Radiology and the MPFS: Implications and Impact

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CMS released the 2011 Medicare Physician Fee Schedule (MPFS) in July, proposing myriad changes that CMS notes would result in a 6% payment cut for radiology services. That reduction doesn’t include the impact of the 23% cut that will take place on December 1, when this year’s temporary 2.2% payment update expires—or the additional 6.1% cut resulting from the 2011 sustainable growth rate (SGR) calculations, according to CMS. The 2011 proposal also begins implementing provisions of the Patient Protection and Affordable Care Act. Randle RoatPam Kassing, MPA, RPC, senior director for economics and health policy at the ACR®, notes that the total Medicare monies allocated to physician services will shrink by $3 billion, and spending will also be redistributed among specialties. Radiology took the biggest hit, Kassing adds. “We were at the epicenter of an earthquake, and everybody else felt a little shake,” she says. The exact impact on each practice will vary depending on patient mix and services provided, according to Randal Roat, vice president of radiology services for Medical Management Professionals (MMP), Atlanta, Georgia. Physicians should begin making their own calculations to see how these changes will affect them. “As these government regulations are becoming more complex, they are also becoming a bigger and broader part of our practices,” he says, noting that MMP has already begun working with radiology practices on these calculations. “This year has been unbelievably challenging,” he adds. Rebasing the Economic Index Without intervention by lawmakers, radiologists could be looking at a cut of 30% or more in their Medicare fees starting January 1, 2011. This potential reduction stems from a combination of the 2011 MPFS changes and the cumulative effects of postponing the SGR-mandated cuts. Many analysts, however, expect another round of political machinations to begin once this year’s midterm elections have been held in November, as the latest temporary SGR fix expires. Lawmakers have stepped in at least nine times to prevent draconian cuts from taking place. In this 2011 proposal, CMS also proposes rebasing and revising the Medicare Economic Index (MEI)—a component of the SGR calculation—by changing the year used to determine physicians’ expenses to 2006 (from 2000). CMS plans to convene a technical panel to review the MEI and all of its components—a provision that the AMA has welcomed in an official statement. CMS has proposed several changes to the MEI, including using data collected in the AMA’s Physician Practice Information Survey to update the MEI information—an approach that the AMA notes would increase weights for practice expenses and liability insurance. The association questions the wisdom of adopting MEI changes before the technical panel completes a more comprehensive review. Roat adds that the MEI rebasing does not bode well for hospital-based radiology practices that do not have equipment. Instead, it might favor imaging centers and other entities that do own their equipment themselves. Multiple Procedures Another Congressionally mandated change requires CMS to identify potentially misvalued codes. As a first step toward this goal, the agency plans to expand the multiple-procedure payment-reduction (MPPR) rule, which reduces technical-component payments for second (and subsequent) procedures performed by the same physician for the same patient on the same day by 25%. The current policy applies to CT, CT angiography (CTA), MRI, MR angiography (MRA), and ultrasound services within 11 families of codes, based on whether similar imaging modalities are used and whether the body parts involved are contiguous, according to CMS. Under the 2011 proposal, the MPPR would be applied even if different imaging services were provided (MRI and CT, for example) and if noncontiguous body parts were involved. The technical-component payment would also be reduced 50% for the second and subsequent procedures. This expansion would reduce payment for 20% more services, according to CMS. The AMA has stated that it has serious concerns about this proposal; it finds the 50% reduction unwarranted, since the multiple-procedure efficiencies involved are probably only the reduction of staff time by a few minutes that would be saved in patient reception and record retrieval. Kassing says, “We have a huge problem with the expansion of this and will be commenting on it heavily during the comment period.” CMS notes in the proposal that it also plans to examine whether the MPPR should be applied to the professional-component payment—a move that the ACR would strongly oppose. “This is a fair warning from them that this issue is going to come up again,” Kassing says. Roat says, “The exact impact this provision makes on your practice will depend on patient mix.” MMP queried a single radiology client, with 30 radiologists, that bills 600,000 codes annually. The practice performed 778 procedures on 590 patients on a single day; of those patients, 178 had more than one procedure done on the same modality. Eight patients had two procedures that crossed modalities. Equipment-utilization Rates In the proposed rule, CMS plans to implement a Congressionally mandated change in the equipment-utilization rate, increasing it to 75% for all diagnostic equipment costing more than $1 million, with this change being fully implemented on January 1, 2011. Under current payment rules, the equipment-utilization rate would have reached 90% after a four-year transition period that began in 2010. The provision applies to CT, CTA, MRI, and MRA. The 75% rate is better than the previous 90% rate, Kassing says, but neither approaches estimates from the RBMA, which conducted a survey that found a 54% average equipment-utilization rate nationwide and a 48% rate in rural areas. Comments on the 2011 MPFS are due August 24. There are other areas of concern to radiologists in the proposal, including the four that follow. Reducing time to submit claims: Claims must be filed no later than one year after the date of service, a change from the current 15–27 month filing date, according to the proposal. “I can’t tell you the number of times it has taken more than a year just to get a physician enrolled in the Medicare program,” Roat says. “My concern is that there is no mention of extenuating circumstances.” Updating high-cost supplies: CMS plans to develop a process that updates the costs of high-priced supplies on a regular basis. Many of the supplies noted in the proposal are those used in interventional-radiology procedures. CMS says that the General Services Administration can be used as a resource for pricing information; Kassing notes, however, that the prices that the government receives for its supplies may not be near the prices that individual physicians and practices have the ability to negotiate. New self-referral requirements: The PPACA requires physicians referring patients for MRI, CT, PET, and other exams/services to inform them, in writing, that the service is available from somebody other than the referring physician. Physicians must also provide a list of suppliers who furnish the service. In the rule, CMS proposes that the list include at least 10 suppliers located within a 25-mile radius of the physician’s office. Kassing says that this is something that the ACR supports. “Some patients may care and some may not,” she says, “but if you want to have a high-quality study done and have experience with another site, you should have a right to do that. This makes the process more open.” Physician Quality Reporting Initiative: CMS proposes several changes to the program, including reducing the threshold of claims-based reporting of individual measures from 80% to 50%. This should enable more physicians to qualify for incentive payments. Jane Cys is a contributing writer for ImagingBiz.com