The 2015 proposed changes to the Medicare Physician Fee Schedule (MPFS) are consistent with those from previous years, continuing to whittle away the revenue stream of radiologists. The current proposal from the Centers for Medicare and Medicaid (CMS) estimates revenue reduction impacts for each specialty based on changes to the fee schedule. While the overall impact to radiology is estimated at two percent, there are some notable changes proposed that may cause the impact to be significantly higher in certain situations. These changes include adjustments to direct and indirect practice expense estimates, a continued emphasis on misvalued services and a potential expansion of payments for the secondary interpretation of images. Harry Purcell, operations manager for Zotec Partners, highlights the proposed changes relevant to radiology and explains some of the potential fiscal ramifications based on the proposed schedule for 2015 as the industry awaits the release of the final rule later this year.

Changing the equation

Even minor adjustments to the basic formula for calculating reimbursement can have an effect on the result. The adjustments may come from expense inputs, from changes to the conversion factor, or to the geographic practice cost index (GPCI), which are all factors in the formula used to determine reimbursement. Some of the proposed adjustments are minor, but some, such as the reduction in the area of technical expenses, are significant.

The practice expense input into the relative value unit (RVU) has been significantly reduced due to lower costs associated with digital imaging versus analog imaging; an adjustment based on the recommendation by the Relative Value Update Committee (RUC) to reflect the film-to-digital migration that is occurring in the industry. Many common procedures will be affected by this adjustment. “As an example, the payment rate for a chest x-ray is facing as much as a 17 percent reduction, based on the change in the physician fee schedule,” says Purcell.

Outpatient imaging center operators have a vested interest in the technical portion of services and the reimbursement of those services and may want to begin estimating the fiscal ramifications of how the new RVU values assigned to technical services will impact their practices.

“I’m not sure that many people within the radiology specialty fully understand the potential impact of this change. If you look at the impacts as a whole, it would appear to be smaller—it is estimated at two percent. There is a caveat, however, that I think deserves special emphasis this year. Though the estimated impact to radiology may only be two percent, those that operate in an outpatient imaging center may sustain a much higher impact because of the shift in cost for technical services.”

Additionally, although there was a zero percent update mandate in the conversion factor from January 1 through March 31, 2015, there was a small adjustment, from $35.8228 to $35.7977 to maintain budget neutrality that will affect reimbursement. The GPCI, another factor in the reimbursement calculation, is set at 1.0 through the end of March 2015, but if that rate is not extended, it may drop. Using a multiplier of less than 1.0 in the calculation will reduce the overall reimbursement amount. The GPCI, which has been established for every Medicare payment locality for each of the three components of a procedure's RVU, is tied to cost of living and has the potential to reduce reimbursement in some areas.

“It’s critical to understand that all of the changes to the individual factors in the equation have a compounding effect on the result. It’s also important to point out that any effects we see this year will be further compounded by sequestration,” Purcell adds. “In any case, I think it’s an important first step that groups begin to do some calculations as to what the impact to their practice may be, based on the new values assigned to procedures, keeping in mind that the final rule will be published near the end of the year. The American College of Radiology (ACR) provides a great resource in its table of estimated impacts. I would recommend that groups start there and apply any changes to their volumes to get the weighted average of those impacts.”

Notable coding changes

With the publication of the 2015 MPFS Proposed Rule, CMS provided a list of 65 codes that could potentially be misvalued, and about 25 percent pertain to imaging exams. One example of a coding change that affects radiology is the G-code used for digital mammography.

Under the assumption that imaging as a whole, has made the transition to digital from analog, CMS proposed eliminating the mammography G-codes beginning January 1, 2015. The G-codes were instituted specifically to recognize mammograms completed using digital technology. Because the typical mammogram is now provided using digital technology, CMS proposed that it will revert to the original 7-series code for reimbursement. CMS will reimburse the mammography CPT codes with the RVUs previously established for the G-codes. The change may lead to some turmoil in reimbursements from third-party payers. “The change has caused some concern in the industry. Outside of the Medicare program, commercial payers may not be able to accommodate the change back to the 7-series as quickly. The current reimbursement for mammography using the G-code is significantly higher than the analog code, and it may take several months for commercial insurers to make those adjustments, which could affect revenue for providers. Practices should review their contracts and begin negotiating those changes now,” Purcell explains.

Seeking input on secondary interpretation of images

Sometimes, when a patient is transferred to a trauma center or referred to a physician with advanced specialized training radiologists are asked to interpret exams performed by a separate facility for a variety of reasons. The study may not be current; there may be other health changes the patient has experienced since that exam, or various other factors. Even if the study was current, the physician needs to interpret it as he or she begins the patient’s care, but under the current fee schedule, the physician would not be allowed reimbursement for the read. Depending on the circumstance, the patient may be sent for a repeat study.

In an effort to decrease the number of duplicate studies, CMS expressed interest in knowing whether the uncertainty associated with payment for interpretation of existing images was a driver in repeating those studies. With the publication of the proposed rule for 2015, CMS solicited comments to assess the appropriateness of Medicare paying physicians under the MPFS when they provide subsequent interpretations of existing images.

The ACR and the Radiology Business Management Association (RBMA) as well as other medical associations did provide comments on this issue on behalf of providers. Overall, there was a positive response to the inquiry, demonstrating industry support for the ability to bill and obtain reimbursement for secondary interpretation of images.

“This proposal, while supported in theory, could also spur workflow changes whereby, for example, a study could be read by another provider prior to reaching the radiologist. Part of the discussion and consideration during the comment period takes into account both the benefits of the ability to have that second interpretation, as well as instances where it might cause concern. This is why the comment period is so critical and offers CMS an opportunity to create parameters, if necessary, regarding how the rule would be applied,” Purcell says.

The public comment period for the MPFS recently closed on September 2, 2014, and professional organizations that commented on behalf of their memberships typically post the comments on their websites. The ACR posted its comments, as well as the impact table it created so that radiology groups could begin to estimate the fiscal impacts to their practices next year. The final rule will be published by CMS in November 2014.