Sinking Reimbursement: A Survivors Guide

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sinking-money_1335535900.jpg - Sinking money

There is a sense in the imaging community that the Centers for Medicare & Medicaid Services (CMS) and private payors have taken a hatchet to radiology reimbursement. What started as a relative trickle in the early part of the decade, via a 25 percent cut in the technical component payment of the multiple procedure payment reduction (MPPR), has expanded into a deluge in the last 18 months. Indeed, professional payments, once immune to the MPPR threat, are being excised. Read on for Health Imaging’s synopsis and survivors’ guide to coping with the cuts.

Cause and effect

“One of the biggest challenges related to reimbursement is communicating to physicians what is going on and why reimbursements are being cut,” says Michael A. Bohl, RT, MHA, president of Radiology Business Management Association (RBMA) and executive director of Radiology Group in Davenport, Iowa.

There are multiple reasons why radiology is particularly susceptible to payment cuts, says Bibb Allen Jr., MD, chair of the American College of Radiology (ACR) commission on economics and diagnostic radiologist at Trinity Medical Center in Birmingham, Ala.

The Patient Protection and Affordable Care Act (PPACA) authorized, and perhaps, emboldened CMS, by instructing the agency to find and adjust misvalued medical services. At the same time, the Relative Value Scale Update Committee (RUC) is revaluing low relative value unit exams, such as chest x-rays and EKGs, and revaluing a number of services that have never been valued before. It is the equivalent of a perfect storm for radiology.

The perception that radiology is a target is at least somewhat rooted in reality. When policymakers realized that radiology volume was experiencing disproportionate growth among the Medicare population compared with other medical services in the early part of the decade, they honed in on the specialty. “Radiology has had more codes brought forth for revaluation in this [revision] process than any other specialty,” wrote Ezequiel Silva III, MD, of South Texas Radiology Group in San Antonio, in an article in January’s Journal of American College of Radiology. The reasons for the lopsided attention extend beyond imaging utilization.

CMS and RUC rely on screens to capture services reported together and combinations of high utilization and high expenditures. The radiology coding structure uses a component system in which studies, such as a CT of the chest, abdomen and pelvis and myocardial perfusion exams, have multiple codes. When a study has multiple codes, the screening program flags the exam. “From the CMS perspective, why not have one code?” asks Allen.

The Medicare Payment Advisory Commission (MedPAC) and CMS opted to treat the perceived bundling problem by suggesting a 50 percent MPPR to the professional component of CT, MRI and ultrasound exams in June 2011.

Radiology scored a pyrrhic victory, says Bohl, when the organizations modified their recommendations to a 25 percent cut. The switch was based on a massive lobbying effort by ACR, including an analysis that put accurate professional payment reduction based on duplicate work in the 5 percent range for most modalities, based on a study in the September 2011 issue of the Journal of American College of Radiology.

MedPAC’s recent acknowledgment that spending on imaging services declined 2.5 percent in 2010 further fuels radiologists’ collective frustration.

The RUC also is examining services that it had never valued, including many radiology codes. In the process, many codes have maintained their previous values, but there is always a chance of a cut, says Allen. For example, non-enhanced CT exams of the chest saw a 10 percent reduction in 2011, which continues in 2012.

Another reason for the relatively large target on radiology’s back is the specialty’s disproportionately low number of CPT codes. Radiology has 75 codes for abdomen and pelvis exams. In contrast, surgery has 777 abdomen and pelvis codes, so utilization appears disproportionately higher in radiology.

There is subtext beneath the reductive calculations, says Allen. “There is the perception that specialists are doing better financially than primary care, and MedPAC is concerned about that.” This perception helps explain MedPAC’s proposal to fix the sustainable growth rate (SGR) formula in September 2011. At the time, MedPAC recommended that specialists take a 17 percent reduction in payments, while primary care payments stayed flat. The SGR formula continues