Medicare Physician Fee Schedule Final Rule:
Impact on Radiology, Part I


Last month, the Centers for Medicare and Medicaid Services (CMS) released the 2017 Medicare Physician Fee Schedule (MPFS) Final Rule, which updates policies and payment rates for services provided on or after Jan. 1, 2017. CMS released the Proposed Rule for comment on July 7, 2016.

Overall, CMS estimates a 2017 conversion factor of $35.8887, a slight increase from the current conversion factor of $35.8043. This change reflects the .5 percent update included in the Medicare Access and CHIP Reauthorization Act of 2015, and will result in an estimated one percent decrease in radiology and interventional radiology payments. Radiation oncology and nuclear medicine payments will remain unchanged.

While this is an improvement from the proposed seven percent reduction in interventional radiology payments, starting in January, certain interventional radiology codes will be bundled, reducing reimbursement for some procedures. For example, cerebral arteriograms are currently reported with component codes, allowing doctors to receive payment for each vessel studied. Instead, procedures performed in 2017 will be reported wholesale, probably resulting in a lowered payment for half of the codes.

The Final Rule also confirmed that any relative value unit (RVU) reductions greater than 20 percent will be phased in annually; therefore, a code faced with a 50 percent RVU reduction would be limited to a decrease of 19 percent in total RVUs each year.

Below are additional changes and announcements from the Final Rule: 

New Bundled Mammography Codes
Starting in January 2018, codes for digital, film screen and computer-aided detection (CAD) mammography will be bundled into one set of three mammography codes. In 2017, CMS will continue using existing G-codes (G0202, G0204 and G0206). CMS will also not make any changes to the technical component (TC) reimbursement for mammography with CAD.

Practice Expense Inputs for Digital Imaging Services
CMS will price the professional PACS workstation at $14,616.93, and has provided a list of 426 radiology codes to which the professional PACS workstation will be added. They have also requested comment on additional codes. This change should result in a bump in TC.

Reimbursement Reductions for Plain Film X-rays
Reimbursement for X-rays taken with plain film will be reduced by 20 percent in 2017 and all subsequent years. In addition, reimbursement for computed radiography will be reduced by seven percent between 2018 and 2022, followed by a 10 percent reduction in 2023 and all subsequent years. To implement the plain film X-ray reduction, CMS has established a new modifier (modifier “FX”) to be used on applicable claims.

CMS has demonstrated over the past two years its commitment to getting digital images into the EMR. While some entities may choose to take a hit in 2017 rather than make the capital investment in digital radiology, the penalties in the coming years may warrant the investment.

Delayed CDS/AUC Implementation
CMS has delayed the implementation of the clinical decision support (CDS)/appropriate use criteria (AUC) program to Jan. 1, 2018 as policymakers continue to debate what CDS vendors will qualify as CDS solutions as well as the role radiology will have in the CDS process. CDS implementation will apply to orders for all advanced diagnostic imaging services, not just priority clinical areas.

The final list of priority clinical areas includes coronary artery disease (suspected or diagnosed), suspected pulmonary embolism, headache (traumatic and non-traumatic), hip pain, low back pain, shoulder pain (to include suspected rotator cuff injury), cancer of the lung (primary or metastatic, suspected or diagnosed), and cervical or neck pain.

CMS also finalized the requirements for the CDS/AUC reporting delivery mechanism. CMS will begin to accept the first applications for CDSMs immediately, with an application deadline of March 1, 2017. The qualified CDSMs will be announced by June 30, 2017.

Moderate Sedation
Medicare frequently pays for anesthesia services provided by an anesthesiologist or CRNA in conjunction with procedures that are defined as including moderate sedation. In order to eliminate this double payment, CMS is decreasing the RVUs of codes that previously included moderate sedation, and moderate sedation will now be separately reportable with all procedures, including those that were previously listed in Appendix G of the CPT® manual. For example, interventional radiologists who provide moderate sedation in conjunction with lower extremity revascularization or percutaneous biliary procedures should report the sedation service separately beginning on Jan. 1, 2017, using new sedation codes 99151-99157. Note that CMS has also created a HCPCS code (G0500) for moderate sedation, but this code is used only in conjunction with GI endoscopy.

Preliminary Comparative Analysis
We have performed a preliminary comparative analysis of 2017 versus 2016 with the “Imaging Cap” (lower of OPPS or MPFS) for all effected Technical Component CPT Codes. When a more complete analysis has been performed, IMP will update our blog with the results.

Overall, the Final Rule presents several benefits to the specialty of radiology. In addition to phased-in RVU reductions and the delay in CDS implementation, the rule upholds the mandate to lower the existing professional component multiple procedure payment reduction (PC MPPR) from 25 percent to five percent effective Jan. 1, 2017.

To learn more about the 2017 MPFS Final Rule’s impact on radiology and other medical specialties, please contact us.