The Deficit Reduction Act of 2005 (DRA) mandated that imaging procedures be reimbursed at the APC rate, when that rate is lower than the technical component payment under the Medicare Physician Fee Schedule. The DRA also mandates that ambulatory surgical center and inpatient hospital payment mechanisms be restructured like HOPPS and paid similarly, meaning on the basis of actual reported costs. "That's why this payment system is even more important to radiologists," Rawson observes.

APCs cover the technical component only. Kassing says some physicians might wonder why they should care so much about a system that does not directly reimburse them for professional services. But she notes that most radiologists work in hospitals. "It is in their best interest to make sure that their hospital departments show adequate revenues to justify new and upgraded resources," she says.


Hospital administrators focus on their cost centers and know which are revenue "winners" and which are revenue "losers." The results will help them decide which improvements they can and cannot support in the future, Kassing explains. "If their hospitals can't afford to buy new radiology equipment or replace existing equipment with updated versions, then the radiologists won't have a place to work that has the tools they need."

APCs Updated Every Year
In March, the APC advisory panel meets to review new procedures to determine where they should be grouped. The panel also reviews current procedures that may need to be moved to a new classification for varying reasons. In September, it meets again to review changes that CMS had proposed based on earlier testimony.

The changes eventually adopted for the following year may result in increased reimbursements for some groups and decreased reimbursements for others, Rawson says. "If you move a procedure out of a group, it could change the average or mean for those that are left."

Rawson says that because the budget must remain neutral, if CMS were to double the reimbursement of one group, it would have to compensate by reducing the others by an equal amount. "Take an exam such as the chest X-ray, which is very common," he says. "Were CMS to increase the reimbursement for the chest X-ray, then everything in HOPPS - and not just radiology - would get slightly lower payments to compensate for that increase."

It is a complex, sometimes frustrating task for radiologists to stay up-to-date on proposed changes and follow those that are implemented. The problem, Rawson says, "is this isn't one of those processes where it ever ends."

But radiologists who manage to keep abreast of proposed changes and ensure that hospitals stay informed will, in the long run, help their patients, their hospitals, and themselves. And that's a definite win-win-win.

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