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CMS issues proposed MPFS rule

Radiology Administrator's Compliance and Reimbursement Insider, October 1, 2005

By Jackie Miller, RHIA, CPC

CMS is proposing drastic changes to radiology reimbursement as part of the 2006 Medicare Physician Fee Schedule (MPFS) proposed rule, which appeared in the August 8 Federal Register. This article will discuss the most important changes in the schedule. Providers will have to wait until the final rule is published this fall to learn whether all the proposals are adopted.

As part of last year's final rule, CMS eliminated the medical necessity requirements for low osmolar contrast material (LOCM) and now pays separately for LOCM regardless of the patient's condition. Under the 2006 proposed rule, CMS would also pay separately for high osmolar contrast material (HOCM). Providers would bill for HOCM using the Q codes published in a recent Medicare transmittal (Change Request 3847, June 30).

CMS currently includes the cost of contrast in the relative value units (RVU) for some imaging services and plans to deduct it in 2006, resulting in a small decrease in payment for certain contrast exams.

In March, the Medicare Payment Advisory Commission (MedPAC), an independent body that advises Congress on Medicare payment issues, recommended that CMS reduce the technical component payment when a practitioner performs multiple exams on adjacent areas of the body. CMS plans to adopt this policy for technical component payment under the Physician Fee Schedule in 2006. (The agency also plans to adopt a similar policy for hospital reimbursement under the outpatient prospective payment system.)

This will not affect payment for the professional component.

The agency has defined 11 "families" of exams. Each family includes exams performed with the same modality (e.g., CT, magnetic resonance [MR], ultrasound) on contiguous body areas. When two exams from the same family are performed, the technical component payment for the lower-paying procedure will be reduced by 50%.

For example, if an imaging center bills for the technical component of a CT of the abdomen (74150) and a CT of the pelvis (72192), the pelvis exam (which has the higher RVUs) will be paid at 100% and the abdomen exam will be paid at 50%.

For globally billed services, only the technical RVUs of the second exam will be reduced. The global payment is equal to the professional RVUs plus the technical RVUs.

CMS intends the new policy to reflect the savings that CMS believes the facility experiences when adjacent areas are imaged using the same modality.

CMS projects a significant savings to the Medicare program from the proposed changes. If the multiple procedure reduction rules had been in place in 2004, there would have been an 18.9% decrease in payments for family 2 procedures (CT and CTA of chest/thorax/abdomen/pelvis).

Under the Stark regulations, physicians may not refer Medicare patients for certain types of services (designated health services, or DHS) to a facility with which the physician or an immediate family member has a financial relationship. Currently, diagnostic and therapeutic nuclear medicine services are not defined as DHS, but this would change in 2006 under the terms of the proposed rule. If adopted, this provision will place the same self-referral restrictions on PET scans and radiation therapy as those that currently exist for CT, MR, and other modalities. CMS believes that this change will help limit the growth of imaging services by removing the incentive to perform services for financial gain rather than medical necessity.

Absent any intervention by Congress, CMS anticipates a 4.3% reduction in the conversion factor for 2006. This reduction, combined with the impact of the other changes outlined above, is projected to result in a 6% decrease in payments to radiology providers in 2006.

Editor's note: RACRI will bring you the terms of the final rule when it is published.

Jackie Miller, RHIA, CPC, senior consultant, Coding Strategies, Inc., 5041 Dallas Hwy., Ste. 606, Powder Springs, GA 30127; 770/445-5566; jackie.miller@codingstrategies.com.

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