Radiology Braces for Change Ahead

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Some US employees still enjoy Cadillac-style health plans in which little is paid out of pocket and coverage includes almost every health need, but health care costs for its workers helped send Cadillac maker General Motors into bankruptcy. Moreover, for every worker or family with a Cadillac plan, there’s a family with big deductibles, limited coverage, or no health insurance at all. For the past several weeks, Congress has been on display wrestling with this problem, taking its members, health providers, and the public at large on a trip to health-reform school. For radiology, the health-reform stakes are high, especially since ballooning payments for imaging over the past decade have marked imaging as a target. There is fear that the golden age of radiology may be drawing to a close. All those advanced imaging tests that help save lives and guide referrers may now be held back by payors that are watching every dime.
imagePam Kassing, MPA, RCC
Bob Wood is president of BGR Government Affairs, LLC, one arm of a major Washington, DC, lobbying company. He says, “This is very different from health reform in 1993, when traditional business interests, as well as provider groups, came out in opposition. This time, there are a number of provider groups that are OK with health reform, or at least not willing to come out in opposition. You couple that with large employers or the US Chamber of Commerce and the National Association of Manufacturers (and others) trying to get out of the pension business, and very few groups are opposing health reform.” Reform is not just what is being proposed in Congress, either. CMS is also signaling a willingness to cut many of its reimbursement amounts for imaging services. Michael R. Mabry, executive director of the RBMA, says, “This is the perfect storm.” He offers an unsettling number: “Medicare intends to use a new practice-expense RVU. Currently, radiology has $204 per hour, and Medicare is proposing something in the $130–$140 range. That change alone will cut both the technical and professional components. We’re still trying to figure out how to quantify that impact.” Quantifying impact, right now, is a huge problem, since health reform is a rapidly moving target. Both houses of Congress are entertaining and altering proposals daily, and CMS is creating side bets through its own proposals. What this leaves radiology to do is focus on some key issues and wait to see what happens next. Utilization Management If there is a mantra for radiology, these days, it is “the right test, for the right reason, at the right time.” Bibb Allen, MD, FACR, chair of the ACR’s economics commission, invokes that phrase; so do Mabry and Pam Kassing, MPA, RCC, the ACR’s senior director of economic and health policy. The reason that this mantra is repeated is that it describes concisely the ACR’s stance on utilization management, one of the key health-reform issues for radiology. To achieve optimal utilization, the ACR advocates use of a computerized decision-support tool (ideally, accessible online) by ordering physicians. Decision support should incorporate exam-appropriateness criteria and, if need be, consultation between the referring physician and a radiologist. The ACR has memberships in the Access to Medical Imaging Coalition and, according to Kassing, in a new electronic-ordering coalition, both of which could grease the wheels for a decision-support effort. “We believe Congress should mandate an order-entry system where the referring physician orders the study and is then given feedback,” Kassing says. The ACR argues that decision support is a superior and less punitive way to control overutilization than the alternative favored for Medicare by the White House (but not yet written into legislation): the use of commercial radiology benefit management (RBM) companies to preauthorize high-end outpatient scans for the Medicare and Medicaid populations. Both Kassing and Allen say that an RBM-use clause will probably find its way into the Senate health-reform bill that is still being formulated. “We will have lots of comments,” Allen says. The RBMs are telling their story to Congress, too. According to National Imaging Associates (NIA), a major RBM, between 1999 and 2005, the number of US imaging centers increased 52%, while the growth in imaging volume was 40%, with insurers’ costs for imaging growing 18% to 20% annually over that span. Moreover, according to NIA, in 2006, advanced imaging such as CT and MRI exams accounted for 54% of all imaging expenditures. NIA also contends that imaging makes up 10% of all US health care costs, which now exceed $2 trillion per year. Allen acknowledges that there was a growth spurt in imaging earlier in this decade, but he says that this increase has reached a plateau. “We have two years of Medicare spending data that show that the utilization of advanced imaging is in line with all Medicare,” he says. “The preliminary data for Medicare spending in 2008, based on the CMS early file, show overall Medicare spending growth of 3%, with advanced imaging at only 3%. Basically, you can infer, from that, that imaging is not an outlier.” One thing that radiology does not want, Allen says, is an RBM interposing itself between physicians and Medicare patients and ruling on the appropriateness of advanced tests. In the past, Allen says, CMS had agreed to a pilot study to look at decision support as an alternative to the use of an RBM, but that hasn’t been mentioned in the health-reform proposals so far. Allen says that the ACR will reintroduce the issue and prepare to help with those demonstration projects. “Certainly, we don’t need a gatekeeper like an RBM,” he adds.
