Medicare finalizes plan to slash $9B in imaging spending through site-neutral reforms
The Centers for Medicare & Medicaid Services on Wednesday finalized plans to slash some $260 million in annual imaging spending through site-neutral reforms.
First proposed in July, CMS on Jan. 1 will begin reimbursing for some noncontrast, hospital-based outpatient imaging using the lower physician fee schedule rate.
The agency previously said its goal is to curb unnecessary increases in the volume of clinic visit services furnished at pricier off-campus hospital departments. Federal authorities want to move more care to physician offices, where it can be delivered cheaply, after previously doing so for drug-administration services.
“Medicare and patients should not be charged more for an imaging test solely because it is done in a hospital setting rather than a standalone clinic,” CMS said back in July when it first proposed the change.
The update will apply to certain bone density scans, X-rays, ultrasounds, CT exams and MRIs performed at off-campus, provider-based departments. CMS estimated the change will save the Medicare program more than $9 billion through 2036. This policy already applies to clinic visits and drug-administration services at the same hospital locations, CMS notes. Rural, sole-community hospitals are exempt from the new rule.
The American College of Radiology highlighted the final policy in a news update to its members, published late Wednesday. ACR notes that the reforms apply to Ambulatory Payment Classification Nos. 5521 through 5524. The college previously shared concern about the initial proposal in September, worried it could have “unintended consequences for beneficiary access.” Others such as the American Hospital Association and Radiology Business Management Association also have expressed opposition to this change. Hospitals reiterated their concern Wednesday, estimating Medicare will pay about 40% of the previous hospital payment rate for these imaging services.
ACR believes Medicare has failed to prove payment differences between hospital outpatient departments and doc offices are the primary driver of imaging utilization growth. Nor has the agency established that the imaging services targeted represent “unnecessary volume warranting intervention.” Reducing payment could affect provider capacity and availability, creating barriers to access that might discourage patient adherence to cancer screening regimens.
“CMS should carefully evaluate the impact of this proposal on preventive imaging services and consider whether additional safeguards are necessary to ensure continued access to these important imaging screening examinations,” ACR warned in September.
The site-neutral reforms are part of numerous updates being finalized under the 2027 Hospital Outpatient Prospective Payment System rule. Overall, the agency is increasing rates by a net of 2.3% compared to 2026, with a conversion factor of $99.97. Other finalized changes include updated Ambulatory Payment Classification assignments for certain imaging services, a new payment framework for “software as a medical service,” and continued separate payment for high-cost diagnostic radiopharmaceuticals.
You can read more in the ACR’s summary, along with the CMS fact sheet, news announcement and final rule.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.