ACE Pilot Illustrates Pitfalls of New Payment Methods for Radiology

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When a radiology practice became a participant in the CMS Acute Care Episode (ACE) Demonstration several problems with payment bundling came to light says Neale Pashley, operations manager for Medical Management Professionals (MMP), which works with the practice.

The current ACE Demonstration, announced by CMS in 2009, took place at five hospital sites that agreed to be paid a single sum for all Part A and B services for Medicare inpatients (a five-year pilot, set to begin in 2013, will also look at payment bundling for postacute services in a variety of settings). The ACE pilot raised questions about the role of specialists (such as radiologists) who contract with hospitals.

One of the biggest challenges faced by the radiology practice participating in the pilot was the hospital’s role as payor, Pashley said in the current issue of ImagingBiz. “The way this program was presented, the practice would be paid at Medicare rates, but instead of billing Medicare, it would bill the hospital,” he says. “It was a wash, for the practice, in terms of payment. The downside was trying to get Medicare and the hospital to understand which patients fell into the program—because they were not on the same page, our claims would be denied. Medicare would claim a patient was not part of the program when he or she was.”

Because “upstream” specialist like cardiologists and orthopedists had control of the episode of care in the demonstration, the commoditization of radiology was also accelerated, Pashley said.

Based on the experience of MMP’s client practice, Pashley warned, “Radiologists have to be more proactive. If they do not get involved in what is happening now, four or five years down the road, they will not get any say.”

Read the full ImagingBiz story.