imageBibb Allen, MD, FACR
The RBMs, however, are telling Congress that they can save CMS money right now, with no decision-support rollout needed. Michael J. Pentecost, MD, FACR, a one-time Georgetown University professor of radiology who now works as associate chief medical officer for NIA, says, “We are advocating that Congress authorize Medicare to use RBMs for fee-for-service care in an effort to slow the increase in utilization.” Pentecost says that the RBM preauthorization model has been tested and refined to control imaging utilization successfully in the private sector and can be easily adapted to Medicare and Medicaid. “It’s not that decision support isn’t a good idea,” he says. “It’s just unproven. Preauthorization is a time-honored process, used since the mid-1990s, that’s proven durable and has been pretty well accepted. The ACR proposal is more futuristic.” Another aspect of imaging utilization is physician self-referral. Currently, physicians are prohibited from referring patients to facilities in which they have an ownership interest. An exception, however, is that they can refer patients for imaging using equipment that they own if that equipment is in their own offices. This in-office exception has long drawn criticism from the ACR, which blames self-referral for some of the jump in imaging expenditures. A bill (HR 2962) was introduced in the House to end the in-office exception with the ACR’s support, but the draft version of the House reform bill passed by the Energy and Commerce Committee before House members left Washington for the August recess did not contain the expected amendment against self-referral. Utilization Rates A second big concern for radiology, as CMS rule changes are proposed and health reform proceeds, is the rate of equipment utilization. Medicare now sets its technical and professional fees partially on the basis of how often the imaging equipment is used, with 50% use as the current standard. That means, by CMS reckoning, that half of the time that a machine is available, it is being used to scan a patient. Congress, however, has proposed changing that standard to 75% (not including radiography, ultrasound, and other relatively low-cost imaging equipment). More alarming, CMS itself is proposing a 90% utilization rate for all equipment costing more than $1 million. Raising utilization rates will have the effect of lowering per-study reimbursements. How much will they be reduced? The ACR has estimated decreases of as much as 30% for MRI and CT if the CMS $1 million rule is applied. Mabry says that the drop could be larger. “Our members tell us the cuts could be 40% or more on the technical side,” he says. Kassing says that CMS is basing its proposed utilization-rate increase on data provided by the Medicare Payment Advisory Commission (MedPAC), and that these data, based on studies conducted in only six (largely urban) markets, are skewed against rural imaging providers. “The ACR doesn’t think the MedPAC data are representative of the country,” she says.
imageBob Wood
The RBMA takes the same stance, and to prove the case, it has just completed an equipment-utilization survey that does, in fact, show lower modality-use rates in rural settings. To complete its study, the RBMA contacted 1,084 of its members who said that they had imaging centers. Of those, 17 responded to the survey. Those 17 represented multiple sites, in some cases, and 46 site surveys were actually returned. Nine respondents out of the 46 were classed by zip code as rural, with the remaining 37 classed as nonrural. Medicare-based utilization rates were compiled as percentages and listed by lowest quartile, mean, median, and upper quartile. In all categories, even the upper-quartile figures failed to reach the 90% rate proposed by CMS. Only the upper-quartile percentages for CT and MRI exceeded the 75% rate being considered by Congress. Data gathered in the study support Mabry’s contention that actual equipment-use rates are closer to those that CMS is already using than to the higher rates being proposed. “We found utilization rates more in line with the rate that Medicare uses right now,” he says. Unfortunately, the RBMA survey did not break out advanced imaging in comparing rural and nonrural use rates; nonetheless, the data support the idea that rural imaging facilities will suffer most if the 75% or 90% use rates are imposed. The comparable figures for nonrural sites were all at least 8% higher than for rural sites. “Imaging centers that serve rural patients are particularly vulnerable to any increase in equipment-utilization rates,” Mabry says. At the conclusion of its survey, the RBMA called for more rigorously acquired data to be compiled by imaging providers and equipment manufacturers. Kassing and Allen agree this is the best way to come up with accurate data. Allen says that imposing the 75% or 90% rates will be the death knell for some imaging providers. “I think we would see a lot of imaging centers have to close, particularly rural ones,” he says. On the other