Obama FY2015 Budget Takes Aim at Self-referral, Calls for Pre-Auth

In a good-news–bad-news scenario for the radiology community, President Obama’s $3.9 trillion 2015 fiscal year budget would limit the self-referral rampant in advanced imaging and radiation oncology, but implement prior authorization for advanced imaging.

The proposal to close the in-office ancillary exception to the Stark laws for advanced imaging, radiation therapy, anatomic pathology services, and physical therapy would result in savings of $6 billion over 10 years, according to a brief from the HHS.

The brief acknowledges that the intended purpose of the exception is patient convenience, but adds, “certain services such as advanced imaging and outpatient therapy are rarely furnished on the same date as a related physician office visit. Additionally, there is evidence that suggests this exception may have resulted in overutilization and rapid growth of certain services.”

The news was cheered if not expected by the ACR, which has been fighting to repeal the in-office ancillary exception for ten years, says Rebecca Spangler, ACR director of Congressional Affairs, Government Relations and Economic Policy.

Referring to it as “the exception that swallowed the rule,” Spangler says, “When the Stark law was put into place, the practice of imaging was different, you needed a large machine, an expensive machine, and it was more difficult to provide imaging services in an office setting than it is today.”

A proposal in the budget to implement pre-authorization for advanced imaging (as well as power wheel chairs) was not welcomed. “Prior authorization for imaging is not a new concept,” Spangler says. “It is something we saw in the President’s proposal last year, and it is something we somewhat anticipated, but it is not a very popular proposal. It is debatable whether the use of radiology benefits managers save money.” The White House projects savings from prior authorization over 10 years of $90 million.

Spangler says a preferred proposal to manage utilization is the requirement for physicians to consult decision support contained in the bicameral bill to replace the SGR awaiting action in Congress. “The ACR believes that the appropriate use criteria policy is a better avenue than an RBM,” she says. “It allows both the ordering and rendering physicians to be involved in the process, to make sure the patients get the most accurate imaging exams for their clinical condition.”

While no one expects the President’s budget to pass Congress in a mid-term election year, Spangler says any proposal in a President’s budget is worth attention. “You always have to be cognizant of the proposals that come out in the budget, because they are ideas that are always floating around,” Spangler says. “If Congress is in a position to need to find savings, they can always pluck various policies from the President's budget.”

In total, the president’s budget calls for more than $400 billion in Medicare reductions, including proposals to:

• cut Medicare provider reimbursement by $354 billion,

• authorize $5.23 billion in payments over 10 years for 13,000 new graduate medical education residency slots in primary care and other high-need specialties,

• extend increased payments to primary care physicians participating in Medicaid, and

• allocate $164 million to support the President’s initiative to expand mental health treatment and prevention services.

• contribute an additional $600 million toward supporting enrollment in and operating the federal health-care insurance exchanges.

• cut Medicare costs by asking higher-income Medicare beneficiaries to higher premiums and future retirees to foot more of their outpatient care.