Sinking Reimbursement: A Survivors Guide

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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 to vex physicians and politicians as Congress has yet to develop a permanent fix.

Meanwhile, private payors take their cues from CMS, and many have or plan to enact similar reductions in reimbursement.

With cuts coming from all directions, radiologists’ revenue is likely to continue on a downward slide. Calculating the impact of that slide, however, is not an exact science. “There is a lot of uncertainty in this environment. We can calculate the impact of what we know about, but we don’t know how far the cuts will extend or if or how the MPPR will expand to other modalities,” says Bohl. Preparation, education and advocacy may be radiology’s best defenses.

Defense mechanisms

The gut reaction to the prospect of ongoing reimbursement cuts may be to focus on efficiency. “The income per procedure will go down, so it becomes a question of can the practice perform more procedures on average,” says Bohl.

Allen counters, “I am not an advocate of hunkering down, going to a dark room and reading more cases faster and faster. In the long run, that risks turning radiology into a commodity.”

Some practices have turned to another quick fix, which disturbs Allen. That is, they are lowering fees in an attempt to attract volume. There are two problems with this solution, says Allen. First, hospitals can shop for the lowest bidder. And if a practice’s services are limited to low-cost interpretation, its runs the risk of being outsourced.

The more reasonable approach may be a method that balances efficiency with value-added services. “There are opportunities to mine efficiency to recoup [some of the income lost by cuts],” Bohl says. There is some low-hanging technical fruit that radiology practices may not have fully leveraged.

“Many practices are still moving down the pathway of optimal informatics deployment,” Bohl continues. For example, although many practices have adopted voice recognition, there are opportunities to optimize the technology to a more significant degree than some practices do. “Radiologists can implement templates to become more efficient. It takes time on the front end to build and hone them. However, a few seconds here and there over weeks and months can add up for an entire practice,” explains Bohl.

Similarly, a wholesale shift to a paperless practice creates new opportunities for efficiency and allows practices to move work to wherever radiologists are located. Finally, on the more distant horizon, systems that seamlessly share image data between facilities could cut down on phone calls, CDs and the current inefficiencies associated with image distribution across organizations.

“Reporting and image distribution are the crux of what a radiologist does in a day that produces income. The goal is to read and report on exams in an efficient, effective and quality manner,” says Bohl.

However, radiologists need to avoid the trap of narrowly focusing on reading and reporting. At the local level, Bohl suggests radiologists join hospital committees and build relationships, which can help influence the direction of the hospital and also educate other stakeholders about the role of radiology in the care cycle.

There may be other opportunities to mitigate the effects of eroded income, says Allen. “The ACR is exploring ways for radiologists to garner reimbursement for non-interpretative work such as utilization management, decision support or radiation safety. There are opportunities for radiologists to make themselves irreplaceable.”

Again, informatics could be the enabler. For example, new tools could embed ACR Appropriateness Criteria into order entry software, which would facilitate radiologists’ role in utilization management and might allow them to collect any value-added payments linked with utilization management.

Finally, radiology practices need to practice vigilant advocacy.

For example, in August 2010, Blue Cross Blue Shield of Massachusetts attempted to enact an MPPR policy that was far more stringent than the existing national policy and included 50 percent reductions to the technical and professional components of CT, MRI and ultrasound. The Massachusetts Radiological Society partnered with the ACR to thwart the policy. (The professional component reduction was placed on hold in June 2011, but may be re-implemented in light of CMS’ policy.) Similarly, an ACR legal team is attempting to overturn a new Recovery Audit Contractor policy in Ohio that requires radiology practices to document that the exam they performed influenced the patient’s care.

On the national level, ACR is focusing on H.R. 3269, the Diagnostic Imaging Services Access Protection Act, which would repeal the MPPR to the professional component of Medicare reimbursement.

Ongoing threats to reimbursement have become the de facto reality in radiology. Radiologists need to employ multiple strategies to combat the cuts. These include building knowledge, awareness and advocacy and mining technology wisely to improve efficiency.