CBO report makes ACR cautious of imaging cuts. Image Source: Beach Medical Imaging

A Congressional Budget Office (CBO) report for the Obama Administration and the new 111th Congress contains several policies for healthcare reform recommendations that directly impact how medical imaging services are delivered and reimbursed, according to the American College of Radiology (ACR).

The new policies represent an effort to cut costs associated with medical imaging. Despite past efforts to cut costs and improve quality, the college said that “medical imaging’s rapid rate of growth remains a target for lawmakers as Congress gears up for what is sure to be a historic push to reform the nation’s healthcare system.”

One CBO option is for legislators to require prior authorization for advanced imaging services under Medicare. The Government Accountability Office has recommended prior authorization and other front-end administration, such as radiology benefit management firms used by private payors, as a way to reduce spending on imaging services. The CBO estimated that the tactic will cut imaging costs to Medicare by $200 million over five years and $1.1 billion over 10 years.

The ACR has affirmed plans to oppose any Medicare preauthorization policy and instead advocate for greater use of appropriateness criteria.

Another CBO option is to change the equipment utilization rate factor, or technical component, in the calculation for practice expense for advanced imaging procedures from its current 50 percent to either 75 or 95 percent. The ACR said that this would have the effect of lowering the technical component reimbursement for those services.

A change to 75 percent would save Medicare $1 billion over five years and $1.9 billion over 10, while a change to 95 percent would save $1.5 billion over five years and $2.9 billion over 10 years. The Medicare Payment Advisory Commission is expected to recommend the utilization rate be moved to 90 percent in its March 2009 report.

The CBO described several options for Medicare physician payment reform. The most ominous for radiology would create service-specific spending targets with imaging and tests in its own category, according to the college.

After a payment freeze in 2010 to avoid the 20 percent reduction called for by the current Sustainable Growth Rate formula, each service category would be subject to its own payment update, calculated by its rate of growth. Under the system, the ACR said that imaging would be subjected to a five percent annual reduction based on current growth trends.