Tag: Medicare

Will Congress Stop Medicare Cuts?

Posted on by Brian Casey

Radiologists find themselves once again in a familiar position, facing CMS cuts in Medicare and Medicaid physician payments for 2025. A new analysis by revenue cycle management company Healthcare Administrative Partners details the impact of the reductions, as well as other reimbursement changes set to take effect next year. 

CMS has been driving down radiology reimbursement for years, a trend widely seen as part of the agency’s effort to shift funding from medical specialties to primary care. 

  • That’s having an impact on physician pay, as a study last week found that private-practice diagnostic radiologists have seen inflation-adjusted salaries decline at a -1% annual rate since 2014. 

That trend is set to continue in 2025, with CMS publishing its final rule for the Medicare Physician Fee Schedule that affirms most of the changes it proposed in July. In the new article, HAP’s Sandy Coffta unpacks the changes, which include … 

  • A new conversion factor of $32.3465 (down from $33.2875).
  • Payment reductions of -2.8% for radiology and nuclear medicine, and -4.8% for interventional radiology.

But not all of the changes are negative. Other 2025 policies that affect radiology include …

  • Reimbursement for CT colonography for Medicare beneficiaries at a rate of $108.68 for the professional component.
  • New codes for reporting MRI safety procedures.
  • New quality category measures in the Merit-based Incentive Payment System.

CMS proposed similar cuts last year, but Congress swooped in at the last minute to roll them back with the Consolidated Appropriations Act, which applied a positive 2.93% upward adjustment. 

  • Several bills in Congress now would likewise stave off the 2025 reductions (H.R. 2474 and H.R. 10073), but time is running out to pass them before the current Congressional session expires on January 3, 2025. 

The Takeaway

Will Congress once again ride to the rescue and stave off Medicare reimbursement cuts, as it did a year ago? Or will things be different this time, given the political turbulence that’s shaking Washington, DC? We’ll find out in a few weeks.

Patients Unclear on Imaging Costs

Posted on by Brian Casey

A new study in Health Policy and Technology shows that patients are surprisingly unclear on how much their imaging exams will cost them. Researchers found that few knew their imaging facilities had price estimator tools and even fewer were aware of their out-of-pocket estimates.

The U.S. government has been trying to make healthcare more transparent and understandable for patients through a variety of new rules it’s implemented in recent years, such as “information blocking” rules that prevent providers from withholding patient data.

  • In 2021, CMS required health systems to notify patients of out-of-pocket expenses and make available tools for estimating prices. 

But how knowledgeable are patients about these initiatives? 

  • Researchers from UC Irvine and the University of Michigan surveyed 423 patients scheduled for CT, PET/CT, or MRI scans in Southern California to find out how much they knew about their out-of-pocket costs. 

Researchers discovered that …

  • Only 11% of patients were aware of their out-of-pocket estimates before getting their scans.
  • Only 17% knew their imaging facilities had price estimator tools.
  • 53% said their illness has been a financial hardship, but only 34% were worried about their out-of-pocket costs for imaging.
  • No patient used the hospital’s estimator tool.
  • Patients were less likely to know their out-of-pocket costs if they had lower income (<$50,000), more financial hardship, and no comorbidities. 

The results show that, two years after out-of-pocket transparency rules went into effect, patients are still unclear on their imaging costs. 

  • This is a major problem due to the high variation in imaging prices that’s been documented in other studies, such as 2023 research that found MRI scans ranging in price from $878 to $3,403.

More outreach could help patients better understand costs. 

  • Such outreach could be made through automated calls or even messages through patient portals prior to their exams.

The Takeaway
The new study – when coupled with recent research on patient reports – shows that radiology still has a ways to go when it comes to keeping patients informed about their imaging exams. Getting patients more involved not only will have economic benefits, but could also help patients participate in their own care.

Unpacking 2025 Medicare Changes

Posted on by Brian Casey

Here we go again. CMS has once again proposed cuts in Medicare and Medicaid reimbursement, and the healthcare community is once again rallying to try to stave them off. 

CMS last month released its proposed reimbursement changes for 2025, and there were a few victories for radiology. 

  • CMS finally agreed to pay for CT colonography, and also agreed to unbundle payments for PET radiotracers from the PET scan itself.

But CMS also proposed changes in the Medicare Physician Fee Schedule (MPFS) conversion factor that continue the slow drip of reimbursement reduction for physicians.

  • The agency said the proposal would result in no change for radiology, but a deeper dive reveals that’s not the case. 

