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Aug 20

Imaging Providers Face Additional Medicare Cuts

Diagnostic imaging providers could be hit with additional Medicare cuts under a bill approved by the U.S. House of Representatives August 1. Medicare currently pays 25% less for additional adjacent body sections imaged on the same day with MR or CT. The bill would double the discount to 50%. This comes on top of the substantial Medicare cuts mandated by the Deficit Reduction Act (DRA), which went into effect January 1. The provision was included in the Children’s Health and Medicare Protection (CHAMP) Act of 2007, which addresses a number of Medicare payment issues. The measure also:

  • Adjusts certain factors used to calculate practice expense. Currently the Centers for Medicare and Medicaid Services (CMS) assumes imaging equipment is being utilized 50% of the time that a facility is open. This provision directs CMS to assume a new utilization rate of 75%.
  • Directs CMS to lower the interest rate assumption for the purchase of imaging equipment to the "fair market rate not to exceed 11%." CMS currently assumes the interest rate is 11%.
  • Discontinues the practice of global billing.
  • Mandates facility accreditation as a condition of Medicare reimbursement.
  • Eliminates a projected 10% cut for 2008 under the current single sustainable growth rate (SGR) formula, replacing it with an increase of at least 0.5% in 2008 and 2009.
  • Divides the SGR formula into six separate physician services categories: primary care and preventative services, other E&M, surgery, anesthesia, minor procedures, and imaging. Variances in growth of the six categories will produce six separate conversion factors. Slow growth categories will receive positive reimbursement update, while fast growth categories will receive negative reimbursement updates.

The Senate version of the SCHIP bill, approved August 2, does not contain any of these provisions. Differences between the two bills will have to be worked out in conference when the House and Senate return in September.

About Reed Tinsley, CPA

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