Contrast media industry seeks HCFA reimbursement

June 21, 2000

Companies say patients are the ones hurt by rulesDespite the looming deadline, contrast media companies still hope to persuade the Health Care Financing Administration that contrast media is a valuable imaging device worthy of its own codes

Companies say patients are the ones hurt by rules

Despite the looming deadline, contrast media companies still hope to persuade the Health Care Financing Administration that contrast media is a valuable imaging device worthy of its own codes and reimbursement rates.

HCFA, which administers the Medicare and Medicaid systems, has proposed a new outpatient payment system. Originally, the new system was slated to become effective July 1, but now will go into effect Aug. 1. The system is based on ambulatory payment classifications (APCs). HCFA announced at the beginning of this month that the new codes were postponed because the agency had missed some milestones in advancing the system’s implementation.

Some industry analysts think the new codes could cut radiology services reimbursement by 30% and the changes could cause radiologists to leave hospitals to partner with or go to work for private, freestanding clinics. Medicare reimbursement is higher for procedures conducted at such clinics, which are exempt from the new government codes.

Currently, the only contrast agent use that is reimbursed by Medicare in an outpatient hospital setting is low-osmolar contrast used with CT or angiography. The Medical Imaging Contrast Agents Association (MICAA) is concerned that if HCFA doesn’t create specific reimbursement codes for contrast agents used with all modalities, clinicians will not have financial incentive to use them, and that this will create a two-level healthcare system.

Right now, contrast is reimbursed in private, freestanding clinics. In a freestanding clinic, reimbursement for the technical component of MRI with contrast agent is $1000. In a hospital, it is $388, whether contrast is used or not.

MICAA would like to see APC groupings for imaging procedures that are clinically comparable, said Lisa Saake of Mallinckrodt and cochair of MICAA’s reimbursement policy committee.

Rather than having all codes for all MR procedures under a single APC grouping, MICAA would like to see three groupings: for imaging procedures without contrast, imaging procedures with contrast, and imaging procedures first done without but followed by contrast procedures.

“MICAA would like to see a system that would pay people fairly for the materials and supplies they are using,” Saake said.

Dr. Jack Slosky of DuPont Pharmaceuticals and the second chair of the MICAA reimbursement policy committee, said lack of reimbursement for contrast imaging most often hurts elderly patients who rely predominantly on Medicare, because doctors won’t have any incentive to use it.

In addition, Slosky said, it also “economically hampers” contrast agent manufacturing companies, which sometimes spend in excess of $100 million in the research and development of one agent. He added that private healthcare insurers may also adjust reimbursement after HCFA’s rate decreases.

“They very frequently follow HCFA’s lead,” Slosky said.

Both Saake and Slosky said MICAA is committed to working with HCFA and other radiology groups like the American College of Radiology and the National Coalition for Quality Diagnostic Imaging Services on this issue. Last month, many representatives of these organizations met face-to-face with HCFA to discuss the issues. A HCFA spokesman did not return phone calls about the contrast agent policy.

Dr. Ernest Ring, associate dean and chief of radiology at the University of California, San Francisco, said he is concerned that hospitals will have to pinch a lot of pennies to deal with the new codes. Lower reimbursement could cause hospitals to think twice about buying capital equipment. He said that under the new APC rules, HCFA’s contribution to payment will be sharply reduced for most imaging studies done at hospital-based imaging facilities and insurance companies’ copayments to hospitals will need to be much greater than they would be at independent, freestanding clinics.

“Hospitals will stop being profit centers and start being cost centers,” Ring said.

The most valuable preparation hospital administrators can make for the new APCs is to learn them. USCF has hired a consultant to advise them on how to organize outpatient services in light of the new changes, Ring said.

“The most important thing a radiologist can do is to study the APCs so the consultants aren’t just telling you what to do, but so you can ask questions and understand in advance what the issues are as they affect you,” Ring said.