For example, the analysts at revenue cycle management firm Healthcare Administrative Partners have reviewed the MPFS changes, calculating that if Congressional adjustments are factored in, the outlook is quite different…

  • Interventional radiology will see a -5.8% reduction in the imaging center global fee and a -1.8% drop in the hospital professional fee, for a combined decline of -4.8%
  • The numbers for radiology and nuclear medicine are -3.8% for imaging centers and -1.8% for hospitals, for combined declines of -2.8%

It may seem like -2.8% isn’t a huge cut, but it continues years of steady declines in Medicare reimbursement (HAP notes that the Medicare physician fee schedule has dropped -10% in the last 10 years).

  • And as anyone in healthcare knows, the costs that healthcare practices face have only gone up over that period.  

There’s always the chance that Congress will come to the rescue, as it did when it passed the Consolidated Appropriations Act of 2024 – indeed, professional medical groups led by the AMA published a letter last week urging lawmakers to reform CMS’ rate-setting system in several ways …

  • Enact an annual payment update tied to inflation
  • Eliminate the requirement that changes in payments be budget-neutral
  • Overhaul the Merit-based Incentive Payment System (MIPS)
  • Make modifications to Alternative Payment Models

The Takeaway

The annual ritual in which CMS proposes sharp cuts in Medicare reimbursement only to have Congress lift them at the last minute is a sort of public policy kabuki dance in which the outcome is practically preordained. Medicare reform is badly needed to end this cycle and put physicians on firmer footing so they can focus on what’s important: caring for patients.

Doctors Work Harder for Less

Posted on by Brian Casey

Medicare reimbursement to physicians per beneficiary has declined over the last 16 years, with radiologists among the biggest losers. That’s according to a new study by the ACR’s Harvey L. Neiman Health Policy Institute, which confirms what many physicians already knew: they are working harder for less money.

It’s no secret that the US government has been struggling to rein in healthcare costs for decades. 

CMS has a number of tools at its disposal for controlling Medicare and Medicaid costs, one of which is the relative value unit (RVU) scale. 

  • RVUs – when multiplied by monetary conversion factors – basically set the amount of money the agency pays physicians per unit of work, with CMS typically reducing the conversion factor when it needs to cut Medicare spending. 

In the new study in the journal Inquiry, Neiman HPI researchers analyzed trends in RVU and conversion factor levels per Medicare beneficiary from 2005 to 2021, analyzing changes to calculate how much work providers have to do to deliver a unit of care. Findings included …

  • Reimbursement per Medicare beneficiary after inflation adjustment fell 2.3% for physicians as a whole
  • Radiology saw one of the biggest declines in MPFS reimbursement per beneficiary, ranking 31st on a list of 39 medical specialties, with a 25% decrease
  • Reimbursement has risen 207% for non-physician practitioners

What’s driving the declines? The Neiman HPI researchers identified the federal government’s budget neutrality rules for Medicare, which stipulate that increases in one area have to be offset by declines elsewhere.

The Takeaway

The new findings confirm what many physicians have suspected – they are not only working harder for less, but non-physician practitioners seem to be getting a bigger piece of the pie. Combined with a recent report showing that radiologist salaries didn’t keep pace with inflation in 2023, it’s not a pretty picture. 

Reimbursement Drives AI Adoption

Posted on by Brian Casey

It’s no secret that insurance reimbursement drives adoption of new medical technology. But a new analysis in NEJM AI shows exactly how reimbursement is affecting the diffusion into clinical practice of perhaps the newest medical technology – artificial intelligence. 

Researchers analyzed a database of over 11B CPT claims from January 2018 to June 2023 to find out how often reimbursement claims are being submitted for the use of the over 500 AI devices that had been approved by the FDA at the time the paper was finalized. 

  • The authors chose to focus on CPT claims rather than claims under the NTAP program for new technologies because CPT codes are used by both public and private payors in inpatient and outpatient settings, while NTAP only applies to Medicare inpatient payments. 

They found 16 medical AI procedures billable under CPT codes; of these, 15 codes were created since 2021 and the median age of a CPT code was about 374 days, indicating the novelty of medical AI.

  • Also, only four of the 16 had more than 1k claims submitted, leading the authors to state “overall utilization of medical AI products is still limited and focused on a few leading procedures,” such as coronary artery disease and diabetic retinopathy.

The top 10 AI products and number of CPT claims submitted are as follows:

  1. HeartFlow Analysis for coronary artery disease (67,306)
  2. LumineticsCore for diabetic retinopathy (15,097)
  3. Cleerly for coronary atherosclerosis (4,459)
  4. Perspectum LiverMultiScan for liver MRI (2,428)
  5. Perspectum CoverScan for multiorgan MRI (591)
  6. Koios DS for breast ultrasound (552)
  7. Anumana for ECG cardiac dysfunction (435)
  8. CADScor for cardiac acoustic waveform recording (331)
  9. Perspectum MRCP for quantitative MR cholangiopancreatography (237)
  10. CompuFlo for epidural infusion (67)

While radiology may rule in terms of the sheer number of FDA-approved AI products (79% in a recent analysis), the list shows that cardiology is king when it comes to paying the bills. 

