Consolidated Appropriations Act of 2016-Digital X Rays Or A Cut In Reimbursement

On December 18, 2015, Congress enacted H.R. 2029, the Consolidated Appropriations Act of 2016 which included a provision for diagnostic radiology.  Buried in H.R. 2029 was a new rule which was meant to incentivize facilities using Analog (film) Radiography and Computed Radiography (CR) to make the switch to Digital Equipment (DR).

What the Act specifically states

Medicare reimbursements of the technical component under the Physician Fee Schedule and the Hospital Outpatient Prospective Payment System will be reduced according to the following schedule for radio logic exams conducted using film or CR.  It should be noted that the reductions are not compounded year over year.  The law states “CR” is defined as cassette-based imaging which utilizes an imaging plate to capture the image.”

Calendar Year Film Reduction* CR Reduction*
2017 20%
2018 20% 7%
2019 20% 7%
2020 20% 7%
2021 20% 7%
2022 20% 7%
2023 & Beyond 20% 10%

*Reduction from the then current CMS reimbursement rate

How will this affect my reimbursement

A sizable chunk of the X-ray community could feel the effect of these reimbursement cuts. While only about 1% of providers currently use film, approximately 59% still utilize CR systems, with the remaining 40% operating DR units.  According to Guillermo Sander, the Senior Strategic Marketing Manager at Konica Minolta Medical Imaging, and a member of the CR/DR group at Medical Imaging & Technology Alliance (MITA), “The Consolidated Appropriations Act of 2016 applies to Medicare Part B, specifically outpatient radiology services delivered in hospital outpatient departments, free-standing imaging centers and physician offices”.

Guillermo explains “The law actually has two parts, in addition to the reduction in reimbursement for the technical component, it also increases the payment for the professional component of multiple imaging services by changing the Multiple Procedure Payment Reduction (MPPR) from 25% to 5%.  “So the law really takes money from the technical side and moves it back to the professional component.”

By making these significant changes, The Federal Government stands to save $350 million over the next 10 years.  So whats in in it for the private practice who may have to invest upwards of $30,000 to make the switch to DR equipment?   It is assumed that there will be many advantages to DR conversions, including improved workflow, gains in efficiency and lower radiation doses.  What we know for certain, is that the evolution of healthcare delivery will continue.  However, with a potentially new “philosophy” on the state of healthcare taking shape in Washington, this may be subject to change.  Prepare for continued changes in radiology and for now, adopt the provisions of the Consolidated Appropriations Act of 2016.

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