Radiology loses to primary care in proposed 2010 CMS fee schedule

July 2, 2009

Medicare reimbursement for high-tech imaging, including MRI and CT, could be cut by up to 40% if the Obama administration moves ahead with plans covered in proposed changes to the 2010 Physician Fee Schedule to shift funds to primary care physicians.

Medicare reimbursement for high-tech imaging, including MRI and CT, could be cut by up to 40% if the Obama administration moves ahead with plans covered in proposed changes to the 2010 Physician Fee Schedule to shift funds to primary care physicians.

In draft rules published July 1, the Centers for Medicare and Medicaid Services proposed raising Medicare fees to family doctors, internists, and other general practitioners by 8%.

By law, CMS was also required to propose an across-the-board 20% rate cut in the 2010 Medicare Physician Fee Schedule to meet the requirements of the Sustainable Growth Rate formula.

 

However, few observers expect the 20% cut to be implemented. Congress has intervened in each of the past six years to delay proposed cuts, and it is expected to drop the SGR formula entirely for some yet-to-be determined alternative plan in healthcare reform legislation.

"The industry is prepared to accept cuts in payments," said Thomas W. Greeson, a partner with the law firm of Reed Smith in Falls Church, VA, and a Diagnostic Imaging contributor. "But they want a more rational approach to decreasing the overall payments for diagnostic imaging services rather than doing a crude, meat axe, per-procedure pay cut."

In addition to the SGR rate cuts, the proposed MPFS for 2010 proposes to raise the utilization rate assumption to 90% for the technical component of imaging equipment priced at $1 million or more. The current assumed rate is 50%.

Citing the latest report from the Medicare Payment Advisory Commission, CMS officials said that MedPAC data confirm that imaging facilities would never invest in equipment to be used only half of the time. The rate, according to CMS, should reflect actual imaging equipment utilization.

Changes to the utilization rate alone mean that reimbursement for the technical component of CT, MRI, and PET could take a hit of as much as 40%, said Pam Kassing, the American College of Radiology's senior director of health economics and policy.

"We've been on the radar screen for several years now, although the utilization of imaging has slowed in the past couple of years," Kassing said.

The proposed rule also includes a provision called for in the Medicare Improvements for Patients and Providers Act of 2008. MIPPA requires suppliers of the technical component of advanced imaging to secure accreditation by designated accrediting organizations by Jan. 1, 2012.

Accrediting bodies would include the ACR and the Inter Society Commission. According to Greeson, however, the proposal does not set minimum qualification requirements for a number of other accrediting organizations, physician executives, or nonphysician personnel.

"If CMS is going to select the accrediting bodies, it should expect them to meet certain minimum standards. And they are not doing that," Greeson said.

Following an intense agenda for healthcare reform, draft bills in both houses of Congress already contemplate Medicare payment provisions. The House is even contemplating changing or getting rid of the SGR formula.

"Whatever Congress does will take precedence over what's in this rule," Greeson said.

The MPFS proposal also contains provisions to boost improvements in quality of care and patient outcomes through revisions to the Electronic Prescribing Incentive Program and the Physician Quality Reporting Initiative. Individual physicians or groups that qualify for these programs could earn incentive payments.

CMS will accept comments on the proposed rule until Aug. 31 and will issue a final rule by Nov. 1, 2009. The Medicare fee schedule will become effective on Jan. 1, 2010.