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Today, CMS announced a proposed significant increase -- from 50 to 90 percent-- in utilization rate assumptions used to determine medical imaging reimbursement. The higher the utilization, the lower the agency can set its reimbursement.

"The current payment rates assume that a physician who owns this type of equipment will use it about 50 percent of the time, but recent survey data suggest this expensive equipment is being used more frequently. As the use of this type of equipment increases, the per-treatment costs for purchasing, maintaining and operating the expensive equipment declines, making a reduction in payment appropriate," CMS stated in a press release (see DM 9542).

As DOTmed has previously reported (DM 9494), the suggested change in the Medicare Utilization Rate for imaging has caused much concern in the imaging industry and among practitioners. DOTmed spoke with Cynthia R. Moran, the American College of Radiology (ACR) Assistant Executive Director, about why organizations such as ACR are urging Congress to consider carefully the effect of the proposed rate change.

DOTmed asked Ms. Moran why ACR believed that the proposed change in the rate is based on inaccurate information. Moran explained that the information from the Medicare Payment Advisory Commission (MedPAC) surveys is inaccurate because it did not involve a comprehensive study of equipment utilization. All studies up to this point have involved a very small number of imaging centers or offices interviewed. However, the utilization rate involves many complex issues and, Moran says, a time-intensive effort for physicians and their staff to figure out exactly how often imaging equipment is used.

There have been attempts to capture the data, but these attempts have not included multiple sites and rural areas and the responses have always been very small in number. So to target imaging providers based on that information does not seem just.

"We agree this is a fair policy objective to come up with a rational number on how often medical equipment is used. But we would argue that there is an equipment component in every code in the fee schedule. Every physician uses medical equipment, and if you are going to develop policy, in all fairness you should not single out performers such as imagers and put them under scrutiny with no supporting data simply because we are an easy target," Moran says.

"The utilization of imaging has flattened out over the last few years. It may even be going down in future years. There is no real justification for cherry-picking a policy parameter. If policy makers think the policy needs to change, it should be applied across the board to all services, not just diagnostic imaging."

Since every component of the Medicare Schedule takes into account a use of equipment, Moran points out, whether it's a cotton ball or a multi-million dollar imaging unit, if MedPAC feels the number should be revisited then the policy should be based upon accurate information and applied to all physician services.

The Rural Issue

One of the more significant problems critics point out in the MedPAC report is that discrepancies of use between urban areas and rural areas are not assessed. In addition, the disproportionate effect on different modalities of imaging is not taken into account. For Moran and the ACR, painting the industry with such a broad brush could have absolutely disastrous effects in rural areas. "It is a very unfair and unjustified policy," she says.

There is little doubt for the ACR that if the rate goes up the effect will be to put all of diagnostic imaging in a hospital setting. This will cause significant problems to those who do not have easy access to a hospital. "We think this is a real threat. Patients in rural areas depend upon independent imaging centers or physicians with imaging capabilities in their office."

ACR has recommendations for how to approach the situation. "What we think should be done is to hold off pronouncements on the issue while there is still no comprehensive study. We would urge CMS (Medicare/Medicaid) to undergo such a comprehensive study--for however long it takes to gather the exhaustive information on the differences between urban and rural settings, and different modalities. We will live with the results of such as study, if based on good sound data." CMS would be the right entity to capture such comprehensive data, having access to every physician office, and can mandate that a survey be completed that indicates how much time is needed for the equipment and how often this equipment is used.

Front End Approach

Another suggested approach is to tackle imaging from the front-end perspective: the decision-making process for diagnostic imaging. Imaging can certainly be a source of profit if a physician is able to provide such services to patients; and sometimes unnecessary imaging occurs. Moran says the better way to address the issue is to develop a policy to put an educational onus on the physician.

"There are numerous tools for a referring physician to consult that can walk them through what is the appropriate imaging test based upon what the patient presents. The ACR has been developing appropriateness criteria for 15 years. We are working to educate primary care physicians and referring physicians as to the correct test and diagnosis. Such tools can be downloaded to a PDA or accessed on the web and some vendors are developing Computerized Physician Order Entry systems. These are invaluable tools that are user friendly, transparent rather than black box, and walk the referring physician through the process of deciding the best tests."

ACR is strongly urging Congress to adopt this front-end approach to utilization. "While the actual utilization of imaging equipment is going on, savings can still be obtained if policy encourages use of the right tools."

ACR is working arm-in-arm with the industry and other organizations to emphasize the decision-making aspect--the right tests for the right reasons. That would help alleviate the past and present problem of unnecessary imaging tests. Moran says ACR is getting encouraging signs that the Senate Finance Committee and even the House Committee are interested in considering these methods. "It would provide a much longer-term solution to the budget concerns that have arisen as to the utilization of imaging. It's an education and feedback program; if you have to penalize the physician for ordering the wrong test so be it. There are tools that can make it a seamless effort to ensure physicians are ordering the right tests," she says.

There are contradictions inherent in the imaging sector of the health care industry--new scientific developments are celebrated for exciting prospects in better diagnosis of cancer or Alzheimer's, balanced against the continual effort to cut the use or lower reimbursement of imaging. Moran agrees. "No one denies the use of imaging, particularly in being able in some cases to prevent surgery and hospitalization. There is every reason to encourage the use of diagnostic imaging. It's just unsustainable the way it has been going because it has been used inappropriately. If that breakdown in the system is addressed, it shouldn't be done by slash and burn cutting of the utilization rate." The approach needs to begin, Moran says, where the breakdown is--the decision process of whether the test should be ordered in the first place.

"If Congress doesn't address the issue the situation will be ongoing and get worse. The incentives are in the wrong place. If tools are mandated that can save imaging from being misused, you save money."

Read the proposal, "Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B (CY 2010), (2009-15835)," and go to page 59 for the section on equipment utilization:
www.federalregister.gov/inspection.aspx#special

Also read a report on rural health care in the July 2009 issue of DOTmed Business News.