IPPS Final Rule Cuts CT and MR Reimbursement

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The Centers for Medicare and Medicaid Services (CMS) final rule on 2014 Medicare rates for the Inpatient Prospective Payment System (IPPS) cuts advanced imaging reimbursement through changing the cost-to-charge ratios for CT and MR services.

CT and MR services now have their own separate cost-to-charge ratios based on data from hospital cost reports, but the American College of Radiology (ACR) and the Medical Imaging Technology Alliance (MITA) have both expressed concern that this data is not entirely reliable. Specifically, MITA notes that the cost data CMS is looking at does not adequately account for how expensive CT and MR systems are to acquire and maintain, and would result in reimbursement rates that in some cases are little more than a low-tech standard X-ray.

“CT and MRI services are capital intensive and allocation of capital costs within the cost reports is both complicated and subject to error. The new CT and MR cost centers will result in payment rates that do not reflect the differences in diagnostic power between imaging tests, as well as a hospital’s investment in advanced imaging technology,” stated the MITA press release.

The IPPS final rule also says that CMS could use the separate cost-to-charge ratios for CT and MR services to calculate the Hospital Outpatient Prospective Payment System (HOPPS) reimbursement rates for 2014 — a move the ACR and MITA oppose.

When the MR and CT cost models used to determine the hospital inpatient rates are applied to the outpatient setting, reimbursement could be reduced by as much as 38 percent for CT and 19 percent for MR, noted MITA. In addition, by law, the technical component for advanced medical imaging reimbursement under the Medicare Physician Fee Schedule (MPFS) cannot be larger than what Medicare pays hospitals. Therefore, the new lower hospital rate would become the de facto rate for the MPFS and in-office imaging.

“By any accounting method, there are no data to support doing this,” said Cynthia Moran, assistant executive director for government relations and economics at the ACR in an interview with MedPracticeBiz. “It causes distortions in reimbursement that cannot be justified, in any way, by legitimate policy.”

The ACR is preparing comments on the HOPPS proposed rule by the September 6, 2013, comment period deadline, and it will ask CMS not to implement the data specific to the CT and MR cost centers in the HOPPS final rule. Read its full statement.