Since the Deficit Reduction Act of 2005, “Medicare has been dropping reimbursement for mostly the technical component and to a lesser extent the professional component of advanced imaging,” said David C. Levin, M.D., professor and chairman emeritus of the radiology department at Thomas Jefferson University Hospital, in an interview for the Radiological Society of North America. “As they drop reimbursements, we’re seeing private offices begin to close, so the work is shifting to hospitals.” Since being deployed in 2007, the Deficit Reduction Act has cut imaging reimbursement significantly, with the goal of $8 billion over 10 years.
Additional legislation, found in the American Taxpayer Relief Act of 2012, further refined the reimbursement rate by factoring usage rates for equipment costing more than $1 million dollars, namely CT and MRI machines. The legislation states that frequent use spreads out operating costs, so the more the equipment is used, the less money the facility will receive.
Impact on Patients
For smaller practices, the substantially reduced reimbursements barely cover operating costs, forcing practices to close their doors. As private offices are no longer available, it drives more and more patients to hospitals for advanced imaging, especially in rural areas where there are not a lot of options. This is actually driving the cost of imaging up since hospitals are paid more for patient services.
Practices that are able to continue operating may struggle still with building the funds necessary to upgrade their equipment. Additionally, many patients are putting off necessary tests because they are not affordable under their insurance policies.
All these cuts are very disturbing not just for radiologists. In a release, Access to Medical Imaging Coalition’s (“AMIC”) executive director Tim Trysla sums up the problem perfectly: “By putting in place yet another payment cut for imaging, Congress has further reduced patient access to vital early diagnosis that we know saves lives. Unfortunately rather than basing payment decisions on up-to-date data, which show imaging use on the decline, Congress is blindly slashing Medicare payments for diagnostics without true knowledge about how their previous cuts affect seniors’ access to early diagnosis service.”