March 2007 | Vol. 25, No. 3

Congress and AMIC Renew Battle to Halt DRA-05 Imaging Payment Cuts

Key Members of Congress and the Access to Medical Imaging Coalition (AMIC) , of which SVU is a member, are turning up the heat in their battle to delay deep payment cuts in medical imaging services for Medicare patients, which went into effect on January 1, 2007.

Representative Carolyn McCarthy (D-NY), joined by Rep. Joseph Pitts (R-PA) and Rep. Gene Green (D-TX),  announced on Feb. 28th that new legislation is being introduced in Congress to delay further implementation of the DRA cuts for two years. In addition, AMIC also released a study by The Moran Company which shows that—as a result of the Deficit Reduction Act of 2005 (DRA)—total reimbursement for imaging services in physician offices and imaging centers will fall some 18-19 percent below total reimbursement for similar services provided in hospital outpatient departments.

“We believe it is imperative to ratchet-up the pressure on delaying the DRA imaging cuts, “ said AMIC Executive Director Tim Trysla. “The Moran report is further proof that these cuts are deeper and more lasting than Congress ever imagined. That’s why we are very encouraged that Representatives McCarthy, Pitts, and Green and many of their House colleagues are sponsoring new legislation that would stop further implementation of the cuts while the GAO can assess the real-world effect on patients.”

House legislation imposes delay and requires GAO study

“The Access to Medicare Imaging Act of 2007,” (H.R. 1293) sponsored by Representative Carolyn McCarthy, along with Representative Joseph Pitts and Gene Green, would direct Medicare to halt further implementation of the DRA imaging payment reductions for two years. During that time, the Government Accountability Office (GAO) would be directed to evaluate the impact of the DRA payment reductions on patient access and service issues, with special attention to seniors living in rural and medically underserved areas.  Joining as original co-sponsors of the legislation were 35 other Members of the House of Representatives.

“Congress must put a halt to further payment cuts in medical imaging services for Medicare patients until GAO can sort through just how this will affect Medicare patients’ access to these life-saving services,” said Rep. McCarthy. “Medical imaging is a standard of care for medical conditions that plague Medicare beneficiaries, such as stroke, cancer, and heart disease. Our legislation recognizes the importance of imaging services and puts the brakes on these cuts while the Federal government studies the real impact of this poorly conceived policy.”

AMIC Executive Director Tim Trysla praised the legislation and welcomed the strong support from Congress.  “We are very pleased with the continued strong leadership on this issue from Representatives McCarthy, Pitts, and Green, as well as other original cosponsors of this legislation. We look forward to building on this support in our continued push to put the DRA cuts on hold while Congress can sort through what it all means for beneficiaries,” said Trysla. “The fact is the DRA has decimated the imaging payments received by cardiologists, radiologists, and other providers. As Congress is considering further cuts in imaging, this bill forces them to stop and evaluate the impact of the existing cuts in order to truly understand them and the value of imaging.” He also said that similar legislation is expected to be introduced soon in the Senate

Moran study finds that DRA drives down imaging spending in physician offices well below hospital outpatient level

The report by the Moran company—also released on 2/28/07 by the AMIC—finds that the cuts in Medicare imaging payments under the Deficit Reduction Act of 2005 (DRA) will mean that total Medicare reimbursement for imaging services in physician offices and imaging centers will fall an estimated 18-19 percent below total reimbursement for similar services in hospital outpatient departments. This is in sharp contrast to pre-DRA reimbursement levels which were roughly the same in both Medicare systems, once differences in system structure were adjusted for, according to the study.
                                                                                                                        
“The Moran report shatters the pre-DRA myth that total imaging payments for physician offices and imaging centers were wildly out of line with imaging payments in hospital outpatient departments,” said Trysla. “The reality is that the DRA itself has created a massive imbalance and inequity. And the result is that patients who receive imaging in physician offices and imaging centers are now facing the very real likelihood of reduced access for these services. Discriminating against Medicare patients on the basis of where they go to get treatment is unacceptable.”

The report calculates the differences in the two payment systems by factoring-in a constant volume of utilization of procedures in both systems using 2005 data, including procedures in the office setting that are affected by DRA-05. It also adjusts for differences in how the two payment systems are structured and reimbursed, and it incorporates Medicare rate and policy changes for 2007. When these elements are considered,  the estimated reduction in the total payment for imaging services in physician offices and imaging centers in 2007 will be approximately $1 billion deeper than prior to the DRA—roughly twice the amount estimated by the Congressional Budget Office when law was passed.

The Moran report also found that a large majority of imaging procedures affected by the DRA will be paid below the estimated costs of performing the service:

• In 2007, 155 out of the 174 (89%) procedures that are capped by the DRA and for which complete data are available will be paid at rates less than the estimated cost of performing the service.
• In 2010, 204 out of the 206 (99%) procedures that will be capped by the DRA and for which complete data are available will be paid at rates less than the estimated cost of performing the service.

“Everyone knows that Medicare has always paid below the true costs of providing many medical procedures, but this report reinforces the fact that the DRA is only making that worse,” said Trysla.  “This is further evidence of the need to pass legislation to delay further implementation of the cuts.”

Appendix B of the Moran Report (which is available at www.imagingaccess.org) provides a detailed spreadsheet of the estimated costs of imaging procedures, for which complete data are available, in comparison to post-DRA funding levels, both for 2007 and 2010. In addition, Appendix C of the report provides a detailed calculation of the procedure  level payment cuts for each imaging service affected by the DRA-05 and included in the analysis, based upon 2007 Medicare rates and policy changes. The report is an update of a similar analysis done by The Moran Company in September 2006 

For a copy of the new report go to www.imagingaccess.org

AMIC represents more than 75,000 patients, physicians, and medical providers throughout the U.S. It also includes health technology firms that manufacture imaging equipment and supplies and that employ tens of thousands of workers.