hand, he suggests, hospitals with radiology departments that compete with imaging centers might be glad to see imaging centers fail. “If I were a hospital, and there was this legislation that might close a bunch of my competitors, I might support it,” he says. Declining Reimbursement Another serious issue facing radiology, as CMS proposals and health-reform changes are advanced, sounds particularly ominous: a drastic cut in Medicare reimbursement for physicians’ services. As it turns out, however, a key part of this proposal may be only a frightening shadow on the wall. CMS must adjust its sustainable growth rate (SGR) formula yearly to take into account not only current cost increases for health care, but also old debt from previous SGR conversions that resulted in deficits. By now, that old debt is over $300 billion, Kassing reports. Because of that, CMS announced, in March 2009, that unless Congress rules otherwise, a decrease in the conversion factor in the Medicare Physician Fee Schedule in 2010 will drop reimbursements to physicians overall by 21.5%. “That’s the cut to get back on track with the same old formula,” Kassing says. “It requires addressing debt (with that huge amount).” If the cut does take place, the ACR has estimated that radiologists’ fees would drop 11%, with fees for some subspecialty radiologists dropping as much as 19%. Kassing says that Congress is likely to enact remedial legislation, just as it has in previous years, to keep actual physician reimbursements in line with the economy. This would mean swallowing more debt, to be dealt with at some future date. “It looks like the proposed fix now is a little over a 1% increase,” Kassing says. “The last proposal I heard was for a 1% increase in 2010 and another 1% in 2011, then none in 2012 and recalculation. A floor of a 3% cut would also be in effect, but I’m not sure where Congress is on that.” Kassing adds that the ACR is deeply concerned about a second reimbursement cut: the drop from roughly $200 to $130 in a radiologist’s hourly practice expense, as detailed in the 2008 Physician Practice Information (PPI) Survey commissioned and endorsed by the AMA (as well as other physician organizations). The PPI data are another marker that CMS uses to set reimbursements for physicians. If this reduction takes place, radiology will be hurt badly, Kassing says. “Medicare did some examples in its proposed rule for some studies, and studies like screening mammography were looking at a global cut of 26%. That was representative of all the radiology studies. The cuts are huge,” Kassing says. She notes, as Mabry did, that it’s hard to gauge what the impact will be if this change takes place. “We can’t really run the impacts on it because the AMA data are confidential to Medicare, and it’s hard to make specific comments on data flaws,” she says. Kassing says that the ACR ran its own practice-cost survey in 2004 and submitted those data to Medicare. She stresses that those were high-quality data, and that the ACR will ask Medicare not to replace them with data of lower quality. “We may ask for our old data to be blended with their new data. If the impacts are too huge, we’ll ask for a four-year phase-in period,” she says. Allen adds, “Office-based practice expense, hours worked, and all kinds of things go into that PPI formula, but the outcome of the survey is in dollars per hour. We know that radiologists work harder, and that dilutes the practice expenses over more hours. We will have extensive comments to CMS over the next few months.” Related Issues In addition to the four primary issues of RBM use, utilization-rate increases, SGR adjustments, and practice-expense reductions, there are four other concerns for radiology as health reform and CMS adjustments proceed. The first is accreditation. By 2012, CMS has mandated, centers performing advanced imaging tests will have to be accredited by a recognized accrediting body. The ACR already has an accreditation program; Kassing says that the ACR will submit its program to meet CMS standards by a November 2009 deadline. The Joint Commission also will reportedly seek approval as a CMS-sanctioned program. Kassing says that the accreditation mandate will apply to imaging centers, nonradiologists with imaging equipment, IDTFs, and anyone else who wants to perform CT and MRI exams. “The impact, for us, will be that we will get busy to get people on board,” she adds. A second concern is the value of imaging to medicine. Allen says that legislation proposed by the House of Representatives would raise the physician-reimbursement conversion factor for primary care physicians, rather than for other practitioners. “Credit the family physicians, I guess,” he says of their lobbying efforts. Allen says that the ACR has made no recommendation on physician pay. “We don’t believe physician pay has been the driver on the overall increase in health care costs,” he says. “We are trying to protect our work product and the overall value that imaging brings. Imaging itself saves people’s