CMS physician fee rule could cut imaging payments up to 38% in 2010

The Centers for Medicare & Medicaid Services (CMS) Friday announced final changes for policy and payment rates during the 2010 calendar year, which, if implemented, could cut by up to 38 percent the amount doctors will receive when they use medical imaging equipment for procedures such as MRI and CT scans. The rule affects more than one million physicians and non-physician practitioners who are paid under the Medicare Physician Fee Schedule.

CMS also finalized its proposal to change the agency's formula for calculating the per-procedure cost of diagnostic medical equipment worth more than $1 million. The proposal would assume that all diagnostic equipment with an acquisition cost greater than $1 million is used 90 percent of the time an office is open, thus driving down the practice expense relative value units for services using that equipment. If a healthcare reform bill passes, this rate could be reduced. Yet, if the 90 percent sticks, MR and CT services will be subject to payment sets based on this utilization assumption.

As required by current law, the final rule includes a 21.5 percent reduction in the sustainable growth rate (SGR) of the Medicare Physician Payment as of Jan. 1, 2010. As in previous years, Congress is expected to pass a one- to two-year fix, which is currently being played out in the Senate and the House. Also, CMS finalized its proposal to remove physician-administered drugs from the accumulated SGR debt, which makes a fix to SGR less expensive.

If Congress does not implement a legislative fix to the SGR, the combined cuts for medical imaging could total up to a 38 percent reduction, based on an earlier analysis by the Cardiology Advocacy Alliance. 

“The Administration tried to avert the pending fee schedule cut in the FY 2010 budget proposal that it submitted to Congress, and remains committed to repealing the SGR,” said Jonathan Blum, director of the CMS Center for Medicare Management. “While this decision will not affect payments for services during CY 2010, CMS projects it will have a positive effect on future payment updates.”

In one of the more devastating cuts, CMS decided to bundle codes together for SPECT/myocardial perfusion imaging, which was previously reported with multiple codes. In 2010, SPECT/myocardial perfusion imaging studies including wall motion and ejection fraction will be reported with a single code.

CMS decided to reduce the payment for myocardial perfusion imaging as part of this rule by reducing both the physician work value and the practice expense value. Also, because there is a new code for the service, CMS is not applying the four-year transition of the practice expense cuts and instead is using the fully implemented value for 2010—resulting in a 36 percent cut.

CMS also updated the malpractice relative value units (RVUs) with data from a new survey of specialty-level malpractice premiums. In addition, CMS has proposed a new method for determining malpractice RVUs for technical component services. The proposed new malpractice RVUs could reduce cardiology payments by 1 percent.

The agency also is implementing a requirement that suppliers of the technical component of advanced imaging services be accredited beginning Jan. 1, 2012. The accreditation requirement will apply to mobile units, physicians’ offices and independent diagnostic testing facilities that create the images, but will not apply to the physician who interprets them. CMS said it will address suppliers’ accountability, business integrity, physician and technician training, service quality and performance management through additional guidance.

The final rule with comment will appear in the Federal Register on Nov. 25. CMS said it will accept comments on designated provisions of the final rule with comment period until Dec. 29, and will respond to all comments at a later date. Unless otherwise specified, the new payment rates and policies will apply to services furnished to Medicare beneficiaries on or after Jan. 1, 2010.