Reimbursement & Patient Access

Medicare reimbursement to physicians for advanced medical imaging (CT, MR, PET and nuclear medicine) has declined significantly in recent years.

The passage of the health care reform law, the Patient Protection and Affordable Care Act (PPACA), again reduced reimbursements for advanced imaging by mandating an equipment utilization rate of 75 percent beginning in 2011 and increasing the multiple procedural reductions up to 50 percent from 25 percent.

In addition, through regulatory action, Centers for Medicare and Medicaid Services (CMS) implemented additional reimbursement changes using the Physician Payment Information Survey (PPIS) data, resulting in further reimbursements cuts – as much as an additional 30-40 percent – for advanced modalities by 2013.

These reductions in reimbursements come on top of cuts mandated by the Deficit Reduction Act (DRA). In 2007 alone, a Government Accountability Office (GAO) report concluded that Medicare cut $1.7 billion from medical imaging, the first year the Deficit Reduction Act (DRA) cuts were implemented. A Moran Company analysis shows that from 2006 to 2007, post-DRA, reimbursements for advanced imaging (CT, MR, Nuclear Medicine and PET) fell by 19.2 percent.   

The utilization rate is a key component to the formula Medicare uses to determine reimbursement levels for advanced imaging procedures.  The rate is the assumption of the number of hours an imaging center is operating imaging equipment during a week.  The higher the utilization assumption (75 percent vs. 50 percent), the deeper the reimbursement cut.

To determine actual utilization rates, in 2009 the Radiology Business Management Association (RBMA) conducted an imaging equipment utilization rate survey and found usage rates much closer to Medicare’s previous assumption of 50 percent and much lower rates for advanced imaging (e.g., CT, MR) than the 90 percent recommendation put forth by some policymakers.

RBMA found that imaging equipment in rural regions of the country operates only 48 percent of the time an office is open, while equipment in non-rural areas operates 56 percent of the time a center is open for business.  RBMA data, consisted of 261 imaging machines in 46 centers, showed and used current Medicare assumption.