Key changes in the Center for Medicare and Medicaid Services final rule for the 2014 Hospital Outpatient Prospective Payment System reimbursement rates may soften possible drastic cuts to MR and CT procedures that range from 15 to 35 percent.

Earlier this year, CMS came out with a proposed rule to create separate cost-to-charge ratios for MR and CT — a rule that MITA, ACR, and other medical imaging stakeholders oppose.

According to critics, the root of the problem lies in some of the accounting formulas hospitals use to calculate the cost of their services.
One way to do so is through the so-called "square footage" method, which critics allege is a less accurate way of calculating the cost of equipment and services, particularly for CT and MRI.

"The cost of MR/CT providing is undervalued because the cost of the equipment — a major portion of the cost in services — isn't being fully accounted for," explains Orkideh Malkoc, director of reimbursement at MITA.

Ultimately, CMS agreed. The agency recommended hospitals use alternative methods, such as the dollar method or the direct allocation method, to calculate the cost of providing these services instead.

It's estimated that over 1,000 hospitals currently use the square footage method to calculate cost of CT and MRI services.

The final rule encourages hospitals to transition from this method of accounting to either of other two alternative methods by excluding any cost data that were obtained from hospitals using the square footage method.

However, this policy will only remain for the next four years: starting in 2018, CMS will use submitted hospital data to estimate cost-to-charge ratios, even if the hospitals use the square footage method.

"It's a significant concession on their part to do that," said Gail Rodriguez, executive director of MITA. "This was a step in the right direction."

Physician fee caps

More good news for imaging proponents: in its final physician fee schedule rate, CMS rejected a proposal that would have capped payments for more than 200 codes within the physician fee schedule at the 2013 hospital payment level for services such as diagnostic imaging and radiation therapy and pathology.

Though CMS has backed down from this proposal for now, experts speculate that such proposals will continue to rear their heads in the future.

"This is more religion than policy. I think this thing will come back and they'll continue to revisit this and I think it will be a challenge for the future," said Tim Trysla, executive director of AMIC. "Ultimately, AMIC wanted to make sure CMS understood the complexity of this proposed rule and its impact on providing access to important technology for patients," he said.

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