Congress weighs need to change pending Deficit Reduction Act

July 19, 2006

The imaging community pleaded with Congress July 18 to delay cuts in Medicare reimbursement mandated by the Deficit Reduction Act of 2005 and scheduled to take effect Jan. 1, 2007. Representatives of providers and vendors presented testimony extolling the virtues of imaging and bewailing the legislation that could exact as much as $8 billion from Medicare reimbursements annually.

The imaging community pleaded with Congress July 18 to delay cuts in Medicare reimbursement mandated by the Deficit Reduction Act of 2005 and scheduled to take effect Jan. 1, 2007. Representatives of providers and vendors presented testimony extolling the virtues of imaging and bewailing the legislation that could exact as much as $8 billion from Medicare reimbursements annually.

Testifying on behalf of the National Electrical Manufacturers Association, Donald Rucker, chief medical officer of Siemens Medical Solutions USA, explained that medical imaging has changed medicine for the better.

"The power of imaging to offer more precise and less invasive care has sparked what can only be described as a fundamental transformation," he said. "Physicians can now use imaging for more conditions, for more patients, and for a much broader array of purposes than ever before."

Broad patient-centric changes are driving increased utilization of medical imaging, yet these are often overlooked in policy discussions, he said. Instead, the assumption is that financial incentives of providers lie at the heart of rapid utilization growth.

"No one can doubt that financial incentives play a role in the use of imaging," Rucker said. "But the impact of these incentives pales in comparison to these broader patient-centered changes."

Members of Congress seemed receptive, as they repeatedly expressed concern over how the DRA cuts would affect patients, said Tim Trysla, executive director of the Access to Medical Imaging Coalition composed of physicians, patients, and providers.

Trysla was pleased that many of the representatives on the panel urged passage of HR 5704, a bill introduced by Rep. Joe Pitts (R-PA) and more than 50 other members of Congress calling for a two-year moratorium on the DRA cuts while the Government Accountability Office analyzes the impact on patients.

Industry executives fear that prospective customers, particularly those shopping for big-ticket items such as MR and CT scanners, will put off purchases, at least until the impact of the cuts is better understood, dampening revenues for the rest of this year and well into the next.

The DRA calls for capping the technical component reimbursement of in-office imaging at the lesser amount of either the Medicare Physician Fee Schedule (PFS) rate or the Hospital Outpatient Prospective Payment System (HOPPS) rate. Such a formula could affect both utilization and acquisition of medical imaging equipment.

Dr. Arl Van Moore Jr., chair of the American College of Radiology board of chancellors, speaking to members of the House Committee on Energy and Commerce subcommittee on health, said HOPPS was not designed to reflect costs at the procedure level accurately, as hospital reporting systems may not uniformly delineate capital equipment costs. Consequently, reimbursement from HOPPS is generally lower than from the PFS, forcing losses of between 20% and 50% in revenue, depending on the patient Medicare mix and the volume of advanced imaging.

"ACR believes picking and choosing between the two payment systems based upon whichever is cheaper invalidates and corrupts both systems, not only for imaging services but for all of medicine," he said.

The DRA policy also does not address imaging utilization, according to Moore. Physicians who refer patients to their own equipment can take advantage of this policy and recover losses by ramping up volume, the exact opposite of what Congress intended, he said. Implementing the DRA, therefore, could hurt more than it might help.

"Some referring providers with access to equipment are up to four times more likely to order an imaging study than those without access to equipment," said John Donahue, president and CEO of National Imaging Associates, a radiology utilization management company.

Glenn M. Hackbarth, chair of the Medicare Payment Advisory Committee, amplified this assertion, stating that doctors are increasing imaging utilization to supplement their professional fees. When challenged, Hackbarth said he can show slides from presentations where doctors say exactly that.

(MedPAC recommendations echo ACR proposals that all imaging providers, regardless of specialty, meet federal standards for physician training, equipment maintenance, and certification of nonphysician staff.)

Also testifying before the panel was Dr. Pamela S. Douglas, immediate past president of the American College of Cardiology, who detailed efforts by the college and other imaging providers to develop appropriateness criteria, including accreditation, training programs, guidelines, and performance measures.

"The purpose of these is to address overuse, underuse, and misuse of imaging. These criteria are patient-centric and ask whether the right test is used for the right patient at the right time," she said.

She concluded by saying that it is important that the federal government recognize specialty society efforts to ensure quality and safety and that these not be duplicated on the federal level.

The political nature of the hearings was clear as committee members recited personal anecdotes demonstrating the benefits of imaging. They were called to task by California Democratic congresswoman Anna G. Eshoo, who accused colleagues of talking out of both sides of their mouths. On one hand, they celebrate imaging, and on the other, they are cutting funding for it, she said.

"Maybe our chairman (Nathan Deal, R-TX) today wants to explain the cuts," Eshoo said. "I think he voted for them."

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