ACR predicts ‘access catastrophe’ from 16% Medicare rate cuts

November 4, 2009

The American College of Radiology is predicting that imaging access will plunge and patient waiting times will soar from new Medicare Physician Fee Schedule rules that will cut Medicare payments for outpatient imaging by an estimated 16% next year.

The American College of Radiology is predicting that imaging access will plunge and patient waiting times will soar from new Medicare Physician Fee Schedule rules that will cut Medicare payments for outpatient imaging by an estimated 16% next year.

Pressure from the Obama administration to restrain Medicare spending to offset the expected costs of expanded access through healthcare reforms was evident in rules that generally chipped away at high-cost services or well-paid physician specialists.

ACR officials expressed dismay at the new fee schedule rules, to be implemented Jan. 1.

"These shortsighted, unfounded, and misguided cuts will imperil community-based imaging, restrict access to cutting-edge imaging scans, and delay diagnosis of cancers and other critical conditions, which may ultimately cost lives," said Dr. James Thrall, chair of the ACR board of chancellors, in a written statement. "Many hospitals are not equipped to handle the substantial influx of patients that could result from the inevitable closure of rural and suburban imaging facilities caused by these cuts."

Thrall's concern stems from new fee schedule rules that will raise the assumed utilization rate from 50% to 90% for a typical 45-hour work week for imaging equipment with an initial purchase price of more than $1 million. The increased utilization rate translates into lower reimbursement rates for outpatient imaging services.

To back up its opposition the 90% assumed utilization rate, the ACR referred to a recent Radiology Business Management Association survey finding that rural providers use scanners only 48% of office hours and that the national average is only 54%. The survey was conducted after a high utilization rate was proposed, however, a factor that may have biased how the imaging center managers responded to the questionnaire.

For the 2010 rules, CMS used practice expense data from the AMA's Physician Practice Information Survey, a move that led to payment cuts for CT and MRI. The ACR criticized the AMA survey for not questioning enough radiologists to assure accurate results. The costs of office-based radiology practices were significantly underrepresented, it said.

In combination, the higher utilization assumption and practice expense reimbursement adjustments produced an across-the-board average 16% cut to imaging providers. Reimbursement for some procedures, such as lung CT or spinal MRI, could fall more than 40%, according to the ACR.

According to the Access to Medical Imaging Coalition, which represents proimaging interests, the 2010 fee schedule will cut payments for nonhospital outpatient imaging by 48% for pelvic CT, 46% for MRI of the chest and spine, and 27% for selected cardiovascular imaging services. Cuts to cardiology services could affect up to two-thirds of cardiovascular patients as some practices are forced to close, AMIC said in a release.

"These are catastrophic cuts when you talk about the combination of the practice expense and presumed utilization rate changes," said AMIC executive director Tim Trysla. "I know there is a lot of money being shifted to primary care physicians, but our biggest concern is these decisions are based on very limited information, largely from hospitals, to make these cuts."

BAD NEWS FOR CARDIOGISTS

Cardiologists were also displeased with CMS's use of the AMA practice survey. The American College of Cardiology blamed it for cuts from 10% to more than 40% for individual services. The reductions will be phased in over four years. Imaging-related cuts include a 36% cut for SPECT myocardial perfusion imaging, a 10% cut for transthoracic echocardiography with spectral and color flow Doppler, a 4% cut for coronary artery stenting, and a 5% cut for EKG.

The myocardial perfusion imaging rate cut will be implemented in January. CMS has also reduced payments for myocardial perfusion/SPECT studies by including wall motion and ejection fraction under a single billing code. The deep reimbursement cuts stem from a reduced physician work value and practice expense value, according to the ACC.

The 2010 fee schedule rules would be set in stone if this were an ordinary year, but with Congress fixated on reform, anything could happen in the next few weeks.

PENDING SGR CUTS

The imaging community will count on Congress to stave off the 21.2% across-the-board physician payment cut announced by CMS to adjust payments for its mandated sustainable growth rate requirement. Congress has intervened in each of the past seven years to delay proposed reductions. The accumulated effect of those individual decisions is reflected in the magnitude of the pending cut.

How Congress will respond this year is not easy to determine, according to Tom Greeson, a healthcare attorney with the law firm of Reed Smith. There have been attempts to deal with the so-called physician fix of the SGR mandate in reform legislation and in separate bills in the House and Senate.

The House reform bill would create two SGR update categories, Greeson said. The SGR increase in 2010 would be based on the Medicare Economic Index, a measure of inflation. It would be governed by two separate formulas in 2011, with primary and preventive services set at 2% above the index, and all other services, including diagnostic imaging, nuclear medicine, and radiation oncology, adjusted to 1% above the index, Greeson said.

Congress will also probably weigh in on the assumed utilization rate controversy. The Senate Finance Committee reform bill would increase the presumed utilization for advanced imaging technologies from the current 50% to 65%. The higher rates would be adopted incrementally between 2010 and 2013, according to Greeson. A required study of the higher rates will assess the reform's impact on Medicare costs and access to imaging services and in rural and underserved communities. It would have to be completed by 2013. Without follow-up congressional action, the presumed rate will increase to 75% in 2014.

The House bill would cut the presumed rate for MR, CT, PET, and nuclear medicine to 75%. That cut would be implemented in 2011.

ACCREDITATION TALK

Though still in the discussion stage, CMS invited comments on the 2010 final rules about the possibility of linking the 2012 accreditation requirement for high-tech medical imaging covered by Medicare and the antimarkup rule for independent diagnostic testing facilities, including self-referred in-office imaging services.

CMS raised the possibility of requiring physicians who provide general supervision for imaging to also serve as the physician who bills Medicare for those services, Greeson said. The new accreditation rule will apply professional competency standards to the supervising physician.

"It is generally assumed that the accrediting organization will require physicians to demonstrate that they are qualified to perform the service," Greeson said. "CMS will not dictate what those qualifications are, but it expects the accrediting organizations to have credentialing requirements for the physicians who perform and provide general supervision for imaging services."