January 2006 | Vol. 24, No. 1

Deficit Reduction Bill Contains Reimbursement Provisions that are Disastrous to the Vascular Ultrasound Profession

As you are no doubt aware, the House of Representatives and the Senate recently passed separate versions of the Deficit Reduction Act that includes provisions that will have a potentially devastating blow to reimbursements for non-invasive vascular testing. It is expected that in late January one version of the bill will be passed by both the House and Senate. The proposed cuts for non-invasive vascular studies would range between 8% and 51% depending upon the procedure. While all medical “imaging” is being affected by the legislation, unfortunately it appears that vascular ultrasound services will be disproportionately affected. The offending language in the Bill follows:

SEC. 5102, ADJUSTMENTS IN PAYMENT FOR IMAGING SERVICES.
(b) REDUCTION IN PHYSICIAN FEE SCHEDULE TO OPD PAYMENT AMOUNT FOR IMAGING SERVICES.--Section 1848 of such Act (42 U. S.C. 1395w-4) is amended
(1) in subsection (b), by adding at the end the following new paragraph:
"(4) SPECIAL RULE FOR IMAGING SERVICES.-
"(A) IN GENERAL.--In the case of imaging services described in subparagraph (B) furnished on or after January 1, 2007, if-
"(i) the technical component (including the technical component portion of a global fee) of the service established for a year under the fee schedule described in paragraph (1) without application of the geographic adjustment factor described in paragraph (l)(C), exceeds
"(ii) the medicare OPD fee schedule amount established under the prospective payment system for hospital outpatient department services under paragraph (D) of section 1833(t) for such service for such year, determined without regard to geographic adjustment under paragraph
(2)(D) of such section, the Secretary shall substitute the amount described in clause (ii), adjusted by the geographic adjustment factor described in paragraph (l)(C), for the fee schedule amount for such technical component for such year.
"(B) IMAGING SERVICES DESCRIBED.--For purposes of subparagraph (A), imaging services described in this subparagraph are imaging and computer-assisted imaging services, including X-ray, ultrasound (including echocardiography), nuclear medicine (including positron emission tomography), magnetic resonance imaging, computed tomography, and fluoroscopy, but excluding diagnostic and screening mammography."; and
(2) in subsection (c)(2)(B)(v), as added by subsection (a)(3), by adding at the end of the following new
subclause:
"(II) OPD PAYMENT CAP FOR IMAGING SERVICES.-Effective for fee schedules beginning with 2007, reduced expenditures attributable to subsection (b)(4).".

Basically, this new legislation reduces reimbursement for the Physician Fee Schedule (PFS) to the lesser of the PFS and the Hospital Outpatient Prospective Payment System (HOPPS) Ambulatory Patient Classification (APC's) for all imaging procedures. The HOPPS APC system defines the amounts paid to hospitals when providing services to Medicare outpatients —a highly criticized cost-based system that 'lumps' similar procedures together, paying the same amount under a single APC (e.g., 93880 & 93882 are paid the same amount even though 93880 is a complete bilateral procedure and 93882 is unilateral or limited). In contrast, payments under the PFS are amounts paid to offices-based practices, IDTFs, etc. when providing services and is a resource-based system where amounts are different for each CPT code. These numbers are based on more than a decade of work detailing practice expense, malpractice and physician work (part of the malpractice and all of the physician work Relative Value Units are not part of the Technical Component) Unfortunately, the APC reimbursements for vascular testing in particular are poorly representative of what it actually costs to provide the service, and in fact were not derived from that level of detail, unlike the PFS.

Numerous questions still exist with regard to the impact of this legislation. For example, what in the HOPD payment system correlates with a PFS "allowed amount". Given the HOPD payment system includes a “national unadjusted co-payment amount” that exceeds the 20% co-payment in the allowed amount, will the PFS be altered to require/allow collection of this greater co-payment from the beneficiaries, or will Carriers pay greater amounts than Fiscal Intermediaries. Given the Geographic Practice Cost Indices (GPCIs) under the PFS do not correspond to the Geographic Adjustments under the HOPD, questions remain as to how this will be resolved? It does appear the physiologic testing (i.e., 93875, 93922, 93923, 93924, & 93965) will not be included but that remains questionable.

Fortunately, we have until January 1, 2007, the implementation date of the legislation, to determine the answers to our many questions and attempt a fix with either Congress or CMS. We have been working with our regulatory and legislative counsel, Bill Sarraille, and numerous other societies to determine the best course of action to attempt to correct this monumental problem for the vascular ultrasound profession.

SVU will keep you apprised of developments as they occur and our response strategy as it unfolds. We ask that you please stand ready to write letters to your Members of Congress if asked to do so, fill out surveys on vascular studies as we need them, and make additional voluntary contributions to the Government Relations Fund as the battle in 2006 to fix this legislation is going to be very costly. The continued existence of your profession literally depends upon your support in all three areas. Thank you!

Bill Schroedter
Chair, Government Relations Committee