Reimbursement Update

The downs are outdoing the ups in radiology and radiation oncology reimbursement these days, but smart administrators can often find ways around falling numbers. Keep your ear to the ground and support professional organizations that can make a difference.

The Centers for Medicare and Medicaid Services (CMS) published preliminary rules for 2005 reimbursement this summer. While the Feds haven't dotted their i's and crossed their t's, it is time to prep for the upcoming changes. Some proposed rules could dramatically impact payment for and utilization of imaging technologies. PET, for example, has been losing ground in recent years and is threatened by a decrease of nearly 40 percent in the upcoming year if a preliminary option is implemented.

Other technologies, including CT angiography, intensity modulated radiation therapy (IMRT) and proton beam therapy, stand to lose ground as well. CMS plans to move these procedures to different clinical APCs (ambulatory patient categories). Many of the changes are based on flawed early data from hospitals, says Diane Wurzberger, director of health policy and reimbursement for Siemens Medical Solutions, (Malvern, Pa.) and will result in a significant decrease in reimbursement rates if implemented.

And let's not forget private payors. Many are proposing and making changes that could affect providers across the enterprise. Increased private reimbursement for digital mammography and separate payments for CAD could become ancient history over the next few years. Private payors also are scrutinizing contiguous CT scans, 3D reconstructions, 0.3 T MRI scans and teleradiology payments.


This summer CMS put PET reimbursement for Alzheimer's on the books. Michael Weiner, M.D., director of the Center for Imaging of Neurodegenerative Disease at the VA Medical Center (San Francisco) and chair of the Alzheimer's Association Neuroimaging Work Group, says, "This is great news for Alzheimer's patients." Although the radiology community has been waiting for PET reimbursement for Alzheimer's for a few years, this initial coverage represents a mere toe in the door. Weiner explains, "A very limited subset of patients will be eligible for PET scans under this ruling." That is, patients must have had a complete clinical workup and meet the diagnostic criteria for both Alzheimer's and frontotemporal dementia with an uncertain evaluation for the clinical cause. And the PET scan should be helpful in changing the patient's treatment or management.

Weiner says The Alzheimer's Association (Chicago) does not believe broad reimbursement for Alzheimer's is appropriate at this time; if there was broad reimbursement, PET scanning could be overused as a first line diagnostic tool. A single imaging exam cannot be used for a diagnosis of Alzheimer's, asserts Weiner.

There could be more positive news about the PET-Alzheimer's connection in the future. The Alzheimer's Disease Neuroimaging Initiative, a $60 million endeavor to research MRI, PET and biomarkers to help develop better clinical trials, will yield tremendous information about the role of PET in Alzheimer's, says Reiner.

But the positive PET news ends with the Alzheimer's addition. PET has seen reimbursement drop from approximately $2,100 when it was first approved to about $1,450 for a scan and $324 for FDG in 2004. CMS is considering another round of hefty cuts and has put three options on the table for PET reimbursement in 2005. These are:

  • Option one - leave payments at $1,450 and reduce FDG reimbursement to $220. This option retains the current APC and would allow CMS to continue to collect additional claims data.
  • Option two - reclassify the APC and slash PET reimbursement to $898 and FDG reimbursement to $220.
  • Option three - reclassify the APC and drop PET reimbursement to $1,150 and

FDG reimbursement to $220. This is likely a transitional option and could lead to another drop in 2006.

Wurzberger says industry is supporting option one as the alternates seem to be based on inaccurate claims data. One more year of data gathering could help CMS develop a more accurate payment. Indeed, hospital, physicians, vendors and professional organizations agree that further cuts in reimbursement could limit access to the technology and threaten the viability of newer PET providers.

Thomas Dehn, MD, chief medical officer for National Imaging Associates, a radiology benefits management company in Hackensack, N.J., adds to the list of PET woes. "The draft guidelines include dramatic cuts in reimbursement for cardiac PET, making it pretty much equivalent [financially] to SPECT." Dehn predicts that the proposed cut could instigate competition between physician proponents of cardiac PET and SPECT.

On the potentially positive side, PET-CT will be in the system for the first time in 2005. Pricing will be based on several levels: head, neck to thigh and whole body. Currently, the American College of Radiology (ACR of Reston, Va.,) is researching how the exam should be priced.


"Diagnostic mammography is holding its own right now," confirms Gerald Kolb, president of Breast Health Management (Bend, Ore.) The CMS preliminary rules include increases in payments for diagnostic and screening mammograms for hospitals in 2005. Pam Kassing, senior director of economic and health policy for ACR, says the increase in the technical component for diagnostic mammography in the hospital outpatient setting is good news because it remedies reimbursement rates based on cost data that was far too low. In fact, diagnostic mammograms have been reimbursed at lower rates than screening mammograms despite the additional time and resources required for diagnostic mammograms. "This won't cover their costs, but it will add to revenues," adds Kolb. The rules also include coverage for CAD for diagnostic mammograms.

Unfortunately, it literally took an act of Congress - the Prescription Drug Act - to force a 1.5 percent increase in mammography rates in 2004 and 2005. Kolb says, "It looks like there will have to be Congressional relief again to maintain these increases in the future."

While mammography nudged ahead, other breast imaging modalities didn't fare as well. Although demand and clinical confidence for screening breast ultrasound continues to increase, CMS has not yet established a code for it. The result is that screening breast ultrasound isn't paid for by either Medicare or private payors. Consequently, most physicians who have incorporated screening breast ultrasound in their practice require patients to pay. The American College of Radiology Imaging Network (ACRIN) trial 6666, which is evaluating screening breast ultrasound, holds a ray of hope for a code and eventual reimbursement, but results will not be available for at least five to six years.


