The International Contrast Ultrasound Society (ICUS)

U.S. MedPAC Recommendation on site-neutral payment policy - Harbinger of things to come for cardiac imaging

The Medicare Payment Advisory Commission (MedPAC) June 2013 Report to Congress portends some seismic changes in echocardiogram reimbursement. MedPAC, an independent Congressional agency established to advise the U.S. Congress on issues affecting the Medicare program, recommended in 2012 that payment rates for office visits should be the same whether care is provided in a hospital outpatient department or freestanding physician office. The June 2013 Report goes further, recommending 66 groups of services where outpatient department (OPD) payment could be aligned with the physician office rate.
Of particular concern to ICUS physicians, the impact on cardiology could be significant if Congress or CMS adopts the MedPAC recommendations. The net effect is to regress hospital outpatient rates to physician fee for service rates. Why is this a concern? Cardiology practices have trended toward hospital integration over the past few years, based largely on much higher imaging reimbursement in the hospital outpatient environment (and declining reimbursements and rising operational costs for private practice office based imaging, with total cuts of about 70% over a recent two year period).
MedPAC notes that when a level II echocardiogram without contrast is provided in a freestanding office, the payment to the physician is $188.31 (physician work, plus PLI, plus nonfacility PE) (Table 2-3 of the 2013 Report). If the service is provided in a hospital OPD, the total payment equals $452.89 (physician work, plus PLI, plus facility PE, plus OPPS payment). However, a policy that aligns rates across settings would see the OPPS rate drop to $125.91 and the total payment fall to $188.31, which is the same rate that is paid in a freestanding office.
The MedPAC release can be found at the link below, see "Reducing Medicare Payment Differences Across Sites of Care":
Full 300 page report is at the link below, see "Medicare Payment Differences Across Ambulatory Settings," pages xii and Chapter 2:

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