The Takeaway

Amid the breathless hype around medical AI, the NEJM AI study comes as a bit of a wake-up call, showing how the cold reality of healthcare economics can limit technology diffusion – a finding also indicated in other studies of economic barriers to AI. 

On the positive side, it shows that a rosy future lies ahead for those AI algorithms – like HeartFlow Analysis – that can make the leap.

Economic Barriers to AI

Posted on by Brian Casey

A new article in JACR highlights the economic barriers that are limiting wider adoption of AI in healthcare in the US. The study paints a picture of how the complex nature of Medicare reimbursement puts the country at risk of falling behind other nations in the quest to implement healthcare AI on a national scale. 

The success of any new medical technology in the US has always been linked to whether physicians can get reimbursed for using it. But there are a variety of paths to reimbursement in the Medicare system, each one with its own rules and idiosyncrasies. 

The establishment of the NTAP program was thought to be a milestone in paying for AI for inpatients, for example, but the JACR authors note that NTAP payments are time-limited for no more than three years. A variety of other factors are limiting AI reimbursement, including … 

  • All of the AI payments approved under the NTAP program have expired, and as such no AI algorithm is being reimbursed under NTAP 
  • Budget-neutral requirements in the Medicare Physician Fee Schedule mean that AI reimbursement is often a zero-sum game. Payments made for one service (such as AI) must be offset by reductions for something else 
  • Only one imaging AI algorithm has successfully navigated CMS to achieve Category I reimbursement in the Physician Fee Schedule, starting in 2024 for fractional flow reserve (FFR) analysis

Standing in stark contrast to the Medicare system is the NHS in the UK, where regulators see AI as an invaluable tool to address chronic workforce shortages in radiology and are taking aggressive action to promote its adoption. Not only has NHS announced a £21M fund to fuel AI adoption, but it is mulling the implementation of a national platform to enable AI algorithms to be accessed within standard radiology workflow. 

The Takeaway

The JACR article illustrates how Medicare’s Byzantine reimbursement structure puts barriers in the path of wider AI adoption. Although there have been some reimbursement victories such as NTAP, these have been temporary, and the fact that only one radiology AI algorithm has achieved a Category I CPT code must be a sobering thought to AI proponents.

CMS May Shake Up PET Payments

Posted on by Brian Casey

In a major victory for PET advocates, CMS this week said it was opening a review of its reimbursement policy on PET scans for Alzheimer’s disease. The review could lead to more generous Medicare and Medicaid payments for PET to detect amyloid buildup in the brain, long known as a link to the debilitating – and inevitably fatal – disease. 

Medicare’s current policy on PET for Alzheimer’s has been in place since 2013 and is based on its coverage with evidence (CED) framework; it restricts reimbursement to a single scan per lifetime for patients who must be participating in clinical trials. The CED policy reflects not only CMS’ cautious approach to new technology, but also the fact that for years there have been no effective treatments for Alzheimer’s disease. 

That’s all changed within the last year. A new class of drugs that target amyloid buildup in the brain has begun to receive FDA approval, the most recent being Leqembi from Esai/Biogen in January 2023. And this week, Eli Lilly reported positive results for its amyloid-targeting treatment donanemab (see below), with approval expected by the end of 2023. 

The new drugs have changed the game when it comes to diagnosis and treatment of Alzheimer’s disease: 

  • PET can now be used to identify eligible patients and monitor their treatment
  • Thanks to PET, patients won’t continue to be given expensive drugs after amyloid buildup has been eliminated
  • Expanded PET reimbursement could boost the use of PET diagnostic tracers for identifying amyloid buildup 

CMS is taking comments on its proposal through August 16. If the agency eliminates the CED policy in favor of a national coverage decision, then decisions on PET reimbursement will be made by local Medicare Administrative Contractors (MACs). 

This week’s news could be a Pyrrhic victory if PET reimbursement levels are set too low. One positive sign is that CMS has said it also plans to review its policy that bundles radiotracer payments together with scan payments, which tends to depress reimbursement.

The Takeaway

The nuclear medicine and molecular imaging community has chafed for years under CMS’ restrictive policies on PET for Alzheimer’s disease, with groups like SNMMI lobbying for the change. This week’s news should have wide-ranging benefits not only for the PET business sector, but also for patients who are facing the scourge of Alzheimer’s disease.

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