Combined House reform bill may cost imaging $4.3 billion

October 30, 2009

Healthcare reform legislation from the House of Representatives, announced Thursday by Speaker Nancy Pelosi, is ready to go to members for discussion and a vote. The bill would cut Medicare payment rates for advanced imaging while establishing a 2.5% surcharge on the purchase price of new imaging equipment.

Healthcare reform legislation from the House of Representatives, announced Thursday by Speaker Nancy Pelosi, is ready to go to members for discussion and a vote. The bill would cut Medicare payment rates for advanced imaging while establishing a 2.5% surcharge on the purchase price of new imaging equipment.

The $894 billion package combines provisions from three bills approved separately by House committees this summer. Provisions in those preliminary bills that were opposed by imaging proponents appear in the combined 1900-page proposal. The bill would increase the presumed utilization rate for advanced imaging from the current 50% to 75% for Medicare reimbursement. It would also double Medicare's outpatient imaging discount for technical payments from 25% to 50% for consecutive anatomy examined with CT, MRI, or PET.

The two adjustments would cost the medical imaging community $4.3 billion over 10 years, according to Tim Trysla, executive director of the Access to Medical Imaging Coalition.

Trysla questioned the fairness of a proposal in the combined House bill to impose a 2.5% tax on the sale of new medical devices sold to hospitals, physicians, and clinics. Medical imaging is at risk of becoming the only healthcare sector to be subjected to a rate cut and a tax, he said. AMIC will lobby the House for an exemption to the new equipment surcharge.

"We're looking for a carve-out on this 2.5% tax because with these other measures, we have already given at the office," he said in an interview.

In contrast to the House proposal, the Senate Finance Committee bill proposed a $40 billion surcharge over 10 years for medical devices. Senate leaders, however, are moving toward cutting that proposed tax, perhaps to $20 billion, said Cindy Moran, assistant executive director of the American College of Radiology.

House leadership removed proposed changes to the Medicare sustainable growth rate formula out of the reform package for promised separate consideration.

"That lessens the chance of a significant SGR provision being enacted-other than what the Senate is undoubtedly going to end up doing, which is a one- or maybe two-year fix," Moran said.

Other provisions in the House bill would mandate a study of practice patterns in advanced diagnostic imaging and radiation oncology services. The federal study would evaluate the extent of physician self-referral arrangements and their effect on Medicare costs. The Senate Finance Committee bill would also fund a study and would require physicians to disclose self-referred arrangements.

The combined House bill would create a Center for Comparative Effectiveness Research. It would require the Medicare Payment and Advisory Commission to conduct a study on bone mass measurement including CT, dual-energy x-ray absorptiometry, and vertebral fracture assessment. The study would assess the fairness of Medicare payment rates for such services.

The combined bill is not materially different than the previously proposed House legislation, Moran said.

"We don't expect many amendments when this bill gets to the House floor, so what you see is pretty much what you get," Moran said.

Senate and House leaders are attempting to find common ground for provisions in their respective bills to minimize differences when the compromise legislation is eventually negotiated by a joint House-Senate conference committee. Too many differences now could prolong debate and jeopardize the entire bill, Moran said.

As Pelosi promised, the combined bill includes a public insurance option, but it would require the federal plan to negotiate payment rates directly with providers rather than using a payment schedule based on discounted Medicare rates. The House approach is likely to be more acceptable to the American Medical Association and other physician groups, Moran said.

"If they had put the Medicare rates in a public option, that would have given organized physicians, including us, a reason to be against that bill," Moran said. "Most people in medicine would have walked away.

The combined House bill proposes extending healthcare insurance to up to 36 million people by expanding Medicaid and offering both subsidies to middle-income Americans for insurance from private carriers and a public insurance option run by the federal government.

Despite its nearly $900 billion cost, Pelosi predicted the legislative package would reduce future federal deficits by $30 billion over the next 10 years.

In a release, House Republicans rejected the plan as "hardly the reform the American people need or deserve."