Medicare bundling proposal raises concern

July 19, 2007

Radiologists could be shortchanged if Medicare goes through with plans announced Monday to end its long-standing policy of paying separately for imaging contrast media, radiopharmaceuticals, interventional radiology supervision, and interpretation.

Radiologists could be shortchanged if Medicare goes through with plans announced Monday to end its long-standing policy of paying separately for imaging contrast media, radiopharmaceuticals, interventional radiology supervision, and interpretation.Medicare's 2008 proposal for the Hospital Outpatient Prospective Payment System would increase payment rates for CT from 5% to 15% but would bundle the cost of contrast media into the payments for the same time, according to Pam Kassing, the American College of Radiology's senior director of economics and health policy. Similar increases are planned for MRI, including a bundled contrast component.

The HOPPS bundling plan also would apply to the following procedures:

  • technical component of nuclear medicine procedures and the costs of radiopharmaceutical agents
  • technical component of image-guided procedures, including interventional radiology, and the supervision and interpretation performed during those procedures
  • 3D reformatting and MR and CT procedures

Kassing was particularly concerned about the proposal's implications for interventional radiology. The radiology component of imaging during angioplasty, which is billed separately from the therapeutic procedure itself, would be batched and billed under a single code, she said. The same principle would be applied to all IR applications, including fluoro, ultrasound, MR, and digital subtraction guidance.

The plan to batch 3D reformatting would set aside recent efforts at the ACR and other societies to more narrowly define the billing codes for imaging reformatting practices to reduce their possible overuse. Bundling could be a source of confusion among physicians and administrators because it would not apply to the technical component of the Medicare Physician Fee Schedule for nonhospital outpatient services and independent diagnostic testing facilities. Reforms in the 2006 Deficit Reduction Act require Medicine to pay the lower of HOPPS or Physician Fee Schedule rates. By bundling payments for HOPPS and not for the PFS, the appropriate billing rate will be hard to identify, Kassing said. "Whatever changes are made for hospital outpatient services will also affect the office setting because of the DRA. This creates confusion about what is included in a lot of these codes and how that affects payment for procedures performed in the office setting," she said.The bundling proposal reflects the preference among CMS planners for reforming outpatient payments to more closely reflect Medicare's diagnosis-related group (DRG) system for the payment of inpatient care. Planners favor a hybrid system combining DRGs and Medicare Physician Fee sSchedule rates, Kassing said.Since 2000, however, radiologists have not fared well whenever Medicare has attempted to bundle the items involved with performing a radiological, nuclear medicine, or cardiac imaging procedure."We've monitored this closely. Is Medicare capturing all of the costs when they set these single rates? The answer to that question has most often been no," she said.Still, the proposed 2008 HOPPS proposal is not all bad news for imaging practitioners. The new rates for PET look generous, and the ACR is in preliminary agreement with CMS's decision to ask for payment for separately payable therapeutic radiopharmaceutical agents based on mean costs derived from hospital claims data and to continue paying separately for brachytherapy sources, Kassing said.Medicare will accept comments about the proposal until mid-August. A final plan will be implemented in January 2008. For more information from the Diagnostic Imaging archives:

Medicare outpatient payment proposal singles out imaging services for bundled payments

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CMS proposes 10% rate cut and self-referral restrictions in 2008 Medicare physician payment schedule