2015 MPFS: Estimating the impact to radiology

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 - Radiology impact

The 2015 proposed changes to the Medicare Physician Fee Schedule (MPFS) are consistent with those from previous years, continuing to whittle away the revenue stream of radiologists. The current proposal from the Centers for Medicare and Medicaid (CMS) estimates revenue reduction impacts for each specialty based on changes to the fee schedule. While the overall impact to radiology is estimated at two percent, there are some notable changes proposed that may cause the impact to be significantly higher in certain situations. These changes include adjustments to direct and indirect practice expense estimates, a continued emphasis on misvalued services and a potential expansion of payments for the secondary interpretation of images. Harry Purcell, operations manager for Zotec Partners, highlights the proposed changes relevant to radiology and explains some of the potential fiscal ramifications based on the proposed schedule for 2015 as the industry awaits the release of the final rule later this year.

Changing the equation

Even minor adjustments to the basic formula for calculating reimbursement can have an effect on the result. The adjustments may come from expense inputs, from changes to the conversion factor, or to the geographic practice cost index (GPCI), which are all factors in the formula used to determine reimbursement. Some of the proposed adjustments are minor, but some, such as the reduction in the area of technical expenses, are significant.

The practice expense input into the relative value unit (RVU) has been significantly reduced due to lower costs associated with digital imaging versus analog imaging; an adjustment based on the recommendation by the Relative Value Update Committee (RUC) to reflect the film-to-digital migration that is occurring in the industry. Many common procedures will be affected by this adjustment. “As an example, the payment rate for a chest x-ray is facing as much as a 17 percent reduction, based on the change in the physician fee schedule,” says Purcell.

Outpatient imaging center operators have a vested interest in the technical portion of services and the reimbursement of those services and may want to begin estimating the fiscal ramifications of how the new RVU values assigned to technical services will impact their practices.

“I’m not sure that many people within the radiology specialty fully understand the potential impact of this change. If you look at the impacts as a whole, it would appear to be smaller—it is estimated at two percent. There is a caveat, however, that I think deserves special emphasis this year. Though the estimated impact to radiology may only be two percent, those that operate in an outpatient imaging center may sustain a much higher impact because of the shift in cost for technical services.”

Additionally, although there was a zero percent update mandate in the conversion factor from January 1 through March 31, 2015, there was a small adjustment, from $35.8228 to $35.7977 to maintain budget neutrality that will affect reimbursement. The GPCI, another factor in the reimbursement calculation, is set at 1.0 through the end of March 2015, but if that rate is not extended, it may drop. Using a multiplier of less than 1.0 in the calculation will reduce the overall reimbursement amount. The GPCI, which has been established for every Medicare payment locality for each of the three components of a procedure's RVU, is tied to cost of living and has the potential to reduce reimbursement in some areas.

“It’s critical to understand that all of the changes to the individual factors in the equation have a compounding effect on the result. It’s also important to point out that any effects we see this year will be further compounded by sequestration,” Purcell adds. “In any case, I think it’s an important first step that groups begin to do some calculations as to what the impact to their practice may be, based on the new values assigned to procedures, keeping in mind that the final rule will be published near the end of the year. The American College of Radiology (ACR) provides a great resource in its table of estimated impacts. I would recommend that groups start there and apply any changes to their volumes to get the weighted average of those impacts.”

Notable coding changes

With the publication of the 2015 MPFS Proposed Rule, CMS provided a list of 65 codes that could potentially be misvalued, and about 25 percent pertain to imaging exams. One example of a coding change

Claudette Lew is associate editor, ImagingBiz.