DRA II: CMS Proposes Slashing the Technical Component Again

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A proposed 90% equipment-utilization formula and brand-new lowball practice-expense data courtesy of the AMA will deal radiology a new round of cuts comparable to those contained in the DRA. The specialty faces dramatic cuts to the technical component in the proposed 2010 Medicare Physician Fee Schedule (MPFS), and these have triggered a vociferous response from organizations representing a broad spectrum of radiology stakeholders.

The RBMA has provided CMS with a detailed response in a letter dated August 27, 2009, expressing dismay and concern about the general downward trend in Medicare payments for imaging services and the failure of CMS to propose policies to curb the inappropriate utilization of imaging services caused by self-referral. Some members estimate the impact of the proposed MPFS to be in excess of 25% for global services, excluding the potential 21.5% reduction in the conversion factor.

A survey of RBMA members with a usable sample of 117 responses indicates that 73.5% would be forced to reduce staff, 73.5% would reduce overhead, 21.4% would limit the access of Medicare patients, and 62.4% would have to pay radiologists less. Particularly troubling for the vendor community is the fact that 85.5% say that they would forgo technology upgrades. Almost a third (29.9%) say that they would consolidate sites of service, and 21.4% would be forced to close a center.

Especially troublesome are the new data collected by the Physician Practice Information Survey (PPIS), which CMS will use to calculate practice-expense RVUs. First, the data are based on a low number of respondents (56). Second, as the RBMA points out, radiology’s practice expense per hour does not distinguish between hospital-based and office-based physicians; the RBMA believes that the practice expense could be significantly higher in OICs than in the hospital setting. The fact that nearly two-thirds of the surveys were completed by hospital-based radiologists would necessarily skew the data toward the lower hospital-based practice expenses.

Third, the large difference between the PPIS data collected by the AMA and the supplemental practice-expense data (based on 171 responses) collected by the ACR with input from practice managers suggests that the physician-only responses may not accurately reflect true practice expenses. Fourth, CMS has not made the PPIS data available for review.

“In an environment where there is acknowledgement that only half of direct costs are being covered by CMS, it is imperative that the methodology for recognizing and paying for indirect costs be robust and fair across all medical specialties,” the RBMA’s letter states.

The RBMA urges CMS to delay implementation of the data collected by the PPIS, allowing time to accrue additional survey respondents beyond the 56 physicians who reportedly responded to the AMA-sponsored survey. If CMS elects to proceed, the RBMA suggests that the PPIS be blended with the supplemental data collected by the ACR at the behest of CMS.

The ACR is highly critical of the quality of the PPIS data used to determine practice-expense RVUs in its August 27 comments to CMS, zeroing in on the fact that two-thirds of the 56 respondents were hospital-based radiologists who bill for professional services only and have no indirect or direct practice expenses. The college asks CMS to delay implementation of the data for one year while data quality is assessed.

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“The ACR is concerned that only 33% nonfacility billing is not representative of the true practice of radiology and that the survey is inappropriately biased to hospital-based physicians,” thus causing the practice expense per hour to decrease, the ACR’s comment letter states.

Pamela Kassing, MS, ACR senior director of economics and health policy, lays the odds at 50–50 that CMS will delay implementing the new practice expense data for another year. “There are some groups that are severely hurt, and there are others that benefit,” she notes. “It’s a budget-neutral redistribution. For those of us who have asked for a delay, the data are very weak.” Kassing says that the survey was so flawed that the AMA could use only a third of responses, and then, for radiology, only one-third of the respondents included office-cost data. “They want to revise reimbursement for 33,000 radiologists based on the data from 18 surveys,” she emphasizes.

Equipment-utilization Rate

Both the RBMA