Payment cuts for pathology, radiology proposed by MedPAC

June 18, 2018

Payment cuts for several specialties — including pathology and radiology — could soon be on the horizon after the Medicare Payment Advisory Commission (MedPAC) proposed Congress implement several cuts to offset recommended increases in an attempt to “rebalance” the Medicare Physician Fee Schedule (MPFS).

In its June report to Congress, the advisory commission suggested a one-off adjustment to the fee schedule that would see payment rates for evaluation and pain management increase by 10 percent. To offset this increase, MedPAC is recommending a 3.8 percent cut to other services, including diagnostic radiology, pathology and physical and occupational therapy, according to the report.

If implemented as proposed, payments for evaluation and management services would increase by $2.4 billion, with endocrinology, rheumatology, and family practice seeing the highest proportional increases. Meanwhile, diagnostic radiology, pathology, and physical and occupational therapy would experience the 3.8 percent cuts “because they provide very few ambulatory and E&M services,” according to the report.

In case you haven’t been paying attention throughout the past decade, this is yet another reminder that the fee-for-service world of yesterday is rapidly dissolving as the push toward reimbursements based on quality and value continues.

MedPAC Executive Director Jim Mathews clarified this recommendation comes as a direct result of the commission’s belief that imaging exams, procedures and tests, among other services, are overvalued in comparison to evaluation and management services.

“We feel that although the effort to identify and correct misvalued services has made incremental improvements to physician payment accuracy in the fee schedule, these improvements have been largely overshadowed by what we call ‘passive devaluation’ of evaluation and management services,” Mathews said in during a June 15 call with the press.

MedPAC also hit on the issue of what it terms “low-value care”, such as imaging examinations, that the commission believes are being used too broadly.

The commission went on to propose six ways Medicare could address the problem of low-value care:

  • Expand prior authorization.
  • Implement clinical decision support and provider education.
  • Increase cost-sharing for low-value services to reduce their use.
  • Establish new payment models such as accountable care organizations that create incentives for reducing the use of low-value services.
  • Evaluate coverage determinations on an ongoing basis.
  • Link information on cost and clinical effectiveness of healthcare services to fee-for-service coverage and payment policies.

The report concluded with another call to revise the quality measures of the Merit-based Incentive Payment System to include more population-based and patient-experience measures that could be scored against a benchmark as opposed to the current scoring model that pits providers against one another.

This is just another reminder that groups who are sticking their heads in the sand while clinging to the fee-for-service world of yesterday are only expediting their obsolescence in this value- and outcome-based environment.

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