MedPAC proposes imaging payment cuts in June report

By Kate Madden Yee, staff writer

June 15, 2018 -- The Medicare Payment Advisory Commission (MedPAC) has proposed reimbursement cuts to specialties -- including radiology -- of almost 4%, while increasing payments for services such as clinician and hospital outpatient visits by 10%.

The recommendation in MedPAC's June report to Congress is prompted by the commission's concern that certain health services such as imaging exams, procedures, and tests are overvalued when compared with patient evaluation and management services, according to MedPAC Executive Director Jim Mathews, PhD.

"We feel that although the effort to identify and correct misvalued services has made incremental improvements to physician payment accuracy in the fee schedule, these improvements have been largely overshadowed by what we call 'passive devaluation' of evaluation and management services," he said in a telephone press conference held on June 15.

To remedy the situation, MedPAC suggested that Congress implement a one-time adjustment to the Medicare Physician Fee Schedule, increasing evaluation and management payment rates by 10% and reducing payment rates for other services by 3.8%. This scenario would boost payments for evaluation and management services by $2.4 billion, with endocrinology, rheumatology, and family practice seeing the highest proportional increases, while diagnostic radiology, pathology, and physical and occupational therapy would experience payment cuts, according to the report.

But these cuts would have to be combined with a longer-range effort, the commission noted.

"Even if this approach is adopted, we urge [the U.S. Centers for Medicare and Medicaid Services (CMS)] to accelerate its efforts to improve the accuracy of the fee schedule by developing a better mechanism to identify overpriced services and adjust their payment rates," the report authors wrote. "If successful, these efforts would improve the accuracy of prices for ambulatory evaluation and management and other services going forward and could reduce the need for further significant adjustments."

Low-value care

The report also tackled the problem of "low-value care," which it sees as prevalent across fee-for-service Medicare, Medicaid, and commercial insurance plans. The commission referenced a 2014 analysis of what it considers to be 31 low-value claims-based measures, evaluated broadly (more sensitive, less specific) and narrowly (less sensitive, more specific); the list included a number of imaging exams.

In that 2014 analysis, the researchers made a trade-off between sensitivity, which captures more inappropriate use, and specificity, which results in less misclassification of appropriate use as inappropriate. To account for this variability, they developed two versions of each measure, one with higher sensitivity (lower specificity) and the other with higher specificity (lower sensitivity), and reported results for both. Two spending levels were then calculated for each test, one based on higher sensitivity and one on higher specificity.

Examples of low-value imaging services provided in 2014
Measure Broader measures (higher sensitivity) Narrower measures (higher specificity)
Count per 100 Medicare beneficiaries Spending Count per 100 Medicare beneficiaries Spending
Imaging for nonspecific low back pain 12 $232 million 3.4 $66 million
Preoperative chest radiography 4.6 $67 million 1.1 $17 million
Head imaging for headache 3.6 $242 million 2.4 $160 million
Head imaging for syncope 1.2 $78 million 0.8 $51 million
CT for rhinosinusitis 0.6 $39 million 0.2 $17 million

After grouping the 31 measures into six larger clinical categories, the low-value care analysis showed that imaging and cancer screening measures in 2014 accounted for 44 of these services per 100 beneficiaries using the measures' broader versions, or 60% of the total number of low-value services. As for the narrower versions of the measures, imaging and diagnostic and preventive testing accounted for 21 low-value services per 100 beneficiaries, or 61% of the total number, MedPAC said.

In its low-value services analysis, the commission particularly called out proton-beam therapy, which was initially used for pediatric and rare adult cancers but is now also used for more common cancers such as prostate and lung.

"There is a lack of evidence that [proton-beam therapy] offers a clinical advantage over alternative treatments for [prostate and lung] cancer," the report authors wrote.

The commission suggested six ways Medicare could address the problem of low-value care:

  • Expand prior authorization.
  • Implement clinical decision support and provider education.
  • Increase cost-sharing for low-value services to reduce their use.
  • Establish new payment models such as accountable care organizations that create incentives for reducing the use of low-value services.
  • Evaluate coverage determinations on an ongoing basis.
  • Link information on cost and clinical effectiveness of healthcare services to fee-for-service coverage and payment policies.

Quality assessment

MedPAC also addressed what it sees as a need to change the way healthcare quality is measured, urging CMS to adopt smaller, population-based measures such as outcomes, patient experience, and value of service to assess quality of care.

"Current quality measurements are too process-based, and they don't necessarily accurately evaluate the quality of care," Mathews said. "Instead, Medicare should use a small set of outcomes-based and patient experience measures that should be scored against absolute targets rather than a 'tournament' model in which providers are scored relative to each other."

Copyright © 2018

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