ACR Asks CMS for Reimbursement Cut Dampening

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 - Reimbursement Cuts

In a comment letter on the final 2014 Medicare fee schedule for physicians, the American College of Radiology (ACR) pointed out once more the cumulative effect on imaging reimbursement of various recent legislative and policy changes and urged the Centers for Medicare and Medicaid Services (CMS) to adopt a “dampening” policy to limit the total amount a specific procedural code could be reduced in a given year.

According to the analysis presented by the ACR in its letter on the 2014 Medicare Physician Fee Schedule (MPFS) Final Rule, some specific CT procedures will be cut in excess of 22% because of the impact of the creation of separate cost centers for CT and MR. CMS created the new cost centers using data supplied by hospitals that the ACR maintains is inaccurate and drops the Outpatient Prospective Payment System (OPPS) rate below the MPFS rate for certain procedures. This in turn activates a provision in the Deficit Reduction Act of 2005 (DRA) that requires CMS to pay Medicare physicians at the OPPS rate if that rate is below the MPFS rate, and the results are steeper cuts for office-based medical imaging than CMS may have intended.

In addition to dropping reimbursement for some procedures to the now lower OPPS rate, radiologists face reductions related to how CMS calculates physician practice expenses, the ACR pointed out.

“The practice expense methodology, for a number of reasons, has been unfair to radiology for several years,” the ACR’s letter asserted.

Problem cited by the ACR include flaws in the Physician Practice Information Survey (PPIS) survey that led to an invalid practice expense per hour (PE/HR) being assigned to radiology, the implementation of the 90% equipment utilization rate, interest rate changes, and reductions from the 2014 Medicare Economic Index (MEI).

The College did note that CMS elected not to expand the Multiple Procedure Payment Reduction (MPPR) methodology to further reduce imaging reimbursement and thanked it for its work on updating some Relative Value Units (RVUs). However, in general comments, it noted that it was “extremely concerned by the significant payment reductions for image-guided breast biopsy procedures, as well as for certain CT and MR services.”

For example, for an MR of the brain (CPT 70551), the technical component payment in 2014 will drop from $466.90 to less than $200 if it is the first study and less than $100 if it is a second study done in the same day (an MPPR cut). “A payment of less than $100 for a study performed on a $1.6 million piece of equpment is clearly too low and does not pay physicians for the costs they incur treating Medicare beneficiaries,” the ACR noted in the letter.

According to the ACR, a dampening policy that limits how much reimbursement for any one code could be cut in a single year would help protect patients’ access to outpatient imaging in situations where the cumulative effect of multiple independent reimbursement cuts might result in a rate too low for providers to continue offering the service.

Read a PDF of the full ACR comment letter.