CMS abandons extra payment cuts for multiple imaging procedures

August 9, 2006

The Centers for Medicare and Medicaid Services has decided not to impose an additional 25% reduction next year on technical payment for certain multiple imaging procedures. But physician reimbursement will be cut across-the-board by more than 5%, according to the Medicare Physician Fee Schedule proposed rule for 2007 published yesterday in the Federal Register.

The Centers for Medicare and Medicaid Services has decided not to impose an additional 25% reduction next year on technical payment for certain multiple imaging procedures. But physician reimbursement will be cut across-the-board by more than 5%, according to the Medicare Physician Fee Schedule proposed rule for 2007 published yesterday in the Federal Register.

CMS had imposed in 2006 a 25% reduction in reimbursement for the second and subsequent images of contiguous body parts when taken in a single session. An additional 25% reduction (totaling 50%) was set to take place in 2007.

In making the change, the government took into consideration the compounded impact of payment reductions mandated by the Deficit Reduction Act of 2005, along with comments it received from stakeholders, particularly the American College of Radiology.

The proposed rule states: "We believe it would be prudent to maintain the multiple imaging payment reduction at its current 25% level while we continue to examine the appropriate payment levels."

The DRA mandates caps to technical payments of the lesser amount of either the Physician Fee Schedule or the hospital outpatient prospective payment system (HOPPS). For imaging services subject to both the multiple imaging reduction policy and the outpatient hospital cap, CMS proposes to first apply the multiple imaging adjustment and then apply the outpatient cap. This approach results in higher payments than if the cap were applied first, according to the proposed rule.

The proposed rule also calls for a 5.1% across-the-board cut in payment rates for physician-related services as mandated by the sustainable growth rate (SGR) formula. The SGR formula compares the actual rate of growth in physician spending to a target rate, which is based partly on the gross domestic product. If the actual rate of growth exceeds the target rate, the update is decreased; if it is less, the update is increased.

Payment for physician services in 2005 increased by 10% over 2004, even faster than previously projected, mainly due to an increase in the number and complexity of services, including more frequent and intensive office visits, and rapid growth in the use of imaging techniques, according to the proposed rule.

Congress has intervened in the last four years to temporarily suspend the requirements of the SGR formula, essentially eliminating the cuts in physician payment rates. In passing these measures, Congress did not adjust the target, further increasing the gap between actual spending and the targets and exacerbating the already difficult situation, according to CMS.

Comments on the proposed rule for 2007 will be accepted until Oct. 10, and a final rule will be published later in the fall. The new payment rates and policies included in the final rule will be effective Jan. 1, 2007.

For more information from the Diagnostic Imaging archives:

Bipartisan Senate bill calls for DRA moratorium

Congress grills officials about imaging benefits, costs

Congress says 'wait' on hefty reimbursement cuts

Budget bill targets diagnostic imaging services

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