MedPAC seeks to rein in imaging pay

Commissioners also are considering SGR replacement options, including delegating some physician fee adjustments to the HHS secretary.

By Doug Trapp — Posted June 27, 2011

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Certain physicians who interpret the results of diagnostic imaging procedures should undergo fee reductions, and physicians who order far more imaging than their colleagues should be subject to prior authorization requirements, according to Medicare Payment Advisory Commission recommendations in its June report to Congress.

The suggestions are part of a continuing conversation by MedPAC commissioners about rebalancing Medicare payment toward cognitive services and primary care and away from procedural services, said MedPAC Executive Director Mark Miller, PhD. Commissioners continue to believe that fees for some services are overvalued.

MedPAC also recommended in its June report that physicians, hospitals and others should receive funding to contract directly with Medicare quality improvement organizations rather than having the program just pay QIOs to reach out to doctors. Commissioners discussed but did not vote on possible options for overhauling Medicare's sustainable growth rate formula, including a possible idea for giving the Health and Human Services secretary the authority to reduce certain Medicare payments administratively to meet spending targets set by Congress.

MedPAC recommended that Congress reduce the professional component for multiple imaging tests performed on the same patient during the same session. Under such a policy change, physicians would be paid a reduced rate for interpreting the second scan and subsequent scans. The proposal is similar to a payment reduction policy that Medicare already uses when it comes to the technical component of imaging, which determines the rates for the health professionals that actually administer the scans.

MedPAC also recommended that Congress reduce the physician work component for diagnostic imaging that is ordered and interpreted by the same physician, another change that would lead to lower payment rates. "The work involved in interpreting a test likely duplicates activities that have already been performed by the referring practitioner, such as reviewing the patient's history, medical records, symptoms, medications and the indications for the test," the MedPAC report states.

Physician organizations largely panned MedPAC's imaging pay recommendations, saying that few opportunities exist for physicians to interpret tests more efficiently than they do now. Reducing imaging fees could lead doctors to contract out for their diagnostic testing instead of doing it themselves, said Brian Whitman, associate director of regulatory affairs for the American College of Cardiology.

"You are going to encourage less coordinated care," he said.

Crafting criteria for appropriate use of imaging is a better way to address the overall growth of such spending, according to physician organizations. The fee reductions recommended by MedPAC are arbitrary, said Peter Mandell, MD, chair of the American Assn. of Orthopaedic Surgeons' Council on Advocacy.

The organizations also said MedPAC seems to be issuing recommendations based on out-of-date data for Medicare imaging spending. The volume of diagnostic imaging services increased by an annual average of 6.3% between 2004 and 2008, but by only about 2% between 2008 and 2009, according to the MedPAC report.

"The American Medical Association shares MedPAC's interest in accurate reimbursements, but ... adding new cuts and administrative burdens to the Medicare system is the wrong approach and will compromise care for patients while increasing costs," said Cecil B. Wilson, MD, then AMA president.

Another hoop to jump through?

Physician organizations did not welcome MedPAC's recommendation to create a prior authorization program for Medicare physicians who order significantly more advanced diagnostic imaging tests than their colleagues. But at least some specialty societies were more open to a program that strengthens evidence-based care guidelines.

The Centers for Medicare & Medicaid Services has monitored the use of services mostly by reviewing claims after the fact, according to MedPAC. But under a prior authorization program for imaging, CMS could promote appropriate use of such tests as they are carried out, perhaps through electronic decision support systems, the commission suggested. Such systems are being tested around the country.

Medicare should use a multistep approach to such a program, MedPAC recommended. First, CMS would compare physicians in the same specialty who treat patients with similar conditions. High-use physicians would submit clinical information to the agency when they order advanced diagnostic imaging. CMS would provide confidential feedback to these physicians based on evidence-based guidelines. Doctors who are deemed to have consistently inappropriate levels of imaging would be required to seek approval from CMS or a program contractor before the tests would be covered, MedPAC suggested.

But a third-party prior authorization program would pose an unnecessary administrative burden to many physician practices, said Maurine S. Dennis, MPH, senior director of economics and health policy at the American College of Radiology. "There's no one-size-fits-all solution."

Instead, a system that provides physicians with appropriate imaging use guidelines at the point of care could be helpful, Dr. Mandell said. "That would be fine as long as they're based on scientific data," Dr. Mandell said. AAOS is developing appropriate use criteria but has not yet tackled imaging services.

Ways to replace the SGR

MedPAC's June report also updates the ongoing discussion commissioners are having on ways Congress can replace or adjust the sustainable growth rate formula that helps determine physician pay. Physicians are facing a nearly 30% cut beginning Jan. 1, 2012, under the SGR.

The range of options MedPAC is considering recommending includes setting modest physician pay updates over multiple years, which would have the effect of boosting Medicare spending but would provide stability to the program. MedPAC has "become more and more concerned in the last few years with the nature of the short-term fixes" implemented by Congress, the commission's Miller said.

MedPAC also is considering calling for a special re-evaluation of physician fees to determine which services may be overvalued based on the time and effort required to provide them. Such a rebalance could favor primary care evaluation and management services, especially for doctors who manage patients with multiple chronic conditions.

MedPAC could ask Congress to set new Medicare spending targets and give the HHS secretary the authority to adjust Medicare payments to stay under the ceiling. Current statute allows only for across-the-board reductions when Medicare spending exceeds statutory SGR limits. Miller said commissioners have not settled on whether to recommend new Medicare spending targets.

Dr. Wilson said the AMA agrees that Congress should replace Medicare's SGR formula now, but not with "another target that would lead to cuts and threaten access to care for patients."

Dr. Mandell said there are many ways one could change the SGR, but replacing the formula faces one major obstacle. "The solution is finding $300 billion to pay for it. Short of that, it's going to be quite a challenge."

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A tighter squeeze on imaging

The Medicare Payment Advisory Commission in its June report to Congress recommended tighter reviews of spending on diagnostic imaging, among other advice. MedPAC recommended that:

  • Congress reduce the professional component for multiple diagnostic imaging services when interpreted by the same physician for the same patient session.
  • Congress reduce the physician work component of diagnostic imaging services ordered and performed by the same physician.
  • Congress establish a prior authorization program for very frequent users of advanced diagnostic imaging services.
  • The Health and Human Services secretary accelerate ongoing efforts to bundle certain physician Medicare payments.
  • Congress provide Medicare funding to physicians, hospitals and other health professionals so they can contract directly with quality improvement organizations.

Source: "June 2011 Report to the Congress: Medicare and the Health Care Delivery System," Medicare Payment Advisory Commission, June (link)

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Costly congressional delays

The projected cost of preventing cuts under the Medicare sustainable growth rate formula by implementing a decade-long pay freeze has grown by tens of billions in recent years. Other options to replace or reset the SGR formula also are expected to be expensive.

Year Projected cost of
10-year freeze
2011 $297.6 billion
2010 $276.0 billion
2009 $245.0 billion
Other options Projected
10-year cost
2% annual raises $388.5 billion
Annual raises based on Medicare Economic Index $358.1 billion
1% annual raises $342.1 billion
Freeze through 2013, 1% cut in 2014, reset and reinstate the SGR in 2015 $261.7 billion
Reset SGR targets at 2010 spending level $195.2 billion

Source: "Changes in Payments to Physicians," Congressional Budget Office, June (link)

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External links

"Report to the Congress: Medicare and the Health Care Delivery System," Medicare Payment Advisory Commission, June (link)

"Changes in Payments to Physicians," Congressional Budget Office, June (link)

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