The proposed 2015 Medicare Physician Fee Schedule from the Centers for Medicare and Medicaid estimates revenue reduction impacts for all specialties based on changes to the fee schedule. The changes are consistent with those from previous years in that they continue to decrease the radiology revenue stream.
While the overall impact to radiology is estimated at two percent, there are other notable changes proposed that may cause a significant impact in certain areas, including:
- A continued emphasis on misvalued services;
- Adjustments to direct and indirect practice expense estimates; and,
- A potential expansion of payments for the secondary interpretation of images.
Coding changes: Elimination of the mammography G-code
CMS provided a list of 65 codes that may potentially be misvalued, and roughly 25 percent pertain to imaging exams with the publication of the 2015 MPFS Proposed Rule. One example that affects radiology is the G-code change used for digital mammography.
Operating under the assumption that imaging has transitioned 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 relative value units previously established for the G-codes.
The change has caused some concern in the industry and may lead to some turmoil in reimbursements from third-party payers. 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 potentially affect revenue for providers. Practices should review their contracts and begin negotiating those changes now.
A new formula
Even minor adjustments to the basic formula for calculating reimbursement can have an effect on the result. Some of the proposed adjustments are minor, but others including the reduction in the area of technical expenses, are more significant.
Expense inputs — The practice expense input into the RVU has been significantly reduced due to lower costs associated with digital imaging versus analog imaging. This adjustment is based on the recommendation by the Relative Value Update Committee to reflect the film-to-digital migration that is occurring in the radiology specialty. Many common procedures will be affected by this adjustment. For example, the technical 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.
Outpatient imaging center operators have a vested interest in the technical portion of services and the reimbursement of those services. For these reasons, center operators may want to begin estimating the fiscal ramifications of how the new RVU values assigned to technical services will impact their practices.
It is likely that many professionals within the radiology specialty will not fully understand the potential impact of this change. If looking at the impacts as a whole, it would appear to be smaller because it is estimated at only two percent. There is a caveat that deserves special emphasis this year, however. 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.
Geographic Practice Cost Index — 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 is prudent that industry professionals understand the compounding effect that all of the changes to the individual factors in the equation have on the end result. It's also important to point out that any effects we see this year will be further compounded by sequestration.
In any case, groups should begin by doing 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 this year. The American College of Radiology provides a great resource in its table of estimated impacts. Therefore it is recommend that groups start there and apply any changes to their volumes to get the weighted average of those impacts.
Subsequent interpretations
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 may not be reimbursed 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 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.
Prepare and estimate
The public comment period for the MPFS 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 for radiology groups. As the industry awaits the release of the final rule, slotted to be published by CMS in November 2014, the best thing radiologists can do to prepare is to estimate the fiscal impacts to their practices next year.
Harry Purcell is an operations manager with Zotec Partners working from its Clearwater, Fla., office since 2007. He has worked as a senior manager and radiology consultant since 1995. His clients currently staff hospitals and imaging centers in the state of Florida, providing more than 1.5 million procedures annually. Mr. Purcell is the current chair of the Zotec Electronic Health Records Committee and is a member of the company's ACO Focus Group. He was appointed to the RBMA Federal Affairs Committee in 2013. He can be reached at hpurcell@zotecpartners.com.