CMS Finalizes Payment Reductionspayment reduction

In the Final Rule for the 2011 Medicare Physician Fee Schedule, the CMS finalized its proposals for reduced Medicare payments for imaging services discussed in the notice of proposed rule making.

In addition to the payment reductions mandated by the Patient Protection and Affordable Care Act of 2010 (PPACA), the CMS finalized its proposal to extend the multiple procedure payment reduction (MPPR) across noncontiguous body parts, as well as across modalities. Additionally, the agency did not accept the AMA-Specialty Society Relative Value Update Committee's (RUC) recommendations for a number of radiology services. As a result, CT services for the spine and chest were valued at a lower percentage than the RUC's proposal. A complete summary of the Final Rule can be found at

MPPR Expands

The Deficit Reduction Act of 2005 mandated that a 25-percent reduction be applied to the technical component (TC) payment of the second and subsequent examination for contiguous body parts for MRI, CT, and ultrasound beginning in 2007. The PPACA increased the TC discount from 25 to 50 percent on July 1, 2010, yet the revised MPPR legislation didn't cross modalities or include noncontiguous body parts. However, the CMS goes beyond its congressional mandate and applies the MPPR regardless of the specific combinations of imaging services provided to a patient in a single session. The CMS bases its action on the PPACA section instructing the secretary to identify multiple codes that are frequently billed in conjunction with a single service and make appropriate adjustments to their relative values as needed.

The ACR commented extensively that expanding the MPPR in this manner was inconsistent with clinical practice. Despite the College’s efforts, the CMS finalized its policy for widening the scope of the MPPR. Initial estimates are that this may result in an additional 5-percent reduction to TC payments in 2011 and beyond.

CMS Disagrees With RUC Recommendations

The Final Rule is the first notice of whether the CMS agrees or disagrees with the RUC's recommendations for valuation of services. The ACR's RUC physician volunteers and staff spend an incredible amount of time and effort to put radiology's best foot forward in the valuation process. Although the RUC doesn't always accept the College's suggestions, we endorse the process as the best means to obtain physician input for the valuation of medical services.

CMS and RUC mandates for revaluation of existing services created a heavy workload for the ACR in 2010. While AMA staff had no new CPT® codes to present at the RUC, we developed numerous recommendations for services that were revised due to the CPT-RUC bundling initiative. The RUC was also tasked with re-evaluating many other services identified by the CMS and the RUC as potentially misvalued. As expected, the RUC recommended reduced payments for the newly bundled CT abdomen and pelvis codes and the comprehensive lower extremity revascularization codes.

However, for other services identified as potentially misvalued — CT spine, thorax, extremity, and extremity radiographs — the RUC accepted the ACR's recommendations to maintain existing values. Incredibly, the CMS disagreed with the RUC recommendations for the CT services and reduced their relative values from 8 to 14 percent.

In the past, the CMS has accepted more than 95 percent of RUC suggestions, so we were surprised by their actions, especially since the recommendations were to maintain existing values rather than increase them. The CMS believes changes in medical practice have made providing CT services more efficient and that the RUC valuation process may be inaccurate. Overall, the CMS didn't accept 15 percent of all RUC recommendations for 2011.

The agency's scrutiny of the RUC's recommendations comes at a time when the committee itself faces criticism from primary-care physicians and outside agencies. The Medicare Payment Advisory Commission and the American Academy of Family Physicians are on record as stating that the RUC process systemically undervalues the work of primary care and that more oversight is needed. Similar criticism also surfaced in the Wall Street Journal.

It seems that the CMS has listened to these woes, as its actions for physician payments in 2011 reflect a redistribution of physician payments from specialists to other physician services. The values for 2011 are interim for one year, and the ACR RUC volunteers will ask the CMS to reconsider the values for CT services for 2012 through the 2011 refinement panel process.

bibb allen jrBy Bibb Allen Jr., M.D., FACR

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