The U.S. Government Accountability Office (GAO) has just released a report which concludes that the controversial Deficit Reduction Act (DRA) has significantly cut imaging expenses, from nearly $14 billion dollars through 2006 to 12.1 billion in 2007, a 12.7 percent decline.

Under the DRA, Medicare fees for certain imaging services covered by the physician fee schedule may not exceed what Medicare pays for these services at hospitals (under Medicare's hospital outpatient prospective payment system or OPPS). According to the GAO, physician imaging services have been one of the fastest-growing services paid for under the Medicare Part B physician fee schedule (PFS) particularly in advanced imaging modalities--computed tomography (CT), magnetic resonance imaging (MRI), and nuclear medicine.

In the new report, "Medicare: Trends in Fees, Utilization, and Expenditures for Imaging Services Before and After Implementation of the Deficit Reduction Act of 2005," the GAO examined how fees for performing imaging tests were affected by the OPPS cap in 2007 and also analyzed trends in expenditures and utilization for physician imaging services under Medicare Fee for Service (FFS) through 2007.
Using data including Medicare claims from 2000-2007, the report states that in 2007 the OPPS cap reduced the fee for the performance of about one in four physician imaging tests overall, and that fees for advanced tests were more likely than other imaging tests to be paid at the lower OPPS rate: A higher percentage of advanced imaging services--65 percent--were paid at the OPPS rate than other imaging modalities (about 13 percent). Nearly all MRIs and CTs were paid at the OPPS rate.

The fee reductions in advanced imaging tests varied extensively. For instance, in MRIs subject to the cap, fee reductions ranged from about 21 to 40 percent. While expenses for physician imaging services increased in 2000 through 2006, in 2007 expenditures declined while utilization continued to rise. According to the report, from 2000 to 2006, on a per-beneficiary basis expenditures increased 11.4 percent per year but in 2007 declined 12.7 percent.

Analysis Confirms DOTmed's Reports

DOTmed's own investigations and reporting on the issue have consistently pointed to financial hard times for imaging centers affected by the DRA cuts. Following are some observations by attendees at the American Healthcare Radiology Administrators (AHRA) meeting, held in Denver in July.

Hazel C. Hacker, FAHRA, Business Manager, Edison Imaging Associates P.A. told DOTmed, "In some cases, the cuts have been devastating with many of the centers unable to absorb the hit and being forced to close."

More Industry Headlines