CMS officially welcomed virtual colonography in July with a category three CPT code, a temporary code that allows CMS to gather data about an emerging technology. Currently, Medicare carriers price and reimburse virtual colonography independently at the local level. Over the next year, the ACR plans to focus on virtual colonography and try to stabilize coding and payment for the exam.

In the private world, a few payors cover virtual colonography such as one HMO in Madison, Wis., with some limiting reimbursement to cases where a traditional endoscopy fails. Dehn predicts, "Reimbursement for virtual colonography for diagnosis [vs. screening] is coming, but it could be slow process."

Nearly 150,000 Americans are diagnosed with colorectal cancer each year, making it the third most frequently occurring cancer in the United States and the second most common cause of cancer deaths. While colorectal cancer has the highest mortality rate of all cancers, it can also be prevented if detected and treated early. The American College of Radiology recommends that all 74 million Americans over the age of 50 be screened annually for colon cancer as well as younger, at-risk individuals with a strong family history. Despite its advantages, the majority of the population avoids traditional, invasive colorectal screening for its unpleasantness - ACR estimates that only 10 to 12 million Americans are screened each year. The hope is that virtual colonography would increase screening rates significantly.


The world of CT angiography is pretty daunting these days, too. ACR's Kassing explains, "CT angiography is always a concern. It isn't paid correctly in the hospital or outpatient system. That is, it's paid less than a CT scan despite requiring more work and more resources." In fact, for several years, CT angiography has bounced around with multiple APCs in the CMS system. Before 2001, CT angiography was reimbursed using the standard CT code and a 3D reconstruction code for post processing. The following year, CMS granted CT angiography a new "combined" CPT that eliminated reimbursement for 3D post-processing. In 2003, CT angiography received yet another new code, paying less than a standard CT. Wurzberger says the claims data are likely flawed and inaccurate, possibly because there have been so many code changes. Siemens and other vendors are advocating a return to the two-code (scan plus reconstruction) payment for CT angiography. Stay tuned.


For the last few years, intensity modulated radiation therapy (IMRT) has been reimbursed under new technology codes. This year, however, CMS proposes shifting IMRT to a clinical APC with cuts in reimbursement for treatment delivery and radiation therapy dose planning. Once again, experts opine that the changes seem to be based on flawed data, so hospitals and vendors are pushing to leave IMRT in its current category for one more year to allow CMS to gather more robust data.

In fact, James Hugh, senior vice president at American Medical Accounting and Consulting (Atlanta), offers one solution to the flawed data issue. "When CMS does make a change in payment in the first year it becomes effective, hospitals are very slow to change and the hospitals in the real world will not be billing with new methodology until the second year," Hugh points out. He suggests that CMS only use second year data to more accurately capture information.

CMS also is looking at cuts in proton beam therapy payments in 2005. The proposed cuts again entail moving the APC code for intermediate and complex procedures, which would drop reimbursement from $950 to $678.


Private payors are continuing to rein in payments - with radiology taking a significant hit. Take, for example, PET-CT. National Imaging Associates' Dehn confirms, "Most carriers aren't going to pay for the additional CT scan in a PET-CT exam. Many of our clients don't even bill for the CT side of the scan." Some, however, do bill under the CPT codes for both PET and 3D reconstruction, which increases the total payment.

Dehn predicts that charges for 3D reconstruction could become a contentious issue.

Other changes also are in the works for CT, with more payors indicating an interest in graduated payments for the technical component of contiguous CT studies.

Dehn shares other tidbits on the reimbursement horizon. "Health plans are suggesting that they will not reimburse MRIs on a 0.3 T magnet or that they will pay at one-third of the rate of a 1.5 T magnet." Thus, practices considering a 0.3 T MRI purchase, may want to research the local reimbursement landscape before investing in a new scanner - even considering the marketing opportunities directly to patients.

Teleradiology also in on the radar screen. Dehn confides, "Our customers aren't happy that 30 percent of the films at some of the finest hospitals in the country are read by radiologists in another country." Whether or not the discontent translates into cuts in payments remains to be seen, but some payors are discussing the possibility of reduced payments for offshore reads.


How can radiologists, radiation oncologists and administrators initiate positive changes in the reimbursement world?

  • National Imaging Associates' Dehn opines, "As long as [physicians] can hold quality steady, I suggest trading volume for price. Some insurance carriers are steering imaging cases to groups that accept reduced payment in exchange for increased volume."
  • Stay informed and involved. Professional organizations and trade magazines are the best sources of information about proposed changes and their impacts on medical practice. Be prepared to be political by writing to Congress and contributing to relevant political action committees (PACs). Professional associations can have an impact. When Blue Cross of Illinois threatened to treat full-field digital mammography as experimental and deny claims, radiologists and industry dug in their collective heels and secured payment - at analog rates.
  • Accurate data are key. Providers need to document all procedures thoroughly and pursue the appellate process whenever they are owed money, Breast Health Management's Kolb says. ACR's Kassing adds, "Make sure private payors understand the costs of imaging procedures. Also, make sure that private insurers don't undercut the Medicare physician's fee schedule."
  • Kolb concludes, "It's always easier to control costs than reimbursement. One of the best ways to control costs is to increase efficiency."