This report originally appeared in the April 2007 issue of DOTmed Business News


The Deficit Reduction Act of 2005 took effect January 1, 2007, implementing reductions in Medicare reimbursement for imaging studies at free-standing facilities and doctors' offices. The cuts are aimed at equalizing Medicare reimbursement rates for outpatient and hospital imaging procedures.

Professional groups and associations lobbied hard to forestall the law. For example, the American College of Radiology fought the cuts and cautioned, "These attempts to garner more savings from imaging services will continue as Congress still perceives that there is still too much profit in imaging services."
An industry-backed alliance sprang up to resist the impending cuts. The Access to Medical Imaging Coalition (AMIC) includes OEMs, patients and providers with a vested interest in maintaining the provision of affordable imaging services. "Medicare cuts in imaging services aren't Democrat or Republican; they aren't liberal or conservative," said AMIC Executive Director Tim Trysla. "What they are, however, is harmful and excessive, and they are going to hurt Medicare patients regardless of whether they live in red states or blue states."

A seriously considered proposal was put forth last fall to delay the implementation of the cuts for two years until the Government Accounting Office could review them. The Access to Medical Imaging Act (HR 5704 and S 3795) gained significant support in the House, but it was not adopted before Congress adjourned so the DRA took effect.

A September 2006 study by Moran Company forecasts that nearly 90 percent of the medical imaging procedures whose Medicare reimbursement rates would drop under the DRA would be paid less than the estimated costs of performing the procedures in physician offices and independent imaging centers. Of the 145 imaging procedures whose payment would be affected by the caps imposed by DRA, 126 (or 87 percent) would be paid below the estimated cost of performing the procedures in the physician office setting. Specific examples include widely prescribed Cardiac MRI/Limited Study (Code 75555TC); CT Bone Density, Axial (76070TC); Acute Venous Thrombus Image (78456TC); Tumor Imaging 3D (78803TC); and Ultrasound Exam, Pelvic, Limited (76857TC). Also, according to the report, aggregate Medicare payment for imaging services in physician offices and imaging centers would fall 16 to 18 percent below aggregate payment for similar services provided in hospital outpatient departments. Much of the overall reduction in spending brought about by DRA would be concentrated on a limited number of high-volume procedures used widely by Medicare patients. (Note: Some imaging procedures have seen a slight restoration of Medicare reimbursement when compared to the original DRA calculations.)

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