CMS pitches 90% use rate in proposed 2010 MPFS rule

Jun 30, 2009

In a move sure to strike fear in the hearts of imaging advocates, the U.S. Centers for Medicare and Medicaid Services (CMS) on July 1 laid out a 90% equipment utilization rate in its proposed rule for the 2010 Medicare Physician Fee Schedule (MPFS).

That would be significantly higher than the current percentage of 50%. But the rate should be changed because actual use of imaging equipment is higher, CMS said, citing a March 2009 report from the Medicare Payment Advisory Commission (MedPAC).

"We believe the studies cited by MedPAC suggest what we have long suspected, that physicians and suppliers would not typically make huge capital investments in equipment that would only be utilized 50% of the time," the proposed rule states. "All of the equipment cited in the MedPAC studies is priced over $1 million. Therefore, we are proposing to change the equipment usage assumption from the current 50% usage rate to a 90% usage rate for equipment priced over $1 million."

A shift to a 90% utilization rate will have serious negative effects on radiology if finalized, according to Pam Kassing, senior director of health economics and policy at the American College of Radiology (ACR) in Reston, VA. The ACR has criticized the MedPAC data, pointing out that it came from only six imaging centers in six different regions of the country.

"This percentage change will have a huge impact on the technical component for higher modalities of imaging such as CT, MR, PET, and possibly [intensity-modulated radiation therapy]," Kassing said. "We're disappointed CMS plans to move forward with the 90% use rate based on MedPAC data, with no new data to support the decision."

There are unnecessary imaging tests ordered and billed to Medicare, but the way to correct this is not with the equivalent of a meat axe, according to Tom Greeson, a partner at Reed Smith of Falls Church, VA, who specializes in radiology-related regulatory matters.

"What's frustrating about CMS' proposal is that it's the easy way out," Greeson said. "MedPAC made the recommendation, and everyone seized on it without trying to find a more credible approach to curtailing overuse, like appropriateness guidelines."

Also in the document is a proposal to stop making payments for consultation codes, which are typically billed by specialists and are paid at a higher rate than equivalent evaluation and management (E/M) services. Practitioners will use existing E/M service codes when providing these services instead, according to CMS.

Congress to the rescue?

As directed by the Obama administration, Congress is working now on healthcare reform, and if it mandates a different equipment use rate from the one CMS is proposing, CMS will most likely follow suit, according to Greeson.

"If Congress adopts something different from this, CMS won't put this percentage change into place," Greeson said. "It will follow Congress' lead, and we should see both houses act in July."

A bill in the House of Representatives has proposed a 75% utilization rate; the Obama administration has proposed a 95% rate.

Whether Congress comes through with a more moderate equipment utilization percentage, imaging advocates don't have much time to weigh in on CMS' proposed MPFS rule: The agency's comment deadline is August 31; the final rule will be released in November.

ACR lobbies against RBMs, utilization rate changes, June 26, 2009

Siemens' Miller defends imaging in House testimony, June 26, 2009

U.S. House bill would increase utilization factor to 75%, June 23, 2009

RBMA: Equipment use rates far lower than President estimates, June 19, 2009