Medicare Fee Schedule Impacts Access, Experts Say

January 7, 2014

CMS’s 2014 Physician Fee Schedule includes significant reimbursement reductions and changes. But it’s not all doom and gloom. Here’s what you need to know.

The CMS 2014 Physician Fee Schedule brings significant reimbursement reductions to several coding families, but that’s not the only change you’ll see over the next year. And, according to industry experts, most of the policy alterations could directly affect access to care.

“Although we at the American College of Radiology are always concerned about our members being paid appropriately, we are ultimately concerned about the challenges to access that can come from these payment reductions,” said Ezequiel Silva, MD, co-chair of the ACR’s Commission on Economics. “The changes this year are quite significant. There are new measures which means new reporting requirements. It’s extremely complex. We’re digesting it now, and it’s a real challenge.”

Main Changes

You’ve likely already heard about the plethora of coding and reimbursement changes headed your way this year, but the 2014 Physician Fee Schedule contains other details that will affect your payments and practice in the future.

1. Hospital Outpatient Changes: It’s clear in the final rule that you’ll see a significant reduction - between 29 percent and 50 percent - to many breast imaging codes this year, but that’s only part of the story. According to the ACR’s summary, there will be an additional 50-percent payment cut to these services under the Hospital Outpatient Prospective Payment System (OPPS).

“The consequence of this reduction is that it’s very possible that the payment for these outpatient services will be lower than the cost to provide them in terms of supply, staff, and necessary elements,” Silva said. “Our worry is whether those services will be available for women in all areas. By simple geographic distribution, they may not have access to the outpatient physician offices or imaging centers that can afford to provide the services they need.”

2. Equipment Utilization: CMS is also mandating that you use the 90-percent utilization rate for equipment, meaning the agency holds that your diagnostic equipment is in use for 90 percent of the time your office is open for business. This is a jump from the 75-percent rate previously used.

Previous ACR estimates predict a utilization rate this high could siphon away $800 million from imaging services. Current analysis from the Radiology Business Management Association (RBMA) puts the figure at $1 million. RBMA also stated in a letter to CMS that such a high utilization rate doesn’t accurately reflect daily activities.

“Real world scheduling demands, e.g., lunch and other breaks, irregular exams, emergency exams, maintenance, weather, breakdowns and ‘no shows,’ make achieving a 90-percent utilization rate nearly impossible, even in the busiest centers, and is not representative of the norm,” the letter stated.

Implementing this type of change, Silva said, also contributes to the industry-wide fear that access to radiology services will drop across the county.

Some Good News

Although CMS originally posited using OPPS payments and those from ambulatory surgical centers (ASCs) to develop practice expense relative value units (RVUs), the agency subsequently dropped the measure after many in the industry, such as the ACR and RBMA, objected.

Basically, this move would have allowed CMS to cap payments for services that receive higher reimbursements when performed in non-facility settings than in hospital outpatient departments or ASCs.

However, CMS isn’t letting the issue drop.

“We will consider more fully the comments received,” the agency said in the final rule. “We expect to deliver a revised proposal for using OPPS and ASC rates in developing [practice exchange RVUs] which we will propose through future notice and comment rulemaking.”

In addition, CMS decided against further implementation of the multiple procedure payment reductions for 2014.

Preparing Yourself

Even though you must abide by these changes, Silva said, you can soften any potential blows by integrating capital investment and staffing decisions into your budgetary planning.

Most importantly, he said, you should familiarize yourself with the ACR’s latest initiative, Imaging 3.0. This program is designed to help you move from volume-focused practice to one that is value-based and more clinically visible.

“You must become more and more a member of the enterprise where you work,” he said. “Whether it’s working with other specialties, administration or larger hospital systems or academic medical centers, we need do our best to maintain a strong presence for radiology in all settings.”

Silva acknowledged, however, that getting providers to accept these additional responsibilities could be difficult because there no additional payment associated with these activities. 

For the foreseeable future, he said, the ACR is committed to protecting the fee-for-service system because it will protect provider payments as the healthcare system moves to an accountable care organization (ACO) or other bundled payment system. It’s a move made, he said, ultimately to safeguard access to care.

“We recognize that fee-for-service is under attack and that an evolution is taking place from volume to value,” he said. “But, currently, most providers are paid for their services under the fee-for-service system, and they will need appropriate payments to stay afloat and provide care while we work toward a new reimbursement paradigm.”