The average cut of 11% in radiology reimbursement that is proposed by the Medicare Physician Fee Schedule for 2021 (MPFS) is the continuation of a trend that spans more than a decade.
In a study published last month in the Journal of the American College of Radiology the authors conclude that, “all imaging modalities yielded decreasing reimbursement rates on average” over the period 2007 to 2019 that they evaluated. Significant payment reductions to diagnostic radiology services began with the Deficit Reduction Act (DRA) of 2006 that took effect beginning in 2007.
The study by Dr. Soryan Kumar, et al, was limited to a review of global fees, which encompass both the technical and professional components of reimbursement. Many of the biggest cuts, such as in the DRA, affected the technical component more greatly, so a similar analysis of the professional component might show different results. In contrast, the analysis we conducted as part of our annual review of the MPFS Proposed Rule shows that this time the professional component will be affected more than global billing.
Our review of the proposed rule shows that the 2021 fee schedule reduction could be as little as 1% for diagnostic x-rays billed globally when performed in an imaging center or as much as 18% for the professional component of certain CT exams in a hospital setting. When you are faced with the task of estimating the impact of such a change for your practice, we always recommend a volume-weighted analysis using the practice’s historic Medicare billing in order to achieve the most accurate results. This will provide the appropriate blend of modalities and site-specificity for your practice and, given the abnormal conditions present in 2020, it might be a good idea to look back at 2019’s volume for representation of a more typical year.
The 2021 MPFS reduction results from a re-alignment of coding and reimbursement for Evaluation and Management (E/M) services that has the potential to significantly reduce reimbursement to radiologists due to the Medicare program’s budget neutrality provision. Payment for E/M visits will be increased under this rule which means that payment for other areas, such as radiology procedures, has to be reduced. Radiologists bill infrequently for E/M services, and so there will be no increase that will offset the cuts to imaging procedures.
The study by Dr. Kumar and his colleagues also notes what we often point out, that “Medicare decisions are typically the basis for the entire reimbursement market,” and eventually most payers will follow Medicare’s lead in reimbursement rates. Commercial payers will not automatically adopt Medicare’s values in 2021 but many fee schedules use Medicare as a base for future pricing.
There is widespread concern across most medical specialties about the fee schedule cuts in the proposed MPFS for 2021 and the possibility exists that The Centers for Medicare and Medicaid Services (CMS) will defer plans to implement it next year, especially as practices are still recovering from the pandemic-imposed service cutbacks this year. The final Medicare rule will be published in November following a public comment period. We will continue to monitor this important topic and keep our blog readers apprised. Subscribe today for all the latest information affecting your practice’s reimbursement.