JACR: The calm after the stormMedicare imaging costs plummet

Overall costs of non-invasive diagnostic imaging (NDI) to Medicare Part B have dropped 21 percent from 2006 to 2010, according to a study published in the September issue of the Journal of the American College of Radiology.

According to study authors David C. Levin, MD, and colleagues from Thomas Jefferson University Hospital and Jefferson Medical College in Philadelphia, the study counters misconceptions that imaging plays a primary role in rising medical costs.

“Hopefully, this will assuage the concerns of federal policymakers, and they will decide that no further reimbursement cuts are necessary,” they wrote.

Levin et al’s findings were based on an analysis of Medicare Part B databases from 2000 to 2010. All NDI codes were tracked, with Medicare physician specialty codes used to separate out payments to radiologists, cardiologists, all other nonradiologist physicians as a group and independent diagnostic testing facilities.

Results showed that overall Part B spending for NDI rose from $5.921 billion in 2000 to $11.910 billion in 2006, a 101 percent jump. The Deficit Reduction Act of 2005 resulted in a sharp drop in spending starting in 2007, which was followed by a slight rise in 2008 before falling further to $9.457 billion in 2010.

The breakdown of spending by specialty showed a similar rise and fall for radiologists and non-radiologists alike:

• Radiologists’ NDI payments were $2.939 billion in 2000, peaked at $5.3 billion in 2006, then fell to $4.712 billion in 2010.
• Cardiologists’ NDI payments were $1.327 billion in 2000, peaked at $2.998 billion in 2006, then fell to $1.996 billion in 2010.
• Other physicians’ payments were $1.106 billion in 2000, peaked at $2.378 billion in 2006, then fell to $1.968 billion in 2010.

“Medical imaging costs peaked in 2006, after doctors discovered that they could diagnose, treat or rule out serious conditions more safely and efficiently using scans rather than exploratory surgeries or admitting patients who did not need to be hospitalized,” Levin said in a release.

Aside from the Deficit Reduction Act, the authors pointed to four other developments at the federal level that negatively affected imaging reimbursements to physicians. In 2006, a multiple procedure payment reduction of 25 percent to the technical component was applied to the second and subsequent CT, MRI and ultrasound exams of contiguous body parts within a single session. This was later increased to a 50 percent reduction and expanded to all exams in the same session.

Reimbursement was further reduced when the Centers for Medicare & Medicaid Services revalued the practice expense component of imaging relative value units. This was done on the basis of a physician practice information survey that the American College of Radiology believes was flawed, according to Levin and colleagues.

The last two factors outlined by the authors were the increase of the assumed equipment utilization rate from 50 percent to 75 percent for all diagnostic imaging equipment costing more than $1 million, and the bundling of certain high-volume Current Procedural Terminology codes that were previously claimed separately.

In addition to these reimbursement cuts, Levin noted that providers have become more educated about when and which imaging procedures to order. “This study shows that imaging has matured as it serves an increasingly vital role in modern health care,” said Levin.