CMS finalizes major cut in radiology reimbursement

2016 08 22 10 18 31 293 Money Belt Tighten 400

The U.S. Centers for Medicare and Medicaid Services (CMS) has released the final set of rules that will govern the Medicare payment system for the coming year, thereby affirming the drastic cut in radiology reimbursement for 2021 that was proposed earlier this year.

Sandy Coffta of Healthcare Administrative Partners.Sandy Coffta of Healthcare Administrative Partners.

There were few surprises in the Medicare Physician Fee Schedule (MPFS) final rule that were not contained in the proposed rule, other than a slight improvement in the fee schedule conversion factor and a change to the Quality Payment Program (QPP) performance threshold.

Medicare Fee Schedule payment and valuation changes

Conversion factor

The conversion factor was originally proposed to be cut 10.61% for 2021, to $32.26, but the final figure is $32.41 for a cut of 10.2% from the 2020 rate of $36.09. After all of the proposed valuation adjustments are taken into account, CMS estimates the impact to radiology will be as follows:

Diagnostic Radiology 10% Decrease
Interventional Radiology 8% Decrease
Nuclear Medicine 8% Decrease
Radiation Oncology and Therapy Centers 5% Decrease

Restructuring of Evaluation and Management (E/M) Services

As we reported previously, the biggest factor affecting the decrease in radiology reimbursement is the adoption of a new coding structure for E/M services, with increased valuation of Level 2-5 office visits for established patients. The requirement for budget neutrality within the overall Medicare program means that the increases in E/M payments will cause payment for other services to be reduced.

Under the revised E/M coding structure, physicians may elect to document a visit based either on the time spent with the patient or on the medical decision-making involved in the visit. There will continue to be separate payments for each of the five levels of office or outpatient E/M visits, along with new codes for complex patients and for prolonged visits. The new codes are described as follows:

Code Description
G2211 Add-on Visit complexity inherent to evaluation and management associated with primary medical care services that serve as the continuing focal point for all needed health care services
G2212 Bill separately Prolonged office or other outpatient evaluation and management services (beyond the total time of the primary procedure which has been selected using total time), requiring total time with or without direct patient contact beyond the usual service, on the date of the primary service; each 15 minutes

The American Medical Association (AMA) developed current procedural terminology (CPT) code 99417 to describe prolonged services, but CMS has approved Healthcare Common Procedure Coding System (HCPCS) code G2212 to be used for Medicare patients. Presumably, the description of the usage of 99417 in the 2021 codebooks will apply to G2212 as well.

Impact on high-volume radiology procedures

We conducted an in-depth analysis of the practical effects of the fee schedule restructuring at the time the proposed rule was announced in August, 2020. At that time, we concluded that the decrease in professional component for a typical radiology practice would be approximately as CMS estimated, around 11%-12%. With the revised conversion factor, the estimate using our data shows most procedures will be cut in the 10%-11% range, although CT Thorax reimbursement will be cut 17%.

Our estimate of global reimbursement for imaging centers was more optimistic, and our revised analysis shows the cut to diagnostic exams in the 1%-3% range, dual-energy x-ray absorptiometry (DEXA) 8%, MRI 8%, nuclear medicine 3%-6%, and ultrasound 4%-6%. However, mammography will be cut 10%-11%, and the high-volume CT Thorax exam will be cut 12%-14%.

Supervision of diagnostic services

Nonphysician practitioners (NPP) will be permitted to supervise the performance of diagnostic tests, within the scope of practice allowed by their state license. NPPs include the following:

  • Nurse practitioners (NP)
  • Physician assistants (PA)
  • Clinical nurse specialists (CNS)
  • Certified nurse midwives (CNM)

The definition of "direct supervision" of tests will be expanded to allow the use of real-time interactive audio and video technology. Both of these rules are already in effect temporarily for 2020 due to the COVID-19 public health emergency.

Revaluation of services

The final rule contains over 40 new or revised codes impacting radiology, according to the American College of Radiology's (ACR) preliminary summary. The ACR notes new codes for low-dose CT for lung cancer screening and medical physics as positive changes.

Quality Payment Program (QPP)

The table below shows the progression of the performance category weights and threshold values for 2021 as compared with 2020:

  2020 2021
Performance Category Weights:
Quality 45% 40%
Cost 15% 20%
Promoting Interoperability 25% 25%
Improvement Activities 15% 15%
Performance Threshold 45 points 60 points
Exceptional Performance 85 points 85 points
Maximum payment adjustment 9% 9%

By law, the Cost and Quality performance categories must become equally weighted at 30% by the 2022 performance period. The Performance Threshold was proposed to be 50%, but CMS finalized it at 60% for 2021.

A new alternative payment model (APM) Performance Pathway will be implemented in 2021 while the introduction of Merit-Based Incentive Payment System (MIPS) Value Pathways originally planned for 2021 will be delayed until 2022.

Quality Performance Category

As noted in the table above, the weight of the Quality category will decrease over time to 30% by 2022. However, since many radiologists do not receive a score in the Cost category, the Cost weight is usually redistributed to Quality; therefore, Quality will continue to represent at least 60% of the score for many radiologists and it could become even more for a hospital-based practice where the Promoting Interoperability value is also redistributed.

Two measures have been removed beginning with the 2021 performance year:

  • Measure 146, "Inappropriate use of 'probably benign' assessment category in screening mammograms"
  • Measure 437, "Rate of surgical conversion from lower extremity endovascular revascularization procedure"

Two new Administrative Claims Outcome measures have been added:

  • Hospital-wide, 30-day, all-cause unplanned readmission rate
  • Risk-standardized complication rate following elective primary total hip arthroplasty and/or total knee arthroplasty

The web interface option for data submission was proposed to be eliminated but CMS has retained that option through 2021, indicating that it will finally be eliminated for 2022.

Promoting Interoperability Performance Category

Two changes were made to the Promoting Interoperability (PI) objectives and measures:

  • Addition of an optional Health Information Exchange (HIE) bi-directional exchange measure
  • The "Query of Prescription Drug Monitoring Program (PDMP)" measure becomes an optional measure worth 10 points

Cost Performance Category

Costs associated with telehealth services that are directly applicable to existing episode-based cost measures and the Total Per Capita Cost measure will be included.

Improvement Activities Performance Category

Two activities were modified, and one was removed due to obsolescence. The COVID-19 clinical data reporting activity will be retained for 2021.

Retroactive changes for the 2020 performance year

The complex patient bonus has been doubled for the 2020 performance year, so that eligible clinicians, groups, and APMs would be able to earn up to 10 bonus points to account for the complexity of treating their patient population due to COVID-19.

APM entities will be allowed to submit an application to request reweighting of all MIPS performance categories which, if approved, would give the entity a score equal to the performance threshold even if data is submitted. This rule is different from the policy for individuals, groups, and virtual groups.

Radiology will see a significant cut in Medicare reimbursement in 2021 if the MPFS final rule is applied without a change to the budget neutrality requirement in the law. Pending legislation in the form of HR 8702, the "Holding Providers Harmless from Medicare Cuts During COVID-19 Act," would grant physicians some temporary additional payments for the next two years to make up for these steep decreases.

Other grassroots efforts such as, sponsored by the Radiology Business Management Association (RBMA), are also making an effort to obtain some relief.

Sandy Coffta is the vice president of client services at Healthcare Administrative Partners.

The comments and observations expressed are those of the author and do not necessarily reflect the opinions of

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