Senate bill establishes middle ground for reforms affecting diagnostic imaging

September 21, 2009

Comprehensive healthcare reform legislation rolled out by the Senate Finance Committee this week moved the debate closer to what radiologists and image service operators would consider a reasonable formula for the regulation of reimbursement and clinical practices.

Comprehensive healthcare reform legislation rolled out by the Senate Finance Committee this week moved the debate closer to what radiologists and image service operators would consider a reasonable formula for the regulation of reimbursement and clinical practices.

The bill sets a 65% assumed utilization rate for calculating technical fees for advanced outpatient imaging services subject to the Medicare Physician Fee Schedule. That proposal is higher than the current 50% rate used to calculate MPFS payments, but it is less than the 90% assumed rate in the committee's original proposal. It is also lower than the 75% assumed rate in House reform legislation. A higher assumed rate would lead to lower imaging reimbursement.

Other provisions in the Senate bill would freeze pending physician rate cuts from the Medicare sustainable growth rate policy, suggest a possible route to malpractice tort reform, but would impose a $4 billion tax on medical device manufacturers.

 

Overall, American College of Radiology officials are pleased with changes from earlier Senate proposals to provisions included in the finance committee bill. It was drafted after extensive hearings and roundtable discussions by a bipartisan group of three Republican and Democratic senators led by committee chair Max Baucus (D-MT).

"We're progressing," said Joshua Cooper, the ACR's senior director of government relations, in an interview with Diagnostic Imaging.

The Senate Finance Committee had originally proposed adjusting the assumed utilization rate formula from 50% to 90%, in line with recommendation from the Medicare Payment Advisory Commission and the Congressional Budget Office. After negotiations with the ACR and its allies, the Congressional panel chaired by Baucus decided to increase the utilization rate assumption to 65% for four years beginning in 2010, Cooper said.

Though not a total victory for imaging practitioners, the compromise proposal was gratifying enough to Cooper to talk about the imaging community's "good working relationship" with the Senate Finance committee.

The legislation would also require the Department of Health and Human Services to conduct a study by 2013 to establish the rate's impact on beneficiary access to medical imaging especially in rural areas, advanced imaging utilization, and Medicare costs.

"If the study comes back saying that at 65% Congress will reach budget goals, it stays at 65%. If, however, it comes back and says Congress will not reach budget goals, the secretary may raise the rate to 75% from 2014 through 2019," Cooper said.

As expected, the Senate bill proposes additional cuts for the technical component of payment for imaging of contiguous body parts during a single session. The legislation would double the technical component discount to 50%.

However, the bill would allocate $10 billion over 10 years to fund a new CMS Innovation Center to test new reimbursement approaches. It would investigate, for example, how physician compliance with appropriateness criteria affects the utilization and cost of imaging services.

Relating to physician self-referral, legislation would require physicians who operate their own in-office imaging equipment to inform patients about their ownership interest. They will also be required to provide patients with a list of alternative facilities where they can have their imaging done.

The proposal falls short of an unsuccessful amendment that would have ended the in-office ancillary equipment exception to federal self-referral law. The exception is considered responsible by many for in-office self-referral and its contribution to rapid imaging growth.

The imaging community does not believe this provision really gets to the core of the self-referral controversy, but it gives the ACR an opening in the future to give the law more teeth, Cooper said.

The bill also avoids making substantial changes to the Medicare sustainable growth formula, sought by the American Medical Association and ACR. It would essentially freeze impending SGR cuts by providing for a half percent decrease in physician payments next year, offset by bonuses to primary cares physicians and general surgeons in rural areas.

Repeated Congressional delays in implementing the SGR policy has led to accumulation of a 21% rate cut now pending for 2010. The finance committee would roll back implementation to 2011.

The legislation covers only sketchy provisions for medical malpractice or medical liability insurance reform. It includes ambiguous language about potentially creating state-run demonstration programs to evaluate alternatives to the current civil litigation system.

The ACR is bracing for a Congressional roller coaster ride on healthcare reform that may last until December, Cooper said. Although the Finance Committee is scheduled to begin talks on the bill Sept. 22, committee members on both Democratic and Republican sides of the aisle have already announced plans to introduce amendments. Jay Rockefeller (D-WV), chair of the finance committee's health subcommittee, is drafting 17 amendments.

"Even though we are pleased with what we see in the finance committee bill, there are many other opportunities where it could change along the way," Cooper said. "Maybe, we can affect some other changes down the road as well."

A more somber reaction came from the Advanced Medical Technology Association, a lobbying group for equipment vendors. AdvaMed rejected a provision in the Senate Finance bill for a $4 billion tax on manufacturers and importers of medical devices.

"Such a tax will sharply cut the resources available for research and development of life-saving medical treatments," said AdvaMed president and CEO Stephen J. Ubl.