CMS’s release of the 2015 proposed rule for the Medicare hospital outpatient prospective payment system (HOPPS) sets the stage to equalize imaging payments across sites of care. While the proposed rule for the Medicare Physician Fee Schedule (MPFS) shows little to no change for many CPT codes, the overall impact will lead to a reimbursement reduction for imaging services, with the exception of a temporary increase for mammography.
The proposed rule shows that Congress and CMS are paying attention to MedPAC's continued call for a narrower gap in reimbursement rates between hospital APCs and independent diagnostic facilities’ CPT codes.
We've analyzed the two proposed rules and examined the most significant repercussions for your program if incorporated into final rules released at the end of this year.
CMS sets its eye on site-neutral payment rates
In what is likely a first step towards equalizing imaging payments across sites of care, CMS is soliciting comments on a new modifier to collect data to determine the extent to which the shift towards hospital-based physician practices is happening.
MedPAC first brought up the issue of equalizing payments across sites of care in their March 2013 “Report to Congress.” At the time, MedPAC Senior Analyst Dr. Dan Zabinski said, the “shift in billing from offices to [hospital outpatient departments] increases program spending and beneficiary cost sharing without any significant change in patient care or quality.”
They then went further in the June 2013 report and identified five criteria that must be met in order for services to be equal in freestanding sites and hospital outpatient centers. They identified 24 Ambulatory Payment Classifications (APCs) that meet all five criteria, and 42 APCs that meet four out of five criteria. They have labeled these Group 1 and Group 2, respectively. Group 1 services would theoretically be equalized across all sites, while Group 2 services would see a narrowing of the gap in payment differential, though not quite site-neutral rates. The equalization in rates would likely be achieved by bringing hospital outpatient payment rates down to the level of physician offices when the office rates are lower.
Under MedPAC’s proposed scenario the following imaging exams would be affected:
The goal of the proposed modifier is to gain a better understanding of whether there are significant differences in resource costs for physician-owned imaging centers and hospitals by collecting data on practice expenses typically incurred by the respective sites.
CMS makes significant changes to APC methodology for CY 2015
The HOPPS proposed rule includes provisions that set the stage for CMS to begin paying for new episodes of care using its device-dependent APCs. CMS has developed 28 comprehensive APCs, two of which contain roughly 85% of all imaging affected.
CMS also proposes to change the APC placements for bundled breast biopsies and abscess drainage codes, resulting in increased payment rates compared to 2014 levels. CMS proposes to delete APCs 0685 and 0037 and place all needle biopsy procedures in APC 0004 and 0005. The approximate effect of this change on reimbursement is displayed in the table below.
Overall MPFS proposed rule impact by specialty
Moving from the HOPPS proposed rule to the MPFS proposed rule, CMS estimates revenue reductions for each specialty, stemming from proposed changes to the physician fee schedule in 2015. The graph below outlines potential revenue reductions for imaging-heavy specialties.
Please note that the radiology category refers largely to radiologist’s professional revenue, while the section called diagnostic testing facilities refers to the technical revenue received by physicians who provide imaging services in independent diagnostic testing facilities.
The 2015 proposed changes to the MPFS are consistent with the changes we observed in last year’s final rule. A notable exception is the cuts to diagnostic testing facilities which are not nearly as steep as in last year’s final rule. Cuts to diagnostic testing facilities were projected at 7% in last year’s proposed rule.
CMS seeking input on payment of secondary interpretation of images
CMS is soliciting comments to assess the appropriateness of Medicare paying physicians under the MPFS when physician provide subsequent interpretations of existing images. CMS is interested to know whether uncertainty associated with payment for subsequent interpretations of existing images prevents physicians from using or accessing existing images in cases where avoidance of a new study would results in savings to Medicare.
The specific questions CMS is seeking comments on can be found here starting on page 193.
Imaging still a target, but good news for mammography
Of the 80 CPT codes CMS proposed to add to its list of potentially misvalued codes, roughly 20% involve imaging exams. The list includes, interventional radiology, mammography, MRI of the abdomen, CT of the thorax, chest x-ray and x-ray of the knee.
CMS’s proposed rule would eliminate the mammography G-codes beginning CY 2015 and pay all mammograms using the CPT codes. This change is in recognition of the fact that the typical mammogram is provided using digital technology. CMS will reimburse the mammography CPT codes with the RVUs previously established for the G-codes, leading to a temporary reimbursement increase while CMS gathers more data to appropriately value these CPT codes.
Margins are shrinking—here's what you can do about it
In today’s environment of constant reimbursement cuts, tactics for maximizing revenue capture are crucial to your bottom line. Watch our archived webconference to learn 13 new ideas for increasing imaging revenue.
Register for this year’s national meeting to learn how imaging leaders can demonstrate imaging’s value to internal and external stakeholders in the face of consistent reimbursement cuts and a shifting health care landscape.