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