CMS targets imaging services for fee cuts

Washington -- The Centers for Medicare & Medicaid Services may have fired the opening salvo in the struggle to rein in the rise in spending on physician services.

Tucked away in the nearly 800 pages of a recently released CMS proposed rule on the 2006 physician fee schedule is a new plan to reduce reimbursements for certain imaging services when performed on one patient during a single session. For instance, the government currently pays full price for magnetic resonance imaging of the abdomen and the pelvis when a physician administers both scans during the same visit. The federal proposal, though, would reduce payment for the second procedure by half.

The Medicare Payment Advisory Commission provided the inspiration for the move last March when it recommended new, lower-paying reimbursement codes for multiple imaging services. The commission said it believes that is fair, because much of the physician's work in setting up the patient for the first scan does not need to be repeated for subsequent scans.

CMS agreed with MedPAC's assessment and concluded that doctors' ability to achieve such operational efficiencies warrant lower reimbursements. But Medicare officials might have been shortsighted when they came to this conclusion, said James Borgstede, MD, chair of the American College of Radiology's board of chancellors.

"We're not convinced that the way they're doing this is appropriate, particularly on nuclear magnetic resonance and ultrasounds," said Dr. Borgstede, a radiologist in Colorado Springs, Colo. "In nuclear magnetic resonance, for example, when you do contiguous scans, oftentimes you have to take the patient out of the scanner between parts, you have to change some of the technical equipment that you're using on that scanner and you also have to do repeat localizing images before you can do the second part."

After accounting for the extra work that the doctor does, the theory that bundling multiple imaging services produces cost savings of more than 50% to the physician might no longer be valid, he said. Radiologists also worry that CMS' strategy to make up for the reductions by funneling the government's savings into other areas of the imaging reimbursement system would result in unpredictable payments for doctors.

A harbinger of more cuts?

In addition to harboring concerns that this particular proposal could provide a financial hit to physicians, some doctors worry that the restriction would mark only the beginning of the federal government's interest in the outpatient medical community.

In recent months, CMS has set its sights on imaging, which has experienced spending growth over the last decade that is roughly three times the average increase for all physician services. Supporters of the proposed change predict that it will cut down on the financial incentive to order unnecessary imaging services on contiguous body parts.

While doctors would support reforms that legitimately limit spending on truly excessive procedures, they balk at proposals that would slice more broadly, Dr. Borgstede said.

"This is akin to, or at least the first cousin of, across-the-board cuts for imaging reimbursement," he said.

Such moves toward spending restraint might not be confined to the imaging field. Medicare officials also have highlighted office visits and minor surgical procedures as primary contributors to a recent surge in Medicare spending on physician services. Although it has not suggested cuts in those payments so far, CMS continues to look for areas in which this increased utilization could be suspect.

Federal interest in the physician arena already has prompted the American Medical Association to take a stand against potentially aggressive attempts to limit spending on doctors' services. Delegates at the AMA Annual Meeting in June passed a resolution calling on the Association to oppose efforts by any payer to control utilization of any medical service unless policy-makers can demonstrate that the move will improve quality without interfering with patient access.

The Association's explanation that legitimate clinical reasons might explain much of the spending increases has caught the attention of Medicare officials.

"The AMA has provided us with several illustrations of recent trends in medical practice that it believes contribute to the overall growth in spending on physicians' services," CMS said in the proposed rule. Such trends include growing encouragement from payers to assess heart function using echocardiograms and to prescribe statin therapy for increasingly older patients.

CMS is accepting comments on the imaging plan and other proposed changes to the physician fee schedule through Sept. 30. The regulations are available online (link).

The agency is scheduled to release a final rule later this year.