Much has been written about the proposed updates to the Medicare Physician Fee Schedule (MPFS) for 2007.  Diagnostic imaging services are one of the most significant service lines impacted by the proposed Medicare reimbursement updates.  If  the proposed rules are finalized, Medicare reimbursement for the technical portion of diagnostic imaging services would be impacted by the following:

• Continuation of a 25% reduction in payment amounts for the second and subsequent diagnostic imaging procedures belonging to one of nine imaging families where certain MRI, CT, or ultrasound procedures are performed the same day on contiguous body parts.  (This could be considered a win for imaging providers, since the 25% reduction was scheduled to increase to 50% in 2007).
  
  
• 5.1% reduction in the annual MPFS conversion factor (from $37.8975 to $35.9647).
  
  
• Changes in relative value units (RVU) for imaging services and GPCI update factors.
  
  
• New limitations on the technical component of certain imaging services to the lesser of the MPFS or amounts that would be paid for that same imaging service if it was paid at the ambulatory payment classification (APC) rate to a hospital outpatient department.  Imaging services excluded from the payment cap include:
  
  
  • Certain nuclear medical services
  • Mammography services (diagnostic and screening)
  • Radiation oncology services that were not imaging or computer-assisted imaging services
  • Any CPT code that describes a procedure for which fluoroscopy, ultrasound, or another imaging modality is included in the code, whether or not is used or employed peripherally in the performance of the main procedure.

Sample Impact on Proposed Medicare Reimbursement Changes for MRI and CT Services

Computing actual Medicare fee schedule amounts is complex and requires calculating amounts and limits in a sequential manner.  As an example, we calculated the difference between actual 2006 and proposed 2007 Medicare reimbursement using a sample of claims for MRI and CT services from a broad base of primary care and specialty physicians ordering diagnostic imaging services in an outpatient (non-urgent) setting.  Findings indicate:

Given that many insurance contracts provide for reimbursement methods based on Medicare policies, imaging providers will need to carefully review contract language and related reimbursement amounts from other payers to determine the overall potential impact of these proposed Medicare changes.

Should you need assistance assessing the impact these proposed regulations would have on your clinic or imaging center, please call your Wipfli Client Service executive or Jane Jerzak at 920.662.2821.