GAO says DRA saved $1.7B, industry questions lasting effects

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Controversial GAO report releases some stats on impact of DRA on imaging. Image Source: Cedars-Sinai  

The Centers for Medicare & Medicaid Services (CMS) saved $1.7 billion on medical imaging expenditures in the first year the Deficit Reduction Act (DRA) cuts were implemented, according to a report released Friday by the Government Accountability Office (GAO).

According to the Access to Medical Imaging Coalition (AMIC) however, the findings show that “CMS has reduced payments for imaging services beyond the intention of Congress as well as the budget scoring conducted by the Congressional Budget Office.”

The GAO examined the extent to which fees for performing imaging tests were affected by the OPPS cap in 2007 and analyzed trends in expenditures and utilization for physician imaging services under Medicare fee-for-service (FFS) program through 2007.

The report found that the OPPS cap reduced the fee for the performance of about one in four physician imaging tests overall, and fees for advanced tests were more likely than other imaging tests to be paid at the OPPS rate. All advanced imaging modalities had a higher percentage (about 65 percent) of tests paid at the OPPS rate than other imaging modalities (about 13 percent). In particular, nearly all MRIs and CTs were paid at the OPPS rate.

Under a provision in the DRA, Medicare fees for certain imaging services covered by the physician fee schedule may not exceed what Medicare pays for these services under Medicare's hospital outpatient prospective payment system (OPPS).

Physician organizations and imaging manufacturers have suggested that reduced fees as a result of the cap may inhibit physicians' willingness to provide imaging services for Medicare beneficiaries, which in turn could affect Medicare beneficiary access to such services.

Among advanced imaging tests, the fee reductions because of the OPPS cap varied extensively, according to the report. For example, among the three most commonly performed MRIs subject to the cap, fee reductions ranged from about 21 to 40 percent.

The GAO found that from 2000 through 2006 both expenditures for and utilization of Medicare physician imaging services increased, but in 2007 expenditures declined while utilization continued to rise. From 2000 to 2006, on a per-beneficiary basis--a measure which accounts for the change in size of Medicare's FFS population--expenditures increased 11.4 percent per year and in 2007 declined 12.7 percent.

The implementation of the OPPS cap had the greatest impact on the decline in Medicare physician imaging expenditures in 2007, although other factors also contributed to this trend. Per-beneficiary utilization rose 5.9 percent per year from 2000 to 2006 and continued to increase in 2007, although at a slower rate of 3.2 percent.

As a result of its research, the GAO concluded that “although implementing the OPPS cap raised concerns that reduced fees might curtail beneficiary access to physician imaging services, our analysis suggests that this did not occur in 2007. Although spending for imaging services declined from 2006 to 2007, utilization of tests increased…more for imaging tests subject to the OPPS cap than for imaging tests not subject to the cap.”

However, organizations like AMIC and the Medical Imaging & Technology Alliance (MITA) remain unconvinced about the long-term effects of the cuts.

“Even at the congressionally-intended payment reduction levels, the DRA cuts posed a threat to patients' ability to access imaging services.  Now with the GAO's assessment revealing deeper cuts than Congress intended, we are increasingly concerned about the consequences Medicare cuts are having on seniors' ability to receive life-saving diagnostic and therapeutic services,” said Tim Trysla, executive director of AMIC.

The GAO found that the utilization of advanced imaging has flattened—a trend that MITA said shows not only the deep nature of the first-year payment cuts to physicians, but also underscores the value imaging services bring to today's healthcare.