Groups challenge plan to slash imaging technology payments

March 16, 2009

Rebuttal to a proposal by the Medicare Payment Advisory Commission to change the formula for calculating practice expense relative value units for advanced imaging exams has come from Access to Medical Imaging Coalition, a partnership among various professional and trade political interests.

Access to Medical Imaging Coalition, a partnership among various professional and trade political interests, has rebutted a proposal by the Medicare Payment Advisory Commission to change the formula for calculating practice expense relative value units for advanced imaging exams.

Coalition members argue that MedPAC's plan is based on flawed information. They point to an independent 10-year analysis that suggests Medicare imaging spending dropped by nearly 20% from 2006 to 2007 while the volume of studies grew less than 2% in the same period.

In its annual report to Congress released March 3, the 17-member MedPAC recommended changing the assumed equipment utilization rate factor for imaging equipment costing above $1 million from 25 hours per week (50% utilization) to 45 hours per week (100% utilization). According to the report, the use of the proposed utilization assumption for its relative value units reimbursement formula could reduce payments for the technical component of MRI, CT, and PET by up to 44% under some circumstances.

During a March 16 phone conference, AMIC members, including the American College of Radiology, criticized MedPAC for relying on potentially misleading MRI and CT utilization data from a survey of six urban areas in altering the utilization assumption. The survey provides insufficient data to justify an alternative proposal, said AMIC executive director Tim Trysla.

"We are not opposed to accurate pricing of these services. What's critical is that CMS do this -- and is required by statute to do this -- based on real data," Trysla said.

To justify their position, AMIC members highlighted findings of a recent report by the Moran Company, a Washington DC-based research and consulting firm. The Moran report is based on Medicare claims data from 1998 to 2007 for CT, MR, and nuclear medicine including PET. It found that Medicare spending on advanced imaging was reduced by 19.2% from 2006 to 2007. Volume of service grew by only 1.9% during that period.

The 2009 MedPAC report noted that annual Medicare Part B imaging growth has slowed but continued to grow faster than other physician services. The overall imaging growth rate from 2006 to 2007 was 3.8%, according to MedPAC, but that rise was still considerably higher than the 2.9% growth rate for all physician services for those two years.

AMIC members credited imaging appropriateness guidelines and other factors for slowing utilization. They questioned the Obama administration for including in its proposed budget mandatory prior authorization for imaging, administered by private radiology management companies, as a way to control imaging growth.

AMIC members expressed support for decision-support order entry systems similar to the type established at Massachusetts General Hospital as an alternative to prior authorization. A statewide pilot program testing imaging decision-support order entry was completed last year in Minnesota. AMIC members admitted, however, that no studies have been conducted to date assessing the pros and cons of an order entry system that includes appropriateness criteria.

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