MedPAC Recommends New Imaging Payment System

The Medicare Payment Advisory Commission (MedPAC) considers several health care matters in its June 2011 Report to the Congress: “Medicare and the Healthcare Delivery System,” but what is making the most waves among the industry are the recommendations pertaining to ancillary services. A new payment system is in order, MedPAC says in the report; one that would reward physicians and hospitals for limiting the number of imaging services they provide. Prior notification and prior authorization also would “ensure the appropriate use of advanced imaging studies,” MedPAC says.

In its annual report to Congress, MedPAC makes these specific recommendations for improving payment accuracy and appropriate use of ancillary services:

  • Accelerate and expand efforts to package discrete services in the physician fee schedule into larger units for payment.
  • Apply a multiple procedure payment reduction to the professional component of diagnostic imaging services provided by the same practitioner in the same session.
  • Reduce the physician work component of imaging and other diagnostic tests that are ordered and performed by the same practitioner.
  • Establish a prior authorization program for practitioners who order substantially more advanced diagnostic imaging services than their peers.

Upon learning of these recommendations, then president of the American Medical Association (AMA), Cecil B. Wilson, MD, said, “The American Medical Association shares MedPAC’s interest in accurate reimbursements, but … adding new cuts and administrative burdens to the Medicare system is the wrong approach and will compromise care for patients while increasing costs.”

Also in its June 2011 report, MedPAC considers alternatives to the Sustainable Growth Rate (SGR) mechanism and makes recommendations for a fundamental change to Medicare’s technical assistance to health care providers for quality improvement (suggesting financial assistance go directly to providers rather than state agencies). Additional chapters examine aspects of the broader health care system, such as dual eligibles and federally qualified health centers.

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