CMS proposes imaging payment cuts, extends self-referral law to nuc med

August 3, 2005

Medicare plans to reduce technical payments for cross-sectional imaging of contiguous body parts and to apply the federal physician self-referral law to diagnostic and therapeutic nuclear medicine for the first time.

Medicare plans to reduce technical payments for cross-sectional imaging of contiguous body parts and to apply the federal physician self-referral law to diagnostic and therapeutic nuclear medicine for the first time.

The Centers for Medicare and Medicaid Services also announced Aug. 1 that it intends to reduce payments on the Physician Fee Schedule by 4.3%.

The reduction in the Physician Fee Schedule payment comes after several years of modest increases. The conversion factor upon which CMS bases the Physician Fee Schedule has been subject to cuts in the last several years. Congress has intervened in three of the last four years, however, to ensure physicians are not subject to those cuts.

"This could be the first year of what could be several years of reductions as applied to relative values," said Thomas Greeson, a healthcare lawyer with Reed Smith in Falls Church, VA. "We could see this trend continue unless Congress takes some steps to correct it."

Earlier this year, the Medicare Payment Advisory Commission (MedPAC) recommended to Congress that payment be limited when imaging is performed on contiguous body parts in the same patient session. CMS has proposed that this change occur in the 2006 Physician Fee Schedule. It will apply only to the technical, and not the professional, component of the exam.

CMS has identified 11 families of imaging procedures by imaging modality (ultrasound, CT and CTA, MRI and MRA) and by contiguous body area (for example, CT and CTA of chest/thorax/abdomen/pelvis) that will be affected by the change.

When contiguous body parts are imaged in a single session, CMS proposes to pay 100% for the first procedure and half for all others.

Under the technical component, CMS considers clinical labor, supplies, and equipment to calculate the relative value units.

"When multiple images are acquired in a single session, most of the clinical labor activities and most supplies are not performed or furnished twice," the proposed rule change said.

The American College of Radiology said last month it was concerned when CMS announced the same payment reduction to the Hospital Outpatient Prospective Payment System (HOPPS).

Medicare already prohibits a physician from referring a patient for imaging to a facility where the referring physician has a financial interest, but nuclear medicine has been exempt from this rule. CMS now proposes to have nuclear medicine - both diagnostic and therapeutic - included under the federal referral laws known as Stark II.

"We believe nuclear medicine services pose the same risk of abuse that the Congress intended to eliminate for other types of radiology, imaging, and radiation therapy services and supplies," CMS said.

The CMS plan to make diagnostic and therapeutic nuclear medicine subject to Stark II law reverses a 2002 decision to exempt those applications from regulation.

The plan does not apply to the in-office exemption that allows cardiologists to provide nuclear cardiac imaging in their offices, according to CMS officials.

About 75% of all nuclear cardiology is performed by cardiologists under those conditions, according to Dr. David Levin, professor emeritus at Thomas Jefferson University.

CMS had exempted nuclear medicine from Stark because most nuclear medicine procedures were primarily performed in hospital facilities, subjecting them to self-referral prohibition.

But the trend has reversed, and now many more nuclear medicine procedures are performed in physician offices or in physician-owned freestanding facilities, according to CMS.

MedPAC testimony before Congress stated that diagnostic imaging services paid by Medicare grew more rapidly than any other type of physician service between 1999 and 2003. Nuclear medicine jumped by 85% between those years.

A concomitant jump in technical component claims for nuclear medicine procedures during 1999 and 2002 also indicates a shift to performing services in physician offices rather than in hospitals, according to MedPAC testimony.

The proposed rule will be published in the August 8, 2005 Federal Register. CMS will accept comments on the proposals until September 30 and publish a final rule later this year.

For more information from the Diagnostic Imaging archives:

ACR calls report on skyrocketing imaging distorted/a>

Panel builds case for new self-referral limits

Radiologists and cardiologists square off before Congress

Federal imaging proposals mesh with ACR initiatives

Medicare commission sets priorities for cutting imaging costs