2011 Fee Schedule Changes to Impact Radiologists

January 28, 2011

Unfortunately, it appears that several other changes to the Medicare Part B Physician Fee Schedule payment system will have a relatively significant impact on radiology revenue’s in 2011. Specifically, there are two major issues will affect us in 2011.

Just when we thought it was safe to go back in the water…

President Obama’s signing of the Medicare and Medicaid Extenders Act of 2010 (MMEA) in December 2010 essentially delayed the much talked about 23 percent reduction to the Medicare Conversion Factor for physician payments associated with the sustainable growth rate formula.

As the physician community in general uttered a cautious sigh of relief, those of us in radiology began to assess and analyze the 2011 fee schedule. Many are anxiously wondering if the reduction in the utilization rate factor would finally bring the PE relative value unit (RVU) value below the HOPPS Cap rate, thus lowering technical reimbursement for MRI and CT exams.

The good news is that the utilization rate factor did not have the devastating impact on the technical reimbursement for MRI and CT that was expected. Overall, technical payments for MRI have been reduced by about 3.5 percent, with CT realizing a roughly 1 percent increase. The specific impact on an individual practice basis will depend on its specific procedure mix within these modalities.

Unfortunately, it appears that several other changes to the Medicare Part B Physician Fee Schedule payment system will have a relatively significant impact on radiology revenue’s in 2011. Specifically, two major issues will affect us in 2011:

First, CMS made an adjustment to the RVU values to reflect the revised Medicare Economic Index (MEI) weights. To make those changes budget neutral, CMS had to make an adjustment to the conversion factor for 2011. Effective January 1, 2011, the conversion factor was reduced to $33.9764, down from $36.8729 in 2010.

For radiology, the impact was good and bad. On the technical side, aside from the MRI reduction discussed above, we will also see reductions in vascular ultrasound, CTA, and PET of about 3 percent, 3 percent, and 2 percent respectively. Fortunately, we will see increases in all other modalities ranging from 3 percent to 9 percent, depending on a practice’s procedure mix. On the professional side, radiologist practices will experience an across-the-board reduction ranging from 3 percent to 4 percent, again depending on procedure mix.

The second impact will come from the new code for CT of the abdomen and pelvis. Previously, practices billed two separate codes for these procedures. The reduction to professional reimbursement associated with CT of the abdomen and pelvis is 27 percent for the more common with contrast procedure. The reduction to technical reimbursement is about 42 percent compared with the first half of 2010 when the reduction in technical reimbursement for contiguous body parts was 25 percent, and about 34 percent compared with the second half of 2010 when the reduction for contiguous body parts was increased to 50 percent. Depending on an individual practice’s volumes of these procedures, the impact could be substantial.

Radiology practices should take the time to calculate the specific impact of the 2011 Medicare Physician Fee Schedule on their practice in order to properly assess revenue cycle efforts in 2011.

Tim Stampp, MBA, is chief of development at Medical Imaging Specialists. Stampp has 17 years of healthcare management experience and extensive domain expertise in dealing with the complex business issues surrounding the field of radiology in both the free standing and hospital based settings. He also owns a billing company, Integrated Care Solutions, where he provides medical billing and revenue cycle oversight to radiology practices and imaging centers.