February 15, 2018

ACR Discusses Cost Center Policies with CMS

American College of Radiology (ACR) representatives and consultants met with the Centers for Medicare and Medicaid Services (CMS) February 12 to recommend an additional one-year delay of the agency’s CT and MR cost center policies for both inpatient and outpatient prospective payment systems.

CMS’ has delayed the use of CT and MR cost centers by hospitals for 2018 but plans to fully implement it by January 1, 2019.

The meeting involved Liz Richter, deputy center director for the Center for Medicare at CMS; Norman Thomson, MD, MBA, chair of the ACR HOPPS/APC Committee; Kurt Schoppe, MD, advisor to the Relative Value System (RVS) Update Committee; ACR senior economics staff and consultants.

The ACR has commented on the RTI Cost Compression Study, an influential examination of Medicare Diagnostic-Related Group rate calculations, and has pushed forward with specific criticisms and recommendations for Medicare CT and MR cost centers since 2008.

The RTI study hypothesized that the development of cost centers would prevent high-cost equipment from being underpriced and low-cost equipment from being overpriced, thus compressing prices to a common median.

At the meeting, the ACR presented data showing the opposite has proved true. For example, in the hospital outpatient setting, a CT of the abdomen without contrast is paid the same rate as an ultrasound and x-ray exam series of the abdomen. The codes for these three studies reside in the same ambulatory payment category.

The ACR also provided evidence indicating the problems the CT and MR cost center methodology was designed to solve no longer exists.

The ACR asked CMS to rescind the policy that requires the use of CT and MR cost centers and to allow hospitals to revert to their previous policy of reporting all their equipment costs under the diagnostic radiology cost center. The ACR provided technical guidance showing how CMS can unravel this policy.

ACR staff is looking forward to the release of Medicare’s Inpatient Prospective Payment System (IPPS) proposed rule in April and the Outpatient Prospective Payment System (OPP) proposed rule in early July to determine if CMS has accepted its recommendations.