Healthcare Reform Deals New Blow with Reimbursement Cuts
While long-term implications remain to be seen, the short-term impact of the sweeping new healthcare reform law on radiology will primarily be felt in the form of the Medicare reimbursement cuts that have long been a bane for the specialty.
 James H. Thrall, M.D. Harvard Medical School |
 Jonathan W. Berlin, M.D., M.B.A. University of the Chicago Pritzker School of Medicine |
 Gary M. Becker, M.D. American Board of Radiology |
"Radiology has been the piñata of Washington for the last five years," said James H. Thrall, M.D., president of the American College of Radiology (ACR), radiologist-in-chief at Massachusetts General Hospital and a professor of radiology at Harvard Medical School, both in Boston. "This began with the 2005 Deficit Reduction Act (DRA) when the Centers for Medicare & Medicaid Services (CMS) departed from well-established principles for setting reimbursement rates. The current legislation is not based on valid data of any kind."
The perception that imaging is overutilized and growing too fast has fueled the reimbursement cuts outlined under the 10-year, $940 billion Patient Protection & Affordable Health Care Act that will likely hit radiology harder than other specialties, Dr. Thrall said.
While acknowledging a number of positives, including insurance coverage of an additional 32 million people, improvement to quality reporting incentives and exclusion of the controversial U.S. Preventive Services Task Force (USPSTF) Mammography Screening Guidelines as a basis for coverage decisions, Dr. Thrall says the 2,000-plus page law also contains considerable drawbacks for radiology.
The legislation includes what Dr. Thrall calls "a toothless provision" for self-referral disclosure and offers no permanent fix for the Medicare Sustainable Growth Rate (SGR)—a method used by CMS to control spending by Medicare on physician services—despite widespread concurrence among medical organizations, including ACR, that the formula is flawed.
The legislation also contains grey areas that hinge on unknown future decisions by Congress and its rulemaking committees, including the newly created Independent Payment Advisory Committee that could dictate how Medicare reimbursement decisions are made—potentially helping or hurting radiology, according to Jonathan W. Berlin, M.D., M.B.A.
"We don't know to what extent this body will legislate Medicare changes," said Dr. Berlin, a clinical associate professor of radiology at the University of the Chicago Pritzker School of Medicine. "Around 70 percent of third-party payers base their fee schedule on Medicare, so the potential impact here is enormous."
Law Could Force Rural Providers Out of Business
Under the law, the utilization rate assumption for medical imaging equipment costing more than $1 million will increase from 62.5 to 75 percent in 2011. The higher the medical assumption rate—the amount of time scanners are presumed to be used during business hours—the lower per scan reimbursement, according to ACR.
In light of a 2009 Radiology Business Management Association (RBMA) study that found the national average utilization rate is 54 percent, Dr. Thrall said the new formula is "flawed" and could drastically affect rural outpatient facilities that averaged only a 48 percent usage rate in the RMBA survey.
The rate change could force many rural, nonhospital providers out of business, create longer commutes and wait times for patients, drive imaging to large, primarily urban hospitals and delay diagnosis and treatment.
"It's disturbing that we've spent the last several decades trying to move medical care delivery to lower-cost outpatient settings for the convenience of the patient and this will drive everything back into hospitals," Dr. Thrall said.
 While radiologists concede the sweeping new healthcare reform law signed by President Barack Obama (shown greeting doctors and nurses in the East Room of the White House in March) contains a number of positives, most believe the legislation will hit radiology harder than other specialties—primarily in the form of Medicare reimbursement cuts. |
SGR Keeps Fiscal Future in Flux
The law's failure to change the SGR formula—which determines the CMS physician payment rate and therefore, Medicare reimbursement—leaves physicians in a constant state of flux.
"All physicians are operating under the constant threat of a possible 21 percent reduction in Medicare the conversion factor, as has been threatened multiple times this year," Dr. Berlin said.
"It demoralizes providers to constantly be on the edge about their fiscal future," Dr. Thrall added.
Although a fundamental restructuring of the formula has long been necessary, a permanent fix—valued at close to $300 billion by ACR—is not likely anytime soon, according to Drs. Berlin and Thrall.
"By not permanently fixing the SGR, Congress has guaranteed a flow of political action committee money into its coffers on a permanent basis from medical organizations trying to influence the SGR," Dr. Thrall said.
Although the law includes a patient disclosure provision that will require self-referring physicians to inform patients in writing that the physician/facility will benefit financially from the imaging procedure and to provide a list of imaging facilities from which the patient may receive their imaging services, Dr. Thrall dismisses the addition as "purely window dressing," saying it will have little or no impact on the longstanding practice.
"Congress blinked again, bowing to special interests," Dr. Thrall added.
"Landmark" MOC Addition Includes Incentive, Penalty
While acknowledging the negatives to the law, RSNA's immediate past-president and Executive Director of the American Board of Radiology (ABR), Gary M. Becker, M.D., points to what he calls a "landmark" addition that stands to benefit patients and physicians: the inclusion of a maintenance of certification (MOC) program incentive.
While incentive payments of 1 percent in 2011 and 0.5 percent from 2012 to 2014 will continue for voluntary participation in Medicare's Physician Quality Reporting Initiative (PQRI), an additional 0.5 percent incentive payment will be made to physicians who participate in a qualified MOC program, including that of the ABR (see sidebar). The law invokes a penalty for physicians who do not successfully participate in PQRI programs. Beginning in 2015 the penalty will be 1.5 percent, increasing to 2 percent in following years.
"Given that one major goal of the specialty board movement is to maintain for at least a portion of the profession the self-regulation it has enjoyed for more than three-fourths of a century, the appearance of MOC in the new federal legislation is a landmark occurrence," Dr. Becker said. "Increasing physician accountability and performance assessment and improvement are certainties in our evolving health system. With that perspective, the MOC PQRI provision is tangible evidence that specialty boards will be part of the federal accountability framework in healthcare. Thus, the provision is pivotal to the future of the board movement and the profession itself."
Patients long dissatisfied with the healthcare system overall will also benefit from the MOC provision. "Ultimately, we will know the public has benefitted when MOC participation translated into 'a Good Housekeeping seal of approval,'" Dr. Becker said.
Long-term Impact Unknown
Overall, Dr. Berlin believes radiology and other specialties were hit hardest by the bill that favored primary care overall, but long-term there is no way of knowing how the massive piece of legislation will impact any area of healthcare. "There are many, many unknowns that will be played out over a number of years," Dr. Berlin said.
Nevertheless, radiologists appear to be wary of what lies ahead, at least in terms of income. More than half (52 percent) of 200 radiologists responding to a recent salary survey conducted by physician recruiting firm LocumTenens.com, said universal healthcare would negatively affect their personal incomes.
Radiology—and all of healthcare—should brace for what Dr. Thrall calls "unintended consequences," somewhere down the road.
"You don't experience unintended consequences immediately … they develop over time, after it's too late," Dr. Thrall said. "Two examples are the SGR and Medicare Growth rate. Congress has still not found the will or the way to fix either of those."