New legislation looks to stop DRA cuts

Twitter icon
Facebook icon
LinkedIn icon
e-mail icon
Google icon

Congressional lawmakers have introduced new legislation designed to suspend for two years the payment cuts that have been instituted as part of the Deficit Reduction Act (DRA) 2005 which went into effect Jan. 1. The legislation was brought up by Representative Carolyn McCarthy (D-NY), and her colleagues Rep. Joseph Pitts (R-PA) and Rep. Gene Green (D-TX).

The bill, The Access to Medicare Imaging Act of 2007, would direct Medicare to stop DRA imaging payment reductions for two years. The legislation also would require that the Government Accountability Office (GAO) evaluate the impact of the DRA payment reductions on patient access and service issues, especially having to do with seniors in rural areas and others in areas considered medically underserved.

"Congress must put a halt to further payment cuts in medical imaging services for Medicare patients until the GAO can sort through just how this will affect Medicare patients' access to these life-saving services," said Rep. McCarthy regarding the bill. "Medical imaging is a standard of care for medical conditions that plague Medicare beneficiaries, such as stroke, cancer, and heart disease. Our legislation recognizes the importance of imaging services and puts the brakes on these cuts while the federal government studies the real impact of this poorly conceived policy."

The Access to Medical Imaging Coalition (AMIC) has placed special attention on this bill as it simultaneously released the results of a study by The Moran Company which shows that as a result of the DRA, reimbursement for imaging services in physician offices and imaging centers will fall some 18 to19 percent below total reimbursement for similar services provided in hospital outpatient departments.

"We believe it is imperative to ratchet-up the pressure on delaying the DRA imaging cuts," said AMIC Executive Director Tim Trysla. "The Moran report is further proof that these cuts are deeper and more lasting than Congress ever imagined. That's why we are very encouraged that Representatives McCarthy, Pitts, and Green and so many of their colleagues are sponsoring new legislation that would stop further implementation of the cuts while the GAO can assess the real-world effect on patients."

According to AMIC, the report calculates the differences in the two payment systems by factoring in a constant volume of utilization of procedures in both systems using 2005 data, including procedures in the office setting that are affected by DRA-05. It also adjusts for differences in how the two payment systems are structured and reimbursed, and it incorporates Medicare rate and policy changes for 2007. When these elements are considered, the estimated reduction in the total payment for imaging services in physician offices and imaging centers in 2007 will be approximately $1 billion deeper than prior to the DRA - roughly twice the amount estimated by the Congressional Budget Office when law was passed, AMIC said.

The Moran report also concluded that most imaging procedures affected by the DRA will be paid below the estimated costs of performing the service, for example:

  • In 2007, 89 percent of procedures that are capped by the DRA and for which complete data are available will be paid at rates less than the estimated cost of performing the service; and
  • In 2010, 99 percent of procedures that will be capped by the DRA and for which complete data are available will be paid at rates less than the estimated cost of performing the service.

"Everyone knows that Medicare has always paid below the true costs of providing many medical procedures, but this report reinforces the fact that the DRA is only making that worse," said Trysla. "The Moran report shatters the pre-DRA myth that total imaging payments for physician offices and imaging centers were wildly out of line with imaging payments in hospital outpatient departments."

For a copy of the new report visit