If you thought the pressure to reduce radiology reimbursement would ease with the arrival of value-based care, think again. The Medicare Payment Advisory Commission (MedPAC) believes that Medicare should continue to emphasize payment increases to primary care, even if it means taking money from specialties such as radiology.
The U.S. Centers for Medicare and Medicaid Services (CMS) needs to make a stronger effort to recalibrate the Medicare Physician Fee Schedule (MPFS) -- in part by reducing payment for "potentially misvalued" services such as diagnostic imaging and outpatient therapy, according to a presentation given at a September 9 MedPAC meeting.
Why? Because MedPAC believes that primary care is still undervalued, and there's a lack of focus on correcting possibly overvalued services, leading to fragmented care, said presenters Ariel Winter and Kevin Hayes, PhD. Both are principal policy analysts for the commission.
"Primary care is labor-intensive, which limits the potential for efficiency gains and volume growth," Winter and Hayes said. "For services other than primary care, efficiency gains are more likely due to advances in technique, technology, and other factors."
Will the new models work?
The context for MedPAC's comments is the Medicare Access and CHIP Reauthorization Act (MACRA), which repealed the sustainable growth rate (SGR) formula and established two new paths for updates to payment rates: advanced alternative payment models (APMs) and the Merit-Based Incentive Payment System (MIPS).
But even with these new models, it's still important to ensure the accuracy of the physician fee schedule, MedPAC said.
"Medicare spent $69 billion for physician and other health professional services in 2014, and its fee schedule lists payment rates for 7,000 codes," said Winter and Hayes. "Paying for 7,000 [current procedural terminology] codes creates opportunities for upcoding and makes it harder for CMS to maintain accurate payment rates."
The solution is to rebalance the fee schedule toward primary care, in part by focusing on controlling the cost of overvalued services by attending more carefully to payment rates based on relative value units (RVUs), according to the commission.
"Under [MACRA's] budget neutrality rule, RVUs should decline for [misvalued services] and go up for other services, including primary care," Winter and Hayes said.
Barriers to cost-cutting
Efforts to do this have already begun and are ongoing. But obstacles remain, according to MedPAC:
- The current coding review process relies on specialty groups that have a financial stake in the outcome.
- The large number of codes makes maintenance of the fee schedule a challenge.
- There is no standing panel of experts to help CMS identify overvalued services.
- There are concerns about the composition of the Relative Value Scale Update Committee (RUC).
- The target for adjustments to misvalued codes in the fee schedule expires in 2018.
- There is a lack of current, objective data to validate RVUs: Work and practice expense values come from specialty society surveys, and practice expense values are often based on outdated prices for equipment and supplies.
- There is no ongoing data collection to support adjusting the fee schedule.
So what does MedPAC suggest? Winter and Hayes listed a number of potential next steps, such as revisiting the following prior recommendations:
- Establishing an expert panel to help CMS identify mispriced services
- Expanding the multiple procedure payment reduction (MPPR) to additional services
- Collecting data from a group of selected practices to establish more accurate payment rates
They also suggested a few new ideas as well, including using a partial capitation approach to pay for primary care and further bundling of current procedural terminology codes.
Zero-sum game?
But how a service is judged needs to be considered carefully, according to Dr. Ezequiel Silva, chair of the American College of Radiology (ACR) Commission on Economics.
"The ACR's position has been that we believe the decisions about how services are valued should include input from the physicians who perform them, not physicians from other specialties or third-parties that aren't clinically based," he told AuntMinnie.com.
Working under a budget-neutral framework is challenging, Silva said. With more than 31 physician specialties at the negotiating table, how can fair decisions about increases or decreases in payment be made?
"Decreases in payment for a service result in increases in other services," he said. "But the impact depends on how many times the service is performed each year. When we decrease payments for, say, an interventional radiology service only performed 30,000 times per year, that doesn't lead to much of an increase in an evaluation and management [E&M] code billed over 100 million times per year. Primary care and E&M services have done quite well, enjoying a 205% in RVUs since the resource-based relative value scale [RBRVS] was established, but not a single radiology service has seen its payments increase to this degree."
Again, doctors who perform the services should be engaged in setting payment levels, he concluded.
"Physicians who are doing the work are the ones who best understand what it costs," Silva said.
