Changes to Radiology Reimbursements on the Horizon

overdiagnosis

What Providers Need to Know

In November 2016, the Centers for Medicare & Medicaid Services (CMS) released final 2017 rules for hospital outpatient facilities and provider payments. Contained in these rules were two key provisions that significantly affect radiology reimbursements. One threatens the financial viability of off-campus imaging facilities, while the other requires providers to adopt new IT capabilities.

“Understandably, both of these changes have radiology departments rattled,” says Luann Culbreth, director of radiology and cardiovascular services at HealthTrust.

 Site-Neutral Payments

Effective Jan. 1, 2017, the CMS introduced a site-neutral payment policy for hospital-owned, off-campus facilities located more than 250 yards from the hospital’s campus and acquired on or after Nov. 2, 2015. Facilities that fit these criteria are no longer paid under the Hospital Outpatient Prospective Payment System (HOPPS) rate. Instead, imaging services performed at these facilities fall under the Physician Fee Schedule (PFS) or Ambulatory Surgical Center Payment System, which are typically lower than the HOPPS rate. In some cases, reimbursements are cut by more than 50 percent. (See chart.) According to the Association for Medical Imaging Management (AHRA), this change should reduce Medicare Part B expenditures in 2017 by $330 million.

Exempt from this new policy are off-campus emergency departments and so-called grandfathered facilities, which were operational prior to Nov. 2, 2015. According to Culbreth, some hospitals may have to close these off-campus locations, or they’ll divert their Medicare patients to facilities not affected by the new policy and pull certain services from those off-campus locations.

“Moving forward, imaging leaders must consider the impact of site-neutral payments on their decisions to expand service offerings, relocate facilities or acquire existing facilities,” explain Erin Lane and Pooja Desai in a November 2016 article by The Advisory Board Company.

Clinical Decision Support and Appropriate Use Criteria

Delayed one year from its original start date on Jan. 1, 2017, the clinical decision support (CDS) mandate requires radiology facilities to implement CDS software programs based on appropriate use criteria (AUC) developed by qualified entities.

The CMS has identified the first 11 qualified provider-led entities. These organizations, which include the American College of Cardiology, American College of Radiology and CDI Quality Institute, are responsible for maintaining AUC, which is accessed through a clinical decision support mechanism (CDSM).

“Evidence-based AUC for imaging can assist clinicians in selecting the imaging study that is most likely to improve health outcomes for patients based on their individual clinical presentation,” explains the CMS in the final rule. “The ideal AUC is an evidence-based guide that starts with a patient’s specific clinical condition or presentation (symptoms) and assists the clinician in the overall patient workup, treatment and follow-up. Imaging would appear as key nodes within the clinical management decision tree.”

The mandate applies to outpatient advanced imaging modalities such as CT, MRI and PET scans. The ordering physician must use AUC through a CDSM, and the entity that performs the exam must include a variety of related data elements on Medicare imaging claims. “That’s part of the twist to this,” Culbreth says. “If the ordering physician doesn’t use appropriate use criteria, the healthcare organization providing the service incurs financial penalties.”

Certain emergencies are exempt from the mandate, because the CMS recognizes there can be situations when consulting AUC could delay action and jeopardize the health or safety of the patient. Providers in rural areas may also be exempt by filing a significant hardship exception with the agency.

The CMS is expected to release an approved list of CDSMs this summer, while AUC data elements and claims processing instructions should be finalized in November.

And therein lies the problem. “Nobody’s arguing against appropriate use criteria, which could help avoid unnecessary care and costs,” Culbreth says. “What has most radiology departments concerned is the timeline for compliance. In most hospitals, there’s a 12- to 18-month lead time with IT projects, and many other competing priorities. Radiology departments can’t request to get on the schedule now, provide details in November and expect something to be implemented by January. That’s a completely unrealistic timeline.”

According to a recent AUC/CDS readiness survey by the AHRA, 61 percent of providers have not implemented or begun to implement CDS, and 73 percent indicated it would take their organization six to 18 months to fully implement once the budget was approved.

While the CMS has not released any information on approved suppliers, it has said a CDSM may be “fully integrated with or part of a provider’s certified electronic health record system, partially integrated or entirely outside of it.”

The AHRA AUC/CDS readiness survey found that 30 percent of providers expect the total investment in clinical decision support to be over $100,000.

Culbreth says a CDSM that integrates with an EHR system would be ideal in the long term, but providers may need to consider a more basic solution to comply with the looming CDS mandate.

“Initially, this just impacts Medicare payments, so depending on your payer mix, it may not make sense to put capital dollars toward a project like this right now,” Culbreth says.

Kathryn Keysor, director of economics and health policy for the American College of Radiology (ACR), says ACR Select, the organization’s computer-based imaging decision support system, has submitted an application to the CMS to be one of the qualified CDSMs. It would be an online portal giving providers free access to ACR appropriate use criteria.

XR-29 Penalty Grows

NEMA (National Electrical Manufacturers Association) Standard XR-29-2013 went into effect Jan. 1, 2016, requiring providers to upgrade their CT scanners or face a 5 percent technical component reduction to reimbursement for diagnostic CT procedures performed in physician office and hospital outpatient settings using radiology equipment not in compliance. The reduction increased to 15 percent on Jan. 1, 2017.

An AHRA survey conducted in Q1 2016 found that 59 percent of its member facilities were compliant with XR-29 by the initial deadline; 67 percent expected to be compliant by January of this year.

Culbreth adds that with XR-29, as with AUC/CDS, it may be less financially penalizing for providers to take the lower reimbursement, at least initially.