From the July 30, 2007, issue of "The Gray Sheet"
A rapidly moving Medicare bill puts imaging payments back in the crosshairs as the House looks for cost-saving measures to fund coverage of uninsured children and prevent massive cuts to physician payments.
H.R. 3162, The Children's Health and Medicare Protection Act, passed the House Ways and Means Committee early July 27. The Energy and Commerce Committee was unable to complete its separate markup of the bill later that day due to Republican stalling tactics and will likely send it to the House floor this week without a committee vote.
The activity is driven by a need to reauthorize the State Children's Health Insurance Program, or SCHIP, before it expires on Sept. 30. But the House legislation, first introduced by Energy and Commerce Chairman John Dingell, D-Mich., on July 24, goes much further.
Imaging Payment Cuts Revisited
"The original house draft ... included a meat ax approach to some of the most valuable medical technologies that are available to patients - imaging technologies," AdvaMed President Steve Ubl told "The Gray Sheet" July 25.
As introduced, the bill would raise estimates of the amount of time that imaging equipment is in use at a medical practice from 50% of office hours to 75%. The change would significantly reduce reimbursement levels for imaging services.
The Medicare Payment Advisory Commission recommended the adjustment in 2006, suggesting CMS is overpaying based on its current estimate.
MedPAC also recommended that CMS consider lowering the capital purchase interest rate that it uses to calculate imaging payments. The bill would not allow the agency to set the rate higher than its current 11% figure and says the rate could be lowered to reflect prevailing market values.
The bill additionally instructs CMS to further reduce payments for multiple imaging procedures performed in one session on contiguous body parts. The technical component for such multiple services was reduced by 25% in 2006. The bill would deepen the cut to 50%.
Device stakeholders had been pleased that CMS left these imaging provisions out of its proposed 2008 physician fee schedule, released earlier this month.
Medical Imaging and Technology Alliance vice president Andrew Whitman said in an interview that the provisions would immediately create billions of dollars in unsupported cuts for imaging services.
AdvaMed's Ubl said industry lobbyists had succeeded in persuading the Energy and Commerce Committee to remove the three troublesome imaging provisions during the lead-up to that committee's markup.
The Ways and Means bill, however, leaves the imaging measures intact.
SGR Reforms Pose Another Threat
Stakeholders are more comfortable with a provision in the bill whereby, starting in 2010, facilities would not receive Medicare imaging payments unless they were accredited by a designated body. In effect, the Mammography Quality Standards Act of 1992 is extended to all diagnostic imaging services.
Ultrasound providers would have until 2012 to comply, and, in the Energy and Commerce version, image-guided procedures would be exempt.
The requirements are designed "to ensure the reliability, clarity, and accuracy of the technical quality of diagnostic images produced," the bill notes. Accreditation standards also include equipment verification and certification of medical personnel.
The bill does not include more severe cost-containment provisions that would require prior authorization by a third party for all imaging services ordered for Medicare patients.
The bill would also provide a "fix" for the scheduled 10% cut to physician payments in 2008 and update payments by 0.5% in 2008 and 2009.
The bill proposes to replace the physician fee schedule's current sustainable growth rate formula with a system of separate updates. Five physician service categories would have payment updates capped at gross domestic product growth. A sixth category, primary care and preventive services, would cap updates at growth in GDP plus 3%.
Because imaging services, one of the update categories, consistently grow faster than the GDP, the proposed system would almost certainly mean more large payment cuts - perhaps as large as 50%, said Joseph Pitts, R-Pa., during the Energy and Commerce markup.
Presidential Veto Threatened
Other cost-saving provisions in the House bill include reducing hospital updates for both the inpatient and outpatient fee schedules by 0.25%.
The bill, as introduced, would also stop payments for home oxygen equipment rentals at 13 months. The Ways and Means version caps rentals at 18 months. Those payments in the past had been unlimited, but the Deficit Reduction Act put in place a 36-month cap in 2006.
The Congressional Budget Office estimates the 13-month cap would save an additional $2.8 billion over five years and $8.2 billion over ten. Oxygen equipment manufacturers and suppliers strongly oppose this provision.
The legislation would additionally create a Center for Comparative Effectiveness Research within the Agency for Healthcare Research and Quality, a concept that has generated significant interest in Washington.
The center would receive funding of $90 million in 2008, $100 million in 2010, and $110 million in 2011, with future funds to be determined.
Other provisions in the House bill generate large savings - $50 billion over five years - by cutting federal spending on Medicare Advantage plans. The other major source of funds would be an increased tax on tobacco products.
The Senate Finance Committee passed an SCHIP bill on July 19 that does not contain the broader Medicare reforms included in the House version. The Senate bill funds the children's program entirely from taxes on tobacco sales.
The bills are meeting strong resistance from many Republicans. President Bush has threatened to veto the Senate SCHIP bill because it significantly expands the program beyond current federal funding of $25 billion over five years, to $60 billion.
The House bill would increase SCHIP funding to $75 billion over five years.
Because the bill is likely the only health care vehicle that will move through Congress this year, AdvaMed hopes to convince members to include provisions to reimburse physicians for remote monitoring of devices and update the clinical lab fee schedule to better incorporate novel diagnostics.
- Chloe Taft
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