While Medicare reimbursement rates are fixed for 2013, radiology leaders say the latest round of Congressional cuts targeting imaging are “Draconian” and could hinder patient access to quality imaging care and stymie research.
In passing the 2012 American Taxpayer Relief Act (ATRA), the so-called “fiscal cliff” legislation, on Jan. 1, Congress bypassed a U.S. Centers for Medicare and Medicaid Services (CMS) proposal to cut overall physician payment rates by 26.5 percent as dictated by the sustainable growth rate (SGR) formula determining Medicare reimbursement rates. Congress has passed such a temporary “doc-stop” fix each year since 2003.
While radiology specialty leaders were pleased cuts were averted and current rates frozen through 2013, they are frustrated that Congress has yet to permanently fix the SGR formula, once again leaving physicians in a state of flux. To help pay for the stop-gap measure, estimated to cost $25 billion over 10 years, Congress approved $800 million in Medicare cuts to advanced medical imaging services and $300 million in cuts to radiation oncology. Both cuts begin on January 1, 2014.
“Extending the deferral of cuts to physician reimbursement was very welcome but does not remove the Sword of Damocles hanging over the heads of practicing physicians in the U.S.,” said James Thrall, M.D., a nationally recognized expert in radiology and economics. “The piecemeal approach is demoralizing and paralyzes the ability to make plans.”
Patients—particularly those in rural areas—could pay the price for the string of imaging cuts that will likely drive imaging services back to hospitals from non-hospital outpatient centers, Dr. Thrall said. Future research, Dr. Thrall and other radiology leaders warn, could be another casualty of the new laws. “It is crucial that these Draconian cuts, in addition to the Medical Device Tax, not be allowed to permanently scuttle the research and development in our specialty that is critical to all major healthcare delivery,” said William T. Thorwarth Jr., M.D., a nationally recognized expert on radiology economics and reimbursement and RSNA Board Liaison for Publications and Communications.
The Medical Device Tax, which went into effect Jan. 1, imposes on all medical devices a 2.3 percent tax—a cost that could trickle down to radiologists. The Medical Imaging and Technology Alliance (MITA) condemned the tax, saying it could hinder the development of medical imaging technologies, and ultimately obstruct research.
Lawmakers plan to plug the $800 million Medicare deficit by increasing the technical component (TC) equipment utilization threshold for advanced imaging equipment from 75 to 90 percent, effective Jan. 1, 2014. The cost of medical equipment is one of three “direct inputs” CMS considers in determining TC practice expense reimbursement. As the utilization rate assumption (the percent of time equipment is actually in use) rises, the “expense” per study goes down, reducing TC reimbursement, Dr. Thorwarth said.
Considering ACR’s estimate that typical facilities—especially rural practices—operate imaging equipment closer to 50 percent of the time, the new law sets an unattainable threshold for radiologists, Dr. Thrall said. “As someone personally involved in managing outpatient imaging facilities, I can say it is almost impossible to use equipment 90 percent of the time,” said Dr. Thrall, radiologist-in-chief and chair of the Department of Radiology at Massachusetts General Hospital in Boston.
“Apparently CMS believes we are imaging the track team, who can get on and off the scanner in record time,” said Dr. Thorwarth, a radiologist with Catawba Radiological Associates in Hickory, N.C., where he also serves the Frye Regional Medical Center, Catawba Valley Medical Center and Caldwell Memorial Hospital.
By potentially forcing rural, non-hospital providers out of business, the higher assumption rate will negatively affect the ability of rural communities to access high-quality, advanced medical imaging, Dr. Thorwarth said. In addition, hospital-based imaging is more expensive to the healthcare system overall.
“This is the kind of arbitrary cut that undermines trust and breeds cynicism among physicians towards CMS,” Dr. Thrall added.
Despite fervent ACR backing, the Diagnostic Imaging Services Access Protection Act (H.R. 3269/S. 2347), which would have protected imaging from further Medicare cuts, was not approved by Congress. The bill would have avoided a 25 percent reduction to the professional component of certain diagnostic imaging services for multiple imaging studies administered to the same patient, by physicians in the same practice setting, on the same day.
“We must continue to work at the grass roots level to educate our legislators that the multiple procedure payment reduction has no basis in the ‘resource-based’ reimbursement system that they mandated in 1988,” Dr. Thorwarth said.
Drs. Thrall and Thorwarth stress the urgency in finding a permanent solution to the flawed SGR formula that is already having negative repercussions throughout healthcare.
Dr. Thrall said that passage of proposed CMS cuts could exacerbate “a mass protest and substantial exodus of doctors away from providing services to Medicare patients” that is already happening on a small scale without the cuts, according to the American Medical Association (AMA). In a 2010 survey of more than 9,000 doctors who care for Medicare patients, the AMA found that one in five physicians overall are restricting the number of Medicare patients in their practice and one in three primary care doctors are restricting those patients. The top two reasons: 85 percent said Medicare payment rates were too low and 78 percent cited ongoing threat of future payment cuts.
In the face of ardent opposition from ACR and the AMA, legislators have chosen the annual stop-gap fix rather than the $300 billion cost of permanently repealing the flawed formula. But without a permanent solution, a similar scenario will undoubtedly unfold on Capitol Hill in 2014.
“It is critical that all physicians, including radiologists, understand that these one-year patches do not avoid impending reimbursement reductions that have been compounding annually for the past decade based on a faulty model—namely, the SGR formula,” Dr. Thorwarth said. “The cost of permanently resolving this issue continues to rise and, in these times of a rising deficit, creates a huge problem.”
The perception that radiology is a huge driver of healthcare costs is the primary driver of the seemingly never-ending string of imaging-related cuts. Radiology has experienced $6 billion in Medicare cuts for imaging services since 2006, according to ACR.
However, a comprehensive analysis that draws on Medicare’s own data shows that imaging use is down nearly 5 percent since 2006, and spending on imaging is down 21 percent over the same time period. The research by Richard Duszak, M.D., and Jonathan W. Berlin, M.D., appears in the October 2012 issue of the Journal of the American College of Radiology (JACR). (See sidebar.)
Such data could begin to change the perception that imaging is responsible for rapidly rising healthcare costs, experts say. “One might argue that imaging was growing too fast a decade ago and some of the initiatives such as imaging reimbursement cuts in the Deficit Reduction Act of 2005 were inevitable, but imaging costs are no longer growing faster compared to other Medicare services,” Dr. Thrall said.
To access the JACR study, “Utilization Management in Radiology, Part 1: Rationale, History, and Current Status,” go to jacr.org/article/S1546-1440(12)00335-3/abstract.
To access the JACR study, “Utilization Management in Radiology, Part 2: Perspectives and Future Directions,” go to jacr.org/article/S1546-1440(12)00334-1/abstract.
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