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Primary Care Wins, Imaging Loses, Under New CMS Proposal

John Commins, for HealthLeaders Media, July 2, 2009

Farley says the notion that imaging equipment is in use 90% of the time is "insane." He says the CMS recommendation is based on a 2006 survey of imaging use at six large urban hospitals.

"At the time, when they did it, even the head of MedPAC said these numbers aren't reflective of what is going on nationwide and shouldn't be used for calculating imaging reimbursement. CMS agreed, but nonetheless here it is," he says.

Farley says a more comprehensive survey by the Radiology Business Management Association determined that the average national usage for imaging equipment is about 58%, and drops to 48% in rural areas.

The RBMA also estimates that a 90% utilization rate for CT and MRI scans alone would translate into an additional 30% reimbursement cut, on top of a 23% hit that imaging services took from the Deficit Reduction Act of 2005.

"You are talking about a cut that will literally affect whether or not a provider can keep the doors open and the lights on. You are talking about a severe impact, not an inconvenience," Farley says.

He says imaging has become the flogging post for healthcare reform. "Certainly we feel like there are a lot of eyes on radiologists these days," he says. "We feel like, particularly with the cuts that have already been enacted, the volume and dollars spent in our area of medicine are very much in line with the physicians services overall, and shouldn't be singled out to this effect."

The proposed changes would affect payments beginning calendar year 2010, and could impact more than 1 million physicians and non-physician practitioners who are paid under the MPFS, which sets payment rates for more than 7,000 procedures in physicians' offices, hospitals, and other healthcare settings.

CMS is also proposing to:

  • Remove physician-administered drugs from the definition of "physician services" in anticipation of enactment of legislation to provide fundamental reforms to Medicare physician payments. While the proposal will not change the projected update for services during 2010, CMS projects that it would reduce the number of years in which physicians are projected to experience a negative update. AMA President J. James Rohack. MD, called the proposal "a major victory for America's seniors and their physicians."
  • Implement a mandate in the Medicare Improvements for Patients and Providers Act of 2008 that suppliers of the technical component of advanced imaging services be accredited beginning Jan. 1, 2012 by designated accrediting organizations. The accreditation requirement would apply to mobile units, physicians' offices, and independent diagnostic testing facilities that create the images, but would not apply to the physician who interprets them.
  • Implement provisions to promote improvement in quality of care and patient outcomes through revisions to the Electronic Prescribing Incentive Program and the Physician Quality Reporting Initiative. Professionals or group practices that meet the requirements of each program in 2010 will be eligible for incentive payments for each program equal to 2% of their total estimated allowed charges for the reporting periods. CMS is proposing to simplify the reporting requirements and is also proposing a new process for group practices to be considered successful electronic prescribers.
  • Refine Medicare payments to physicians, which are expected to increase payment rates for primary care services. The proposals include an update to the practice expense component of physician fees. For 2010, CMS is proposing to include data about physicians' practice costs from a new survey, the Physician Practice Information Survey, designed and conducted by the AMA.
  • Stop making payments for consultation codes typically billed by specialists at a higher rate than evaluation and management services. Physicians will instead use existing E/M service codes when providing these services. The resulting savings would be redistributed to increase payments for the existing E/M services.
  • Increase the payment rates for the so-called "Welcome to Medicare" visit to be more in line with payment rates for higher-complexity services.
  • Refine how Medicare recognizes the cost of professional liability insurance in its payments. These changes would have a modest impact, but they will promote payment equity by redirecting the portion of Medicare's payment for professional liability insurance to those physicians that have the highest malpractice costs.

Taken together, CMS says refining the practice expenses, eliminating payment for the consultation codes and revising the treatment of malpractice premiums would increase payments to general practitioners, family physicians, internists, and geriatric specialists by between 6% and 8%.

"Primary care pay needs to go up and specialty care pay needs to come down," Epperly says. "When that gap narrows, the students coming out of medical school will redirect their choices for workforce much more into primary care than away from it."

CMS will accept comments on the proposed rule until Aug. 31, and will respond to all comments in a final rule to be issued by Nov. 1.


John Commins is a senior editor with HealthLeaders Media.

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