Some specialists will see extra cuts in Medicare pay

Specialties involving heavy use of MRI and CT imaging will see particularly large reductions, prompting worry that some practices will close.

By — Posted Nov. 16, 2009

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Some specialty groups are loudly protesting new Medicare payment policies that will boost some primary care rates starting next year at the expense of rates for certain specialty services.

In the 2010 physician fee schedule, the Centers for Medicare & Medicaid Services adopted several major changes to the practice-expense portion of the relative value unit system that determines pay for individual services -- along with more minor changes to the work and liability insurance RVUs. Because any changes must be budget-neutral, the expected results are modest increases in average Medicare pay for physicians traditionally considered to be in primary care, but larger reductions in average pay for some other specialists.

Coupled with the prospect of an across-the-board 21.2% cut to the conversion factor starting Jan. 1, the revisions represent a potentially fatal hit for some practices, especially those that provide imaging services, specialty organizations warned. CMS agreed in the final rule to phase in the RVU changes over four years, but the specialists said the cuts still go too deep too quickly.

One big change for physicians who provide imaging services is a decision by CMS to increase the imaging equipment utilization rate assumption within the practice-expense RVUs.

The amount of time Medicare assumes that advanced diagnostic imaging equipment is in use during physician office hours will rise from 50% to 90% over the next four years, decreasing the amount the program pays for each service.

As a result, radiologists face an average 5% cut in Medicare payments next year and additional cuts over the following three years. That would be on top of a 23% reduction in medical imaging rates from the Deficit Reduction Act of 2005, which the American College of Radiology said already has produced a $13.8 billion hit against the specialty.

Physicians said the cuts could harm patients by increasing wait times for imaging exams.

"It is hard to believe that our practice expense per hour would be less in four years to provide these services," said Bibb Allen, MD, chair of the ACR's Economics Commission. "We are certainly disappointed with the CMS payment rule. We think this will limit beneficiaries' access to imaging services."

Freestanding imaging centers in rural sections of the country, such as Alabama, where Dr. Allen is based, will be hit the hardest by these cuts, he said. The situation, he added, could lead some centers to close.

Cardiologists, who will be paid less because of the utilization rate change as well as other practice-expense RVU revisions, face an average cut of 8% next year and more cuts over the following three years. This will significantly reduce access to cardiovascular services, the American College of Cardiology warned.

"Private-practice cardiologists are taking a significant cut, and they're going to have lay off staff and close some services," said Alfred Bove, MD, ACC's president. "Some of the practices may even have to go under, and we'll see reductions in Medicare services to patients."

Both ACR and ACC are members of the Access to Medical Imaging Coalition, which issued a Nov. 3 news release stating the payment revisions could mean huge reductions for certain nonhospital services, including a 48% pay cut for pelvic CT scans, 46% for MRI scans of the chest or spine and 27% for cardiovascular-related services. The coalition also warned that facilities may close, harming patient access.

Tim Trysla, the imaging coalition's executive director, said surveys showed offices use imaging equipment far less than the agency estimates. "By pegging the utilization rate at 90%, CMS is adopting policy that isn't supported by data. While CMS clearly missed the mark with this rule, we are committed to working with the agency to provide informative data that regulators can use to determine an accurate and responsible utilization rate."

The ACC also said the CMS practice-expense information is flawed. "We've talked to CMS several times over the past few months, but they've said they need to stick with their data," Dr. Bove said. "Our position is the data they've collected is wrong and needs to be reviewed."

Survey data in dispute

The CMS based some of its RVU changes on new information from the Physician Practice Information Survey, a joint effort led by the American Medical Association and including 72 specialty societies -- among them the ACR and ACC -- and other professional health care organizations.

More than 7,000 physicians responded to the PPI survey, of which about 3,600 provided practice cost information. The AMA said it provided specialty societies with frequent briefings throughout the effort.

While the specialty societies vowed to continue pressing CMS to obtain better rates, some physician organizations said they were pleased with the primary care portion of the final fee schedule and the methodology used to determine the 2010 rates.

"The PPI is a much more valid way of gathering data and provides a more current methodology," said Lori Heim, MD, president of the American Academy of Family Physicians. "If you want to establish a strong health care system, we need to have a strong primary care base, and the funding bases in the system currently don't do that. So this is a good step in the right direction."

The American College of Physicians also supports the PPI data and appreciates the attention being paid to undervalued primary care services, said Brett Baker, ACP's director of regulatory affairs. But he called for an ongoing process so CMS can listen to and consider concerns brought by the specialty community.

The AMA defended the methodology behind the PPI survey, saying it met all the criteria CMS established to replace existing practice-expense data.

"This group effort was spearheaded by the AMA at the request of national medical specialty societies and Medicare, and it is the first time in nearly a decade that this information has been updated for all medical specialties," said AMA President J. James Rohack, MD.

The RVU changes were not the only major revisions in the final fee schedule. CMS finalized a proposal to remove the cost effect of physician-administered drugs from the calculation of the Medicare physician pay formula, a move that will mitigate future across-the-board reductions.

But Dr. Rohack said Congress still must adopt a permanent solution for the flawed Medicare payment system.

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How some specialties will fare

Federal officials are phasing in refinements to Medicare relative value units starting in 2010 that they say will set fairer payment rates for primary care services. But boosts to primary care doctors mean that some specialists will see reductions even before taking into account next year's scheduled 21.2% across-the-board cut. Here are some of the specialties seeing the biggest increases and the biggest hits in total 2010 payments.

Family medicine4%
General practice3%
Internal medicine2%
Interventional radiology-3%
Nuclear medicine-18%

Source: Centers for Medicare & Medicaid Services, "Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2010," Federal Register, Oct. 30 (link)

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