CMS plans to cut billions from Medicare imaging payments

Reductions could prompt some physicians to forgo imaging investments or focus more on the non-Medicare side of business.

By David Glendinning, AMNews staff. Feb. 27, 2006.

Washington -- The legislation that earlier this month handed doctors a small measure of good news in the form of a Medicare rate freeze also brought with it a dose of bad news for physicians who conduct imaging services under the program.

Starting in 2007, Medicare will cap reimbursements for most kinds of imaging scans by paying the lesser of hospital outpatient or physician fee schedule charges. The change applies to the technical component of the services, not the interpretation of the scans, and excludes mammography.

Some lawmakers and the Centers for Medicare & Medicaid Services said this was a necessary addition to the Deficit Reduction Act of 2005 because of the explosion in utilization of imaging services in recent years. Herb Kuhn, director of CMS' Center for Medicare Management, reported last year that nearly 20% of a major spike in Medicare outpatient spending in 2004 was due to patients receiving more frequent and more complex imaging. In addition to being a waste of money, any medically unnecessary scans in this category could be dangerous to the patients involved, he said.

Radiologists and other physicians conducting the services see the situation a different way. The measure, which also codifies a Bush administration plan to reduce by half the payments for multiple scans on contiguous body parts, will interfere with physicians' ability to offer the types of imaging technologies that their patients increasingly need, they said. The Congressional Budget Office estimates that the government will squeeze roughly $2.8 billion from the sector over five years.