MedPAC recommends imaging cuts, preauthorization

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In its June report to Congress, the Medicare Payment Advisory Commission (MedPAC) recommended reduced reimbursement, payment bundling and prior authorization for medical imaging services.

MedPAC’s four recommendations were:

  • Accelerate and expand efforts to package discrete services in the physician fee schedule into larger units for payment.
  • Apply a multiple procedure payment reduction to the professional component of diagnostic imaging services provided by the same practitioner in the same session.
  • Reduce the physician work component of imaging and other diagnostic tests that are ordered and performed by the same practitioner.
  • Establish a prior authorization program for practitioners who order substantially more advanced diagnostic imaging services than their peers.

In the report, MedPAC noted, “Physician investment in diagnostic testing equipment has contributed to rapid growth of imaging and other tests under the physician fee schedule and has resulted in a high level of utilization that likely includes unnecessary services.”

The commission explained that its first three recommendations would improve payment accuracy as well as the equity of the physician fee schedule and reduce the financial incentives for physicians to invest in ancillary services.

MedPAC proposed that the Relative Value Scale Update Committee (RUC) and CPT Editorial Panel expand efforts to create codes and suggested that the groups consider:
• Reviewing and bundling codes that are provided together less than 75 percent of the time but more than 50 percent of the time;
• Creating bundled codes that include different types of services that are frequently performed at the same time, such as nuclear medicine studies and cardiovascular stress tests or evaluation and management services and certain diagnostic tests; and
• Combining radiopharmaceuticals with their associated imaging services (e.g., packaging myocardial perfusion studies with their related radiopharmaceuticals), as is done in the outpatient prospective payment system.

The fourth recommendation targets practitioners who order a substantially larger number of advanced imaging services than other physicians who treat similar patients. Under this approach, Medicare would require physician outliers to participate in a prior authorization process for imaging.

In its report, MedPAC confirmed that the growth of advanced imaging is flat, providing fodder for the Medical Imaging & Technology Alliance (MITA) to call on Congress to reject the commission’s recommendations.

“While MedPAC has confirmed that the growth in utilization of advanced imaging services was flat from 2008 to 2009, it continues to recommend dramatic reimbursement cuts as well as a prior authorization program that would result in reducing seniors’ access to imaging services,” said Dave Fisher, executive director of MITA. “Deep cuts to imaging services that are not growing will impede patients’ access to imaging services which are central to the standard of medical care.”

In 2008, the Department of Health and Human Services (HHS) noted that a prior authorization program could be “inconsistent with the public nature of the Medicare program,” since such programs rely on private companies using proprietary systems to deny care prescribed by a physician. HHS also noted that the Medicare appeals process guaranteed to every beneficiary could overturn a “high proportion” of denials, rendering the policy ineffective.

In addition, MITA argued that cutting reimbursements to physicians in office settings has the potential to encourage physicians to refer their Medicare patients to higher cost hospital settings.

The organization referred to recent data that showed prior authorization is ineffective. A study in the June issue of the Journal of the American College of Radiology found that relying on radiology benefit managers (RBMs) to conduct prior authorization for advanced imaging increases costs and red tape, placing a burden on physicians and potentially causing delays in treatment.

Alternatives such as promoting the use of evidence-based, physician-developed appropriateness criteria for imaging services can reduce utilization and spending without the unnecessary bureaucracy of prior authorization or the blunt instrument of reimbursement cuts, MITA stated.