The proposed 2014 Medicare Physician Fee Schedule1 (MPFS) and Hospital Outpatient Prospective Payment System2 (HOPPS) rules have both been released, and the outlook for radiology is dim, according to Cynthia Moran, assistant executive director for government relations and economics at the ACR®. “The only good news—if you can call it that—is that CMS no longer appears to be targeting only radiology,” Moran says. “It used to be that it was seeking to take from the specialties and give back to primary care, but now, it’s not even doing that. It’s just lowering how much money is spent as much as it can.”
For instance, Moran points to a provision in the proposed 2014 MPFS that would change the methodology for calculating practice expense to try to neutralize payment between in-office and hospital outpatient settings; CMS is trying to limit nonfacility practice-expense RVUs for about 200 individual codes so that the total non facility MPFS payment amount would not exceed the total combined amount that Medicare would pay for the same code in the facility setting. “To make that change would have a huge impact on radiation oncologists, which concerns us greatly,” Moran says, “but CMS is really targeting clinical laboratories and pathologists. CMS is becoming an equal-opportunity cutter of reimbursement.”
Proposed MPFS
There is some good news for radiology in the proposed 2014 MPFS: CMS has elected not to expand the multiple-procedure payment reduction (MPPR), a move that many had feared that it would undertake, given the cost reductions achieved by applying current MPPR levels. “Our fear was that it was going to expand, and this time, CMS has chosen not to do that—which doesn’t mean it won’t revisit the idea at some point in the future,” Moran says.
She attributes the agency’s pullback on the issue to the battle that the ACR has waged on Capitol Hill, as it seeks legislative redress for last year’s cuts. “I don’t think CMS is ever going to repeal the MPPR voluntarily,” she notes. “We’ve worked to address the issue legislatively, and we have a tremendous amount of support from members of Congress on that, but it’s always challenging to translate policy that is supported on the Hill into public law: There are many steps in between.”
CMS is aware, however, that the issue of the MPPR is a contentious one. “CMS knows this is a political hot potato,” Moran says. “It has been asked, time and time again—by Congress—to justify its policy and to show the data it used, and it’s never been able to respond. It knows that it’s on thin ice. All we can do is hope that Congress will finally see its way to doing something about this legislatively.”
Proposed HOPPS Rule
The proposed HOPPS rule, on the other hand, contains little but negative news for radiology. Reflecting a change made to the inpatient rule, the outpatient rule adopts separate cost centers for CT and MRI, and CMS proposes to use fiscal-year 2011 cost data for the calculations. The ACR has been following this issue since 2008 and providing research to CMS on its adverse effects—to no avail, Moran says. “By any accounting method, there are no data to support doing this,” she notes. “It causes distortions in reimbursement that cannot be justified, in any way, by legitimate policy.”
Further, Moran notes, establishing the separate cost centers for high-tech imaging would make technical-component payments for hospital outpatient CT and MRI studies fall below the rates established by the MPFS. This triggers a provision of the DRA that requires Medicare to reimburse at whichever rate is lower (HOPPS or the MPFS), meaning that the HOPPS rate would become the default rate for in-office imaging as well. An analysis by the ACR estimates that the move would cut CT and MRI reimbursement by as much as 38%.
“We’re going to see even further reductions to the technical component because of the effects of the DRA,” Moran says. “We will protest this as hard, as long, and as loudly as we possibly can, and if CMS won’t back down, we will have to go the legislative route. CMS has already been shown the error of the distortions that this policy will create, and it has chosen to go forward with it anyway.”
Fee for Service Under Fire
Moran’s conclusion regarding the ongoing CMS cuts to imaging reimbursement—and health-care reimbursement in general—is that the agency is trying to remove incentives for fee-for-service medicine. “This is just how it’s going to be, from now on,” she says. “A change in administration won’t even bring about a difference. Policymakers on both sides of the aisle are unified in their opposition to fee-for-service reimbursement, and as long as it remains the primary means of physician reimbursement, there will be a continued onslaught of cuts.”
While there might be consensus on the ills of fee-for-service payment, there is, unfortunately, no consensus on what should take its place, Moran says—and that means more reimbursement and regulatory chaos, in the years to come. “Many people feel that historical fee-for-service reimbursement is an unsustainable means of paying for health care,” she says, “but we have yet to identify the panacea: the magical combination of less-expensive (but better) care. Those two goals have not materialized yet, but everyone is trying to find a way.”
Cat Vasko is editor of MedPracticeBiz and associate editor of Radiology Business Journal.