The Great CT Bundling Heist of 2011

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Medicare is looking for misvalued imaging codes—and it has already found several for which it has reduced payment. Its efforts have dismayed radiologists. Facing more revenue losses from CMS and the private insurers that follow in the agency’s footprints, radiologists feel targeted and, as a specialty, misvalued themselves.

Gary Dee, MD, treasurer of Midstate Radiology Associates, Inc (Wallingford, Connecticut), says, “I understand that Medicare has no money, but the private insurance companies are taking money out of my pocket and putting it in their pockets. It’s only going to their profit margins.”

Since the beginning of 2011, Medicare’s imposition of a new bundled CPT® code on a combined CT exam of the abdomen and pelvis has severely decreased imaging-center revenues. Many radiologists (including Dee) are particularly upset that big insurance carriers are following Medicare’s lead by imposing the same cut on the combined procedure themselves, using the new single-payment code for a CT exam of the abdomen and pelvis for what was formerly reimbursed as a two-code exam of separate, though contiguous, body parts.

“I understand Medicare,” Dee says, “but I don’t think the private insurance carriers necessarily have the right to follow it. My health-care premiums are up 13%, and this change is taking 25% out of my practice, too. This is bleak.”

Midstate Radiology Associates is a 10-physician practice in central Connecticut that operates seven imaging centers and reads for MidState Medical Center, a hospital in Wallingford. “A solo practice of 10 people is not going to take on the Anthems and Aetnas,” Dee says. “The ACR® is doing the best that it can. We’re working longer and harder, but that’s not enough.”

John A. Patti, MD, FACR, a thoracic-imaging specialist at Massachusetts General Hospital (MGH) in Boston, is chair of the ACR’s board of chancellors. He notes that the new bundled abdomen and pelvis code flows from a process that has been ongoing for years, but has recently been accelerated. Key to that acceleration have been reimbursement evaluations for CMS done by the RVS Update Committee (RUC) and a push by the Medicare Payment Advisory Commission (MedPAC) for more bundled codes.

“From our perspective,” Patti says, “this is really a process that has been going on at the RUC for quite a while. It was generated by impetus from CMS, and particularly from MedPAC, for what they refer to as correct pricing. Initially, codes were reviewed every five years for misvaluation. That was very rigorous and defined, and did result in changes to many codes.”

Patti continues, “Then, CMS and MedPAC decided this review of misvalued codes needed to be stepped up; they also began looking at procedures that were paired more than 95% of the time. That screening was then dropped to about 90%—and now we are embarking on a screening level of 75%. Any two CPT codes, in any specialty, that are submitted together more than 75% of the time are now open to review. That will be for 2012, and there will be a lot of radiology codes that fall into that category.”

The bottom line, as Patti traces it, is that radiologists should expect more imaging procedures that are frequently performed for a patient on the same day to be bundled under a single CPT code that reduces reimbursement, just as has happened with the newly bundled abdomen and pelvis code for CT exams.

“I don’t see this ending. The pressure is still on to look at these codes for bundling. If codes are submitted together more than 75% of the time, then the CPT Editorial Panel will have to look at those codes. The end point is money. I don’t think CMS will let up,” Patti says.

Greater Impact

While the recent bundling of CT exams of the abdomen and pelvis might appear, at first glance, to be minimally detrimental financially, it has turned out to be anything but that. The dual exam is a common procedure. The exam can also be performed with contrast, without contrast, and before and after contrast, adding to the financial impact and complexity when the codes are bundled and paid as one.

Just how much the bundling is costing radiology clinics and hospital-based practices is impossible to assess, since the bundling has only been in place since the start of the year. Dee says that his aggregate first-quarter returns for this year are down 25%, compared with 2010. He acknowledges that some of that decrease is probably due to reduced demand for advanced imaging generally, but a