The Obama administration has released its 2016 budget plan, and with respect to healthcare, it largely features proposals that were included in last year's budget. These include repealing the sustainable growth rate (SGR) formula and eliminating the sequestration order that mandates cuts in payments to Medicare providers.
But there is at least one new provision, which involves lowering payments to services provided in off-campus hospital outpatient departments. These payments would be set at either the applicable physician fee schedule rate or the ambulatory surgical center rate beginning in 2017, for an estimated savings of $29.5 billion through 2025.
And this new provision could be a big problem, according to the American College of Radiology (ACR).
"Of all the issues in the budget, the one that may be most problematic to many physician specialties, including diagnostic radiology, is the 'site-neutral' policy," Cynthia Moran, ACR's executive vice president for government relations, told AuntMinnie.com. "This would peg hospital outpatient payments to the ambulatory surgical center or the office rate, whichever is lowest, and could result in slashed payments for a number of procedures, including echocardiography. It's impact on radiology is less certain, since so many of our [Hospital Outpatient Prospective Payment System (HOPPS)] services are already bundled."
The president is seeking $1.1 trillion for the U.S. Department of Health and Human Services (HHS), but the budget also includes $400 billion of reductions and reforms for Medicare and other HHS programs over the next 10 years. If passed, the budget would go into effect on October 1.
The proposed budget is expected to be dead on arrival, though, in the current Republican-led Congress. Instead, it mostly serves as a vehicle to highlight the president's priorities.
From SGR to sequestration
The budget would "accelerate physician participation in high-quality and efficient healthcare delivery systems" by repealing the SGR formula and "reforming Medicare physician payments in a manner consistent with the reforms included in recent bipartisan, bicameral legislation," according to the document.
The president signed the latest SGR patch into law in April of 2014; this stopgap measure averted a 24% payment reduction for physicians and other practitioners who treat Medicare patients, but it is due to expire on March 31. The president's budget estimates the cost for this repeal to be $44 billion.
The 2016 proposed budget would also do away with the sequestration order mandated by the Budget Control Act of 2011, which requires across-the-board reductions in federal spending and results in an annual automatic 2% cut in Medicare payments to providers through 2021.
Other items in the budget proposal that affect imaging include the following:
Curbing self-referral. The budget proposes that radiation therapy, therapy services, advanced imaging, and anatomic pathology services be excluded from the in-office ancillary services exception to the Stark law, for a savings of $6 billion.
Reducing fraud, waste, and abuse in Medicare. This would be accomplished through several measures, including requiring prior authorization for power mobility devices and advanced imaging, as well as other items and services at high risk of fraud and abuse, for an estimated budget savings of $1.8 billion over 2016 to 2025.
Shifting to alternative payment models. The budget reinforces the president's goal of linking 50% of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models such as accountable care organizations (ACOs) or bundled payment arrangements by the end of 2018.
Imaging advocates, physician groups weigh in
The Access to Medical Imaging Coalition (AMIC) expressed concern that the proposed budget would harm patient access to medical imaging services by implementing a prior authorization system for advanced medical imaging and putting "site-neutral" payments into place for Medicare payments for all services performed in offsite hospital outpatient departments -- including imaging.
"President Obama's budget threatens patient access to care and important imaging services by ignoring the stark differences in patient populations and scope of services provided across sites, and by instituting an unnecessary administrative barrier between patients and their physicians," said Tim Trysla, executive director of AMIC, in a statement. "Leveling payment rates for off-campus hospital outpatient centers down to physician office payment levels would undermine efforts to integrate services across the continuum of care."
In a letter to the White House, the American Medical Group Association (AMGA) expressed its displeasure over the proposed budget's self-referral provisions.
"Prohibiting multispecialty medical groups and integrated health systems from providing imaging services will lead to more fragmented care and would impede the ability of AMGA members to coordinate care," said Donald W. Fisher, PhD, the organization's president and chief executive officer. "We hope the president will reconsider any proposal that restricts patient access to imaging services in multispecialty medical groups."
