Image source: www.whitehouse.gov

Data released by the Radiology Business Management Association (RBMA) this week demonstrated that the use rate of diagnostic imaging equipment in an outpatient setting is approximately one half the amount claimed by the Medicare Payment Advisory Commission (MedPAC) and the Administration of President Barack Obama.

The inflated use rate touted by MedPAC is being utilized as part of an effort by Obama's Administration to slash Medicare reimbursement for diagnostic imaging in an outpatient setting.

Obama recently recommended that the Centers for Medicare & Medicaid Services (CMS) base its reimbursement formula on a 95 percent utilization rate for advanced imaging equipment. MedPAC has recommended a 90 percent utilization rate for diagnostic imaging equipment that costs more than $1 million.

When calculating its reimbursement formula for diagnostic imaging services, CMS currently assumes that imaging equipment is in use, on average, 50 percent of the available time. The RBMA data suggest the current Medicare utilization rate is similar to the actual rate at which imaging equipment operates.

Neither rural nor urban non-hospital diagnostic imaging providers operate equipment at rates anywhere near the levels the President or MedPAC recommend CMS use as a basis for Medicare reimbursement, according to the RBMA's analysis.

The data show, using current Medicare assumptions, that imaging equipment in rural regions of the country operates only 48 percent of the time an office is open, while equipment in non-rural areas operates 56 percent of the time a center is open for business. The survey assessed 261 imaging machines in 46 centers, both rural and urban.

RBMA stated that increasing the utilization assumption to a level higher than actual use rates would result in a severe cut for imaging reimbursements that will impair access to diagnostic imaging services. These cuts would have a devastating impact on patients in rural regions of the country, causing congestion and delays at the point of care, and forcing physicians to pull back services in those communities.

"If policymakers want Medicare's reimbursement formula to mirror actual imaging equipment utilization rates in both urban and rural practices, our data demonstrate CMS' current use rate assumption is more accurate than what Congress and the Administration are proposing," said Michael Mabry, executive director of RBMA. "Since MedPAC's utilization rate survey was based on only six urban regions, we understand policymakers' need to continuously collect accurate use rate data to inform their reimbursement decisions. RBMA is committed to collecting and providing those data on an ongoing basis."

The Access to Medical Imaging Coalition (AMIC) contends that MedPAC's 90 percent utilization rate change recommendation is based on a deeply flawed survey. Importantly, MedPAC's recommendation to change the utilization assumption is based on data collected prior to the severe cuts that resulted from enactment of the Deficit Reduction Act of 2005 (DRA), and does not consider the impact on rural providers.

MedPAC's survey was limited to six urban areas, two modalities (MR and CT), and to providers operating in 2003. The survey merely provided a snapshot of equipment use in 2005 among 80 providers, according to RBMA and AMIC.

MedPAC itself even cautioned against using its survey to determine equipment use rates. According to transcripts of an April 19, 2006 meeting, MedPAC said: "This survey is a first step...It was not nationally representative and it was not designed to determine equipment use rates. Its intent was to assess the feasibility of getting use rate data from the survey."

CMS later agreed that that MedPAC's survey was unsound.

In its 2007 proposed physician rule, CMS did not alter the equipment utilization assumption, stating: "We do not believe we have sufficient empirical evidence to justify an alternative proposal [to the 50 percent utilization assumption.]"

"Spending on advanced imaging has decreased significantly since 2005 and imaging use has essentially flattened," said Timothy Trysla, executive director of the AMIC. "Any further deep imaging reimbursement cuts will severely disrupt patients' access to diagnostic services. Bureaucratic red tape including long waits for appointments, delays in the waiting room and patients driving long distances will be typical if Medicare spending is reduced by levels proposed by President Obama or MedPAC."