The fiscal-cliff negotiations have come and gone without the hoped-for repeal of the 2013 Multiple Procedure Payment Reduction (MPPR) for imaging. An enhancement of the MPPR contained in the 2012 Medicare Physician Fee Schedule (MPFS), the 2013 version extends the payment reduction to many second imaging procedures performed—by the same individual or group practice—at the same site, during the same encounter as the first procedure. CMS initially proposed a 50% reduction on the second procedure, but settled on a 25% reduction, in its final MPFS release.
The services to which the reduction applies are listed in an addendum to the MPFS.¹ Harry Purcell, operations manager for Medical Management Professionals (MMP), summarizes, “The addendum is pretty comprehensive and primarily lists advanced imaging procedures, as well as some ultrasound procedures. Any of the professional services listed within the addendum that occur on the same day, for the same patient, are reduced in reimbursement by 25%.”
Initial Impact
Purcell observes that as in 2012, the financial impact of this adjustment will depend on a radiology group’s payor mix—the more Medicare patients the group sees, the stronger the impact will be. “In my own experience, the projected impact of the MPPR in 2012 could have been as much as $10,000 per physician,” he says.
The 2013 expansion of the MPPR will increase that impact by about 33%, in Purcell’s estimation. “If the impact was $10,000 last year, it will be $13,300 this year,” he says. “That sounds like a big number, and it is, but depending on the size of the practice and its payor mix, it is not a catastrophic hit.”
Purcell explains that in his analysis, procedures subject to the 25% reduction represent about 18% of average total imaging volume in a hospital-based setting—and, of course, the reduction is only applied to Medicare patients, who account for between 30% and 40% of the average hospital-based group’s patient base. “The average impact to the group, in this example, is approximately 2%,” he says. On the imaging-center side, he says, the impact will be even slighter.
For this reason, Purcell does not think that groups will attempt to mitigate the MPFS by appending a procedure modifier to avoid the MPPR. In 2012, he notes, “Medicare anticipated that and said that if it saw a heightened use of the -59 modifier, the group could be audited.” The -59 modifier would enable a group to avert the reduction. Purcell adds, “What I said to groups was, ‘For $10,000, do you want to go through an audit?’” While the initial financial and operational impact of the MPPR might sound small, however, Purcell says that the thinking behind it is worth consideration.
The Bigger Picture
The bigger picture is of CMS making “an arbitrary reduction without true representation of the facts,” he observes. As evidence, he notes that CMS initially proposed a 50% reduction on the second procedure, which it promptly adjusted to 25% following an outcry from the imaging community.
“The real question is this: How comprehensive is the formula CMS used to reach that conclusion in the first place?” Purcell says. “This is a reduction in revenue associated with real work that physicians are doing in a captive environment. Radiologists in a hospital setting cannot control whether patients come through a trauma center and go up to the floor for a CT and ultrasound, but they still have to do those interpretations.”
The argument for the reduction was that it would help eliminate redundancy, primarily in the imaging-center environment, Purcell notes; that argument ignores the hospital setting entirely. Even in imaging centers, he adds, “There are improvements to be made in some settings, but from the radiologist’s perspective, there is no gain in productivity—so the theory by which CMS justifies the reduction, to begin with, is baseless. It would be very difficult to demonstrate real-world productivity gains for radiologists as a result of this measure.”
Instead, he says, the problem comes down to perception—and radiologists might be facing an uphill battle in addressing it. “Last year, The Medicare Payment Advisory Commission (MedPAC) did another study of incomes, by specialty, and again, radiology was highlighted as one of the higher income earners,” Purcell notes.
Indeed, the report states, “The ability—or inability—of some practitioners to generate volume poses another risk to the equitable distribution of payments . . . imaging, tests, and procedures other than major surgical procedures have all grown at much faster rates than other services . . . The specialists who furnish these high-growth services are generally the ones at the high end of the compensation scale. This finding is not surprising under an FFS payment system that rewards practitioners for generating volume, regardless of clinical value.”²
Purcell summarizes, “At the end of the day, MedPAC is talking about who can afford to take a hit.” In the future, he says, look for the cuts to continue as CMS investigates what it calls misvalued services—an area in which the agency has cited imaging as being a likely target. “Scrutiny regarding the comparatively high level of reimbursement is going to be coming at radiology from every angle,” he says.
Cat Vasko is editor of ImagingBiz.com and associate editor of Radiology Business Journal.