Further Imaging Cuts Should Not Occur Absent Reliable Data
The assertions by Congress that overall imaging growth is excessive and must be cut are unfounded and based on obsolete data.
The Medicare Payment Advisory Commission (MedPAC) has shown that, for 2006-2007 the per beneficiary imaging growth rate is only 2 percent nationally — well in line with other physician services.
To confirm this in a recent MedPAC report to Congress, follow the link below and go to Page 99 of the report (see page numbers on lower left of pages).
March 2009 MedPAC Report to Congress
NOTE: Look under the IMAGING heading. The left two columns are numbers of procedures (they label it “units of services”) and the right two columns are dollars (which they label “volume”). These are per beneficiary statistics adjusted for changes in the size of the beneficiary population.
These stats are broken down by the average growth rate 2002 – 2006 and the growth rate for 2006-2207. The 2006-2007 numbers are important because MedPAC and Congress are calling for massive imaging cuts and using outdated data to justify it.
Higher Equipment Utilization Rate Assumption Called for by MedPAC and Congress Based on Flawed Data
The Medicare Payment Advisory Commission’s (MedPAC) most recent report to Congress on Medicare payment policy contains a recommendation that the imaging equipment utilization rate assumption used in the formula that calculates practice expense reimbursement should be changed from 50 percent to 90 percent for MR, CT, and PET. The recent health care reform legislation under consideration in the House of Representatives calls for a 75 percent utilization rate assumption.
The equipment utilization rate is the amount of time during which an imaging center is open to patients that the equipment is actually in use. The higher the utilization rate assumption; the lesser the Medicare reimbursement for individual scans.
CMS currently assumes that this equipment is used 25 out of 50 hours per week, or 50 percent of the time that a practice is open for business. Either the 90 percent utilization rate assumption called for by MedPAC or the 75 percent assumption called for by the House legislation would add additional, double-digit (percentage) cuts to imaging on top of the $1.7 billion annual reduction required by the Deficit Reduction Act of 2005.
New Utilization Rate Assumptions Based on Flawed Data
MedPAC and presumably Congress based their calls for a change in the utilization rate on a 2006 MedPAC survey that looked at utilization rates of MR and CT in six large urban areas. MedPAC has acknowledged and the Centers for Medicare and Medicaid services agreed that this survey was not sufficient to drive national reimbursement policy – stating specifically:
“This survey is a first step in examining the use of imaging equipment. It was not nationally representative and it was not designed to determine equipment use rates. Its intent was to assess the feasibility of getting use rate data from the survey. It shows that the [sic] short survey instrument can be used to collect information on how frequently equipment is operating while achieving a high response rate. . . I do want to caution that this survey is not representative [of] anything.” (p. 237 and 242 of April 19, 2006 MedPAC meeting transcript).
A recent survey by the Radiology Business Management Association shows that the actual equipment utilization rate is only 54 percent nationwide and a much lower 48 percent in rural areas.
This huge discrepancy, between what MedPAC and Congress would mandate and what is actually happening in the clinical setting, will result in drastic reimbursement cuts that may leave minimal if any access to advanced imaging in rural America. Even suburban and urban providers may find it hard to continue to offer the same level of service — all leading to longer travel for care and longer wait times for patients.
MedPAC “Normative Standard” Approach Will Harm Legitimate Providers
In MedPAC’s 2009 recommendation they advise creating a “normative standard in which providers are assumed to use costly imaging machines at close to full capacity (45 hours per week, or 90 percent of the time that providers are assumed to be open). Such a normative standard would discourage providers from purchasing expensive imaging equipment unless they had sufficient volume to justify the purchase.”
Most radiologists, especially in rural communities, would be unable to reach the 90 percent “normative standard” sought by MedPAC. In addition to scheduled appointments which are often in the early morning or evening, many radiology practices provide imaging services to the community hospitals requiring them to be available more than 50 hours a week, making it virtually impossible for a typical rural provider to have anywhere near a 90 percent utilization rate. This is born out by the RBMA data.
Good Data Needed to Determine Accurate Imaging Equipment Use Assumption
The lack of sound data was cited by CMS when the agency decided not to increase the utilization rate assumption to 75 percent in 2007. ACR believes CMS should make an effort to find the actual utilization rate for equipment and apply this real number to the practice expense formula that determines imaging reimbursement. The College will continue to work with Congress and governmental agencies to formulate fact-based medical imaging reimbursement policies.
