Alliance challenges plansto regulate medical imaging

May 1, 2009
H.A. Abella

Armed with data suggesting that imaging is not growing as fast as critics claim, an alliance of 47 imaging-related groups is fighting two proposed Medicare reforms in Washington that could cut payment rates and apply prior authorization requirements to the federal healthcare insurance program.

Armed with data suggesting that imaging is not growing as fast as critics claim, an alliance of 47 imaging-related groups is fighting two proposed Medicare reforms in Washington that could cut payment rates and apply prior authorization requirements to the federal healthcare insurance program.

Findings from a study, paid for by the Alliance for Medical Imaging Coalition, indicate that Medicare spending on advanced imaging fell nearly 20% from 2006 to 2007, while the volume of studies grew less than 2% in the same period.

AMIC's results contradict reports by the Medicare Payment Advisory Commission (MedPAC) and other Congressional advisors suggesting that high-tech medical imaging is driving higher Medicare costs.

The 2009 MedPAC report noted that annual Medicare Part B imaging growth has slowed but continued to grow faster than other physician services. The overall imaging growth rate from 2006 to 2007 was 3.8%, according to MedPAC, but that increase was still considerably higher than the 2.9% growth rate for all physician services for those two years.

MedPAC chair Glenn M. Hackbarth focused on rising imaging costs in March in testimony before the influential House Ways and Means subcommittee on health, where he asked Congress to raise the assumed utilization rates in the relative value unit formula used to calculate outpatient Medicare rates for high-tech imaging.

Since the advent of RVUs in 1991, Medicare has assumed that CT, MRI, and PET are used an average of 25 hours per week, or 50% of the time. This assumption led to higher payments for these services and produced an incentive for healthcare providers to buy the machines and use them as often as possible, Hackbarth said.

MedPAC recommended raising the equipment utilization rate factor for imaging equipment costing above $1 million to 45 hours per week, the equivalent of 90% utilization. The Congressional Budget Office estimated the change could save more than $2 billion in a decade. According to Paul Viviano, president of the Association for Quality Imaging, the higher assumed rate would translate into a 4% to 8% rate cut for imaging providers.

AMIC criticized the proposal, noting that it relied on data from a 2006 survey of physician office and freestanding imaging center utilization in six communities that it believes are not representative of the whole country.

“We are not opposed to accurate pricing of these services. What's critical is that the Centers for Medicare and Medicaid Services do this-and is required by statute to do this-based on real data,” said AMIC executive director Tim Trysla.

At the same time, AMIC opposed a proposal from the Obama White House to use radiology benefit managers to evaluate individual physician orders for high-tech outpatient imaging covered by Medicare in the same way the firms have been employed by private healthcare insurers.

Having to submit orders to a benefit manager for approval before imaging is unpopular with physicians but may cut waste and save money. The administration estimates that it could save Medicare $260 million in 10 years.

AMIC members rejected prior authorization and instead expressed support for mandatory imaging facility accreditation that was passed into law last year as part of the Medicare Improvement for Patients and Providers Act (MIPPA)

It also backed decision-support order entry systems for imaging similar to the type that was established at Massachusetts General Hospital as an alternative to prior authorization. A statewide pilot program yielded positive results last year in Minnesota.