AHRA: Flawed fee schedules create 'race to the bottom'

MINNEAPOLIS—Changing fee schedules have been chipping away at radiology payments on multiple fronts, creating a triple threat that looks to continue to reduce charges in the coming years, according to a presentation from Ezequiel Silva III, MD, of University of Texas Health Science Center at San Antonio, delivered at the annual meeting of AHRA.

The inpatient prospective payment schedule (IPPS) sets payment for the operating costs of inpatient hospital stays under Medicare Part A based on prospectively set rates, explained Silva. Within this system, cases are categorized into diagnosis related groups with payment rates adjusted by the resources used, which the hospitals report.

The problem, according to Silva, is the quality of reporting has been terrible, with only 4 percent of providers accurately capturing the appropriate cost data for CT and MR, mainly due to the fact that hospitals treat scanners as hospital overhead instead of radiology specific equipment.

“It’s staggering. The data are just not there,” said Silva.

The result of this, under current IPPS proposals, is that a CT of the brain would pay roughly the same as a skull x-ray.

Bundling represented the next threat as Silva shifted to the hospital outpatient prospective payment schedule (HOPPS). Dubbing it one of the “greatest transformations in our code structure since the creation of the CPT system,” he said the new codes describing multiple studies often reporting together is also eroding payments.

The prime example is a CT scan of the abdomen and pelvis, which pre-2011 paid $418 without contrast and $697 with contrast, and fell to $193 and $300 for noncontrast and contrast scans, respectively, after being bundled.

Problems with hospital payments are now spilling over to physician office payments, explained Silva. Because the Deficit Reduction Act of 2005 caps physician office payment at the lower of the HOPPS and Medicare Physician Fee Schedule amount, HOPPS payment is determining office payment, creating a “race to the bottom.”

Silva closed with a call to action, asking for improved inpatient cost reporting and more vigilance with regard to payment changes across settings. He also called for practices to update their charge master each year.