Draft healthcare reforms would take bite out of imaging payments

June 23, 2009

The chairs of the three House of Representatives committees that oversee health policy have released an outline of healthcare reform that could lead to significant changes for radiology.

The chairs of the three House of Representatives committees that oversee health policy have released an outline of healthcare reform that could lead to significant changes for radiology.

Some proposals, like the possible elimination of the sustainable growth rate formula, are seen as positive steps by many physicians. Others, however, like a potential reimbursement cut for imaging procedures, promise to galvanize imaging proponents.

"Our discussion draft is the first step in delivering on the fundamental change that President Obama has called for, and that families and businesses need, by building a truly American solution to reduce costs, offer real choice, and guarantee affordable, quality healthcare for all," said Rep. George Miller (D-CA), chair of the Education and Labor committee.

Miller, along with Rep. Charles B. Rangel (D-NY), chair of the Ways and Means committee, and Rep. Henry Waxman (D-CA), chair of the Energy and Commerce committee, released the draft bill June 19.

Some of the key provisions of the "discussion draft" bill include:
• An adjustment of the assumed utilization rate for the relative value unit scheme used to calculate outpatient Medicare payment rates for the technical component of imaging procedures from 50% to 75%. It reflects a recommendation by the Congressional Budget Office that estimates savings of nearly $1 billion over five years and of almost $2 billion in a decade if such change is adopted.
• An adjustment of the technical component discount on imaging of consecutive body parts during a single imaging session from 25% to 50%. It heeds a 2005 recommendation by the Medicare Payment Advisory Commission to reduce payment on contiguous body parts because the resources needed to accomplish such task are also reduced.
• Replacement of the SGR with an increase of about 1% in the Medicare Physician Fee Schedule starting in 2010. This provision also proposes to divide all MPFS services in different categories with differential annual payment updates starting in 2011.
• The creation of Accountable Care Organizations charged with "packaging" a continuum of primary-to-tertiary physician and clinical services to improve healthcare coordination, reduce costs, and improve outcomes. The provision calls for the implementation of an ACO pilot program in 2012.

"At a macro level, we are pleased that the House has tackled the difficult question of getting rid of the sustainable growth rate," said Joshua Cooper, senior director of government relations for the American College of Radiologists. "From a micro level, we are obviously not thrilled about the fact that in the House draft there is an increase in the utilization assumption from 50% to 75% for all imaging modalities."

The draft bill is an assortment of both appealing and undesirable policy options, according to Cooper. The House proposal to increase the RVU utilization assumption rate provides a more palatable choice than the Obama administration's 95% rate. But increasing the contiguous body part discounts falls definitely out of favor.

"CMS tried to do that several years ago but then agreed with the ACR not to increase it," Cooper told Diagnostic Imaging. "We don't believe that anything has changed with regard to the data that would lead to proposing that particular provision. So we look forward to discussing that with the House."

The proposed legislation's treatment of mandatory oversight of high-tech imaging orders also drew a mixed response from radiologists. The House bill does not require the involvement of radiology benefit management programs, an initiative the imaging proponents strongly oppose, but it does not include decision-support order entry provisions that they back either.

"We are adamantly opposed to any kind of broad-based cut that is already having a chilling effect on patients and providers today," said Timothy P. Trysla, executive director for the Access to Medical Imaging Coalition.

Credible evidence indicates spending for some imaging services, such as mammography and bone density scans, is down by nearly 20%. Further cuts could only harm patients, Trysla said. AMIC members will attend hearings and educate lawmakers about the impact these reductions could have, particularly in rural areas. Applying the 95% rule could push providers to stockpile patients and run their offices only with this efficiency goal in mind.

"I don't think even GM runs their assembly line plants at a 95% clip," he said.

Nuclear medicine physicians share the concern. Targeting imaging for large spending cuts seems disproportionate when only about 4% of healthcare dollars are spent in this area, said SNM president Dr. Robert Atcher. The impact is exponential to nuclear medicine procedures, which make up only about 7% of all imaging.

"For us to be in the crosshairs constantly is really kind of unfortunate," he said.

The pressure on reimbursement and funding may impair molecular imaging's potential to contribute big changes. Policymakers may lose sight of the fact that many imaging procedures can be money savers by avoiding costly and unnecessary treatments in some patients or by setting others on the course of more cost-efficient management, he said.

"We've got to be very careful about making sure that the powers that be don't single out imaging and try to balance the books by cutting imaging, because the value associated with imaging is incontrovertible," Atcher said.

The process will be long and imaging proponents expect the real debate to start until mid July. No actions will be planed until imaging advocates really know what they are up against, Cooper said.

"We are going to hold our fire until we have much more of a concrete inclination as to what's going to stay, because right now we don't know exactly what's going to be in there," he said.