lives. Maybe the ACR has not done as good a job as it should to show how much advanced imaging is saving in dollars. There are data on head injury and appendicitis, but those have been trumped by the overall growth in imaging in 2005 and 2006, which still seems to carry the day, even in 2009.” The third concern involves revised delivery systems, pay for performance, and quality of care. Allen says that the ACR is working to devise ways to propose what imaging might look like under capitation, bundled payments, accountable care organizations, and similar arrangements. He says, however, that the ACR has not developed a health-reform plan of its own. “For us to come up with an alternate proposal would be a total waste of our time,” he says, because the organization is already so busy in its battles over existing proposals. Kassing calls the current CMS voluntary pay-for-performance incentives pay for reporting, in actuality. “If you report your measures, then you get a bonus,” she says. She notes that this is a step in the right direction. Soon enough, quality and performance measures will be mandatory. She says, “We are encouraging our members to participate in this voluntary program of actually reporting on your claims.” Kassing adds, however, that proposals in which services would be bundled or reimbursements would be handled through a primary care physician raise a caution flag for the ACR. She says, “We don’t want to be bundled in with all other care. Whatever that would look like as a DRG-like model, it’s hard (as far as quality measures and outcomes are concerned) to show the contributions of specialty care.” She says that concepts like gain sharing and mixed payments would be preferable to having primary care physicians dole out reimbursements. “That would cause a lot of conflict,” she says. A fourth concern is comparative-effectiveness research. “The Institute of Medicine has suggested 10 or 11 imaging procedures that need more research,” Pentecost says. He mentions virtual colonoscopy, breast MRI, imaging for lower-back pain, and obstetrical ultrasound in normal pregnancy as tests of questionable utility or efficacy. Of course, RBMs might like to see research done to eliminate some tests from the care lexicon. Wriggling underneath the surface of health reform is rationing, which comparative-effectiveness research would inevitably bring to the fore. That doesn’t surprise Allen, who says that the RBMs are already there. “We believe RBMs, or gatekeepers, are rationing in sheep’s clothing,” he says. Apparently, Congress has similar concerns about comparative-effectiveness research. Just before it recessed for the August break, the House approved, by a voice vote, an amendment prohibiting comparative-effectiveness research from being used to deny or ration care. The Big Picture Wood is a Washington lobbyist, but he’s also looking at health reform from a former insider’s position. Wood was chief of staff for Tommy Thompson, HHS secretary from February 2001 until January 2005. “There are very few Republicans at the table in this health-reform debate,” Wood says. “You don’t have a lot of the folks that we traditionally had in the fight, and the political climate in Washington for all health care providers is a little tenuous. They’re not supporting reform, but they’re absolutely not opposing it.” Wood says that the public plan, which would give the public an option of government-sponsored health care (a sort of Medicare for everyone), isn’t likely to fly, despite the Democratic majority. “The best chance for it is as a fall-back, five or six years down the road. I don’t think the public plan will be something that they lead with,” he says. Wood predicts that there will be “a very significant Medicaid expansion” that has some BGR clients worried. “We have a number of hospital clients very concerned, from a workforce standpoint, that if demand is increased, they want to make sure they can meet that demand. That is one of the real big issues. Do we have the infrastructure to meet this demand?” Wood says that providers are also worried about fee cuts and who will be setting fees, and whether Congress will make the decisions or turn them over to an entity like MedPAC. “The delivery-system reforms are very limited, and the easiest thing to do is look at previous MedPAC recommendations,” Wood says. “There will be relative across-the-board cuts for everybody. I look at what the MedPAC recommendations have been the past couple of years, and I’d say there’s at least a 50–50 chance that they will be what’s in this bill.” Where does that leave radiology? “The imaging industry is in the top five, based on utilization,” Wood says. “It’s going to take a whack. I don’t think there’s any doubt.” Will health reform itself fly? “I think the President will be able to have a Rose Garden signing ceremony,” Wood says, “but it won’t be nearly what people [concerned about the uninsured] had hoped for; maybe it will cover half the lives.” George Wiley is a contributing writer for Radiology Business Journal.