In 2019, the ACR addressed an estimated 8% reduction in payments to radiologists in the Medicare Physician Fee Schedule (MPFS). Now, a year later and in the middle of a pandemic, the 8% reduction has increased to 11%.1 How did this happen?
These reductions in payments are not technically targeted towards our specialty and our services in the same way as a multitude of previous reimbursements cuts. These cuts are solely the result of long-standing budget neutrality restraints on payments under the Medicare program, which directs the increases in expenditures within the program to be offset by decreases in other expenditures so that the relative cost of the entire program to the U.S. government remains flat. As previously stated in this column, the AMA Current Procedure Terminology (CPT®) Editorial Panel and Relative Update Value Committee (RUC) moved forward a series of changes to the outpatient Evaluation and Management (E&M) CPT codes that lead to significant upward revaluation of relative value units (RVUs) finalized for the 2021 program year.2 The “pay for” required by budget neutrality proposed by CMS thus far has been an adjustment to the Part B MPFS Conversion Factor (CF) — a fudge factor to keep overall physician payments relatively flat.
What this means for us is that all physicians will ultimately pay for the increase in valuation in E&M services through the decreased CF, but those who bill proportionately more of the newly revalued E&M services will have the decrease in the CF offset by the higher value for these services. In effect, this methodology chooses winners and losers. Radiologists don’t typically bill for E&M services; therefore, we have nothing to offset the decrease in the CF. Medicare estimated a –8% reimbursement impact of this policy on radiologists in the 2020 MPFS for implementation in 2021. The situation worsened in the 2021 MPFS, in which Medicare has a revised impact on radiologists of –11%.
Did CMS make an error in calculation? The answer is no. CMS instead unilaterally decided to adjust additional categories of E&M services upwards, stating that these services were similar enough to outpatient E&M services that upward adjustment was warranted. These additional E&M services included ED, end-stage renal disease, transitional care management, cognitive impairment assessment and care planning, maternity services, therapy evaluation, psychiatric diagnostic evaluation, and psychotherapy services — as well as initial preventive physical examination and initial and subsequent annual wellness visit E&M services.
The bad news is that the upwardly adjusted services would have been revalued by the RUC over the next few years anyway, and eventually placed into the fee schedule with associated CF impact (which has now occurred earlier). The really bad news is that there are other E&M services yet to revalued by CMS, including inpatient and consultative service E&M services. These will eventually also strain the CF and lead to further decreases in overall reimbursement to radiologists. And the news probably doesn’t get better as CMS prioritizes bringing innovative E&M delivery methods to Medicare beneficiaries, such as expanding telehealth services.
The U.S. leadership is promoting patient-centric innovation, as reflected in President Trump’s Executive Order regarding telehealth.3 But what about innovation in radiology? Our specialty is at the cusp of an innovation explosion with the continued advent of AI applications transforming clinical practice. Beyond basic concerns about access and keeping practices’ doors open, can we possibly bring these innovations to patient care without vehicles for payment? These are questions that will be addressed in the coming years and in a future Bulletin column.
In the meantime, the ACR is fighting hard to prevent these cuts from being enacted. The College has convened a multispecialty coalition, including the American College of Physicians and the AMA, to lobby Congress to intervene. Congress has several options not just limited to increase budget defects by writing a yearly check for stabilizing the CF. For example, the American Taxpayer Relief Act of 2012 provided a one-year patch for the previously flawed Sustainable Growth Rate methodology preventing physician payment cuts by redistributing funds from other Medicare programs (including inpatient care, uncompensated care, end-stage renal disease treatments, and Medicare Advantage plans).4 Given the economic tumult brought on by COVID-19, enacting similar such legislation is an uphill battle. However, history has shown congress can find alternatives to stabilizing the physician fee schedule — without forcing physician winners and losers.