Not all radiologists see the need to get involved in what a hospital reports to Medicare as the cost of imaging procedures. But since reported technical costs directly impact reimbursement, radiologists would be wise to ensure that hospital billing staff (or "charge masters") reports their data both accurately and properly.

This is the suggestion of ACR member James V. Rawson, MD, who sits on the Centers for Medicare and Medicaid Services (CMS) advisory panel that meets twice a year to review Ambulatory Patient Classification (APC) groups.

APCs are groups of codes that are both clinically related and use similar resources. For example, all codes for computed tomography with contrast are grouped into one APC. Each group carries an assigned weight, which is then multiplied by a hospital outpatient conversion factor to arrive at a payment level. Every procedure in each group is paid at the same rate.
Rawson and the 15-member CMS panel make recommendations to the CMS as to necessary adjustments in APCs. Some procedures are added to a group, while others are removed. CMS considers the panel's advice and proposes changes, which are then subject to public comment. After further review, proposals, and comment, the CMS makes final recommendations in the fall, which are published and take effect January 1.

"The hospital outpatient prospective payment system is an evolutionary process. It continues to adapt to changes in health care and hospital claims data," says Rawson, who chairs the packaging subcommittee of the APC Advisory Panel.

The challenge, according to ACR's Senior Director of Economics and Health Policy Pam Kassing, R.C.C., is for hospitals to stay on top of these annual changes to ensure that they are appropriately coding and reporting imaging procedure costs. Accurately reported costs, she says, translate into better payments.

"Hospitals need to update their charge masters with the new codes and accurate charges every year," Kassing says. "Then they need to make sure they are reporting their costs accurately, including everything that is supposed to be included with the procedure being billed. If they do those two things, they will be taking very solid steps toward getting accurate payment levels."

HOPPS and APCs Intended to Control Costs
Between 1980 and 1991, Medicare witnessed a fivefold increase in hospital outpatient expenses. The Hospital Outpatient Prospective Payment System (HOPPS) was supposed to remedy the problem. The Balanced Budget Act of 1997 mandated that HOPPS be implemented on Aug. 1, 2000. By that time, ambulatory patient groups evolved into ambulatory patient classifications, which remain the designation today.

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