthcare costs.

"To make the system more affordable and provide coverage to all, we need to look at where we spend money on healthcare today," said committee chair Sen. Max Baucus (D-MT). "The first place that we should look for savings is within healthcare itself."

 

In a March 3 report, the Medicare Payment Advisory Commission(MedPAC) recommended changing the formula to calculate relative value units for the technical component of Medicare Part B reimbursement.

The current formula assumes that advanced imaging modalities, such as CT, MRI, or PET, are used on average 25 hours per week, or 50% of the time. MedPAC would change the assumed figure to 45 hours, or 90% utilization per week, for equipment that costs at least $1 million. MedPAC also proposed applying the standard to less expensive equipment. The change would save an estimated $2 billion in 10 years, according to the Congressional Budget Office.

Imaging proponents were aware that the RVU utilization assumption for high-tech imaging would be reconsidered even before MedPAC recommended a new formula. But the proposal's appearance during roundtable discussions was the first time it appeared in public before a congressional committee, said Orrin Marcella, the American College of Radiology's director of congressional affairs.

During previous roundtable discussions, panel participants recommended raising primary care payments while reducing expenditures for expensive subspecialty services, such as imaging. But moving funds from one specialty to another may not save money, Marcella said.

"If enacted, the policy would increase payments to the other physician services, but it wouldn't be anything more than a shifting of dollars in the Medicare fee schedule," he said.

Senate hearings also evaluated an option to increase competition in the insurance market to keep costs down and reduce the volume of wasteful procedures. Mention of a single-payer system as an alternative to privately run payers was conspicuously absent, however. Proponents attending the hearings, including physicians and nurses, were arrested by U.S. Capitol police after questioning the absence of single-payer experts on the panel. Baucus has since scheduled a meeting with five single-payer advocates in Washington, DC, this week.

Imaging advocates should focus mostly on the policy options published after the first Finance Committee's roundtable panel about adherence to appropriateness criteria, Marcella said. The policy encourages physicians to spend more time with the patient, instead of relying on a battery of tests -- including imaging -- to render a diagnosis. It also recommends electronic order entry systems with decision support to identify appropriate tests to find what is causing the patient's symptoms.

Imaging proponents are expected to strongly oppose proposed changes to the current practice expense formula. Any changes should be based on rigorous data that properly explain how often equipment is used outside the hospital setting, instead of the imaging utilization survey data underlying MedPAC's recommendation. That information is widely known to not represent practices for the country as a whole, Marcella said.

"We are going to continue to encourage both the House and the Senate to consider these policies based on current data and not old assumptions based on Medicare data from before 2005," he said.