Feds Target Radiology Imaging Payment Cuts

In the bulls-eye for cuts to find billions of dollars for health reform sit a wide array of physician radiology services whose annual price tag to Medicare has more than doubled to $14 billion between 2000 and 2006.

Services related to advanced imaging–specifically CT, MRI, and PET scans–could take much of the hit, with costs that have risen from about $3 billion to $7.6 billion in that time. Payments for MRI alone account for nearly half.

"Spending on advanced imaging, such as CT scans, MRIs, and nuclear medicine, rose substantially faster than other imaging services, such as ultrasound, X-ray, and other standard imaging," said the General Accounting Office report to Congress last summer. And that was just for Part B, Medicare's physician fee schedule.

A March report from the Medicare Payment Advisory Commission (MEDPAC) added: "The rapid volume growth of costly imaging services may be driven, at least in part, by prices that are too high."  

The GAO report said the increase was seen across multiple specialties, especially cardiologists and vascular surgeons, but also vascular and orthopedic surgeons, primary care physicians, and urologists.

As a result, federal officials, including the Senate Finance Committee, are looking at two major ways to lower what it pays for imaging providers:

1. They are considering a hotly contested move to require prior authorization, especially for advanced imaging technologies, similar to practices by many health plans. A Congressional Budget Office report last December suggests a savings of $220 million between 2010 and 2014 and about $1 billion between 2010 and 2019 with radiology benefit managers who would block unnecessary scans.


2. They are evaluating the controversial proposal to restructure the payment formula in such a way that lowers the value of equipment factored in the equation, resulting in a much lower reimbursement to the provider.

Radiology groups are opposed to both strategies, but acknowledge that the high increases in federal payments have made them a target. "To do the things they're suggesting without adequate data and research, without examination of alternatives, is problematic because it only addresses the costs without addressing why they have gone up so much," says Jonathan Berlin, MD, associate professor of radiology at Northwestern University Feinberg School of Medicine.

The Access to Medical Imaging Coalition is vehemently against using authorization managers to approve physician scan requests. Such managers "are for-profit management companies established by the health insurance industry to deny coverage for imaging services. Physicians who deal with RBMs (radiology benefit managers) say they undermine patient care, force patients to wait to receive needed tests, and cause delays in diagnosis and care," the coalition says.

The Medical Imaging and Technology Alliance has a similar view. "Based on insufficient data and analysis, the MedPAC report makes recommendations that will lead to dramatic Medicare cuts for imaging and have dire consequences for the diagnosis, treatment, and care of patients," said Ilyse Schuman, MITA's managing director.

The federal reports acknowledge that much of the growth in both expense and number of images is rooted in the growth of more sophisticated and costly technology that appropriately diagnoses and treats more complex patient conditions.

And while the legitimate need for such services has clearly increased as has the resolution capabilities of these devices, some of the greater demand is pushed by forces without necessary medical justification, according to the reports. The GAO report mentions a trend toward physicians ordering scans to defend themselves "against malpractice suits." Other reasons for more utilization include the influence of direct-to-consumer advertising, and a shift of the use from Medicare Part A (hospitals) to Part B (physicians' offices), the GAO said.