Federal regulation of diagnostic imaging in the United States has increased dramatically in recent years. The primary statutes aimed at curbing escalating costs and reorienting the national priorities of health care have a direct effect on the specialty of diagnostic imaging. This paper surveys the major regulations and current issues that pose challenges to the practice of diagnostic imaging in the United States, from the Deficit Reduction Act of 2005 through the American Taxpayer Relief Act of 2012.
A driving force for change in oversight of physicians and hospitals was the release by the Institute of Medicine (IOM) of “To Err Is Human: Building a Safer Health System,” followed by “Crossing the Quality Chasm: A New Health System for the 21st Century” in 2001 . Concomitantly, efforts to curtail health care spending found in the Deficit Reduction Act of 2005 (DRA) resulted in reductions to Medicare payments in 2007 . The 2008 US presidential election brought new energy and congressional support for transforming the health care system: the American Recovery and Reinvestment Act (ARRA) in 2009 was followed the next year by passage of the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 (HCERA) . In 2012, the Supreme Court decision in National Federation of Independent Business et al., v. Sebelius, Secretary of Health and Human Services, et al. ( Nat’l Fed’n of Indep. Bus v. Sebelius ) ruled that with the exception of the Medicaid expansion, the requirements of the PPACA were within the power of the US Congress to enact under the Constitution . The reelection of President Obama in November 2012 and the continuation of his administration ensure that the transformation of US health care will proceed.
Diagnostic imaging and regulation
DRA of 2005
Diagnostic imaging services contribute to the unsustainable rise in US health care costs. The DRA of 2005 was one of three pieces of major legislation directed at curtailing the rapid increase in diagnostic imaging expenditures experienced by the Centers for Medicare and Medicaid Services (CMS). In 2005, the Medicare Payment Advisory Commission (MedPAC) Report to Congress drew attention to the 22% increase in imaging spending by the CMS between 2003 and 2004; 25% of that increase was attributed to advanced imaging services . Growth in the volume of diagnostic imaging had almost doubled to 18% from only 10% each of the previous 4 years. The major contributors to the imaging increases were private office and imaging centers for outpatients. Starting in 2007, the DRA directed a reduction in reimbursement rates under the Medicare Physician Fee Schedule (MPFS) for the technical component of advanced diagnostic imaging (magnetic resonance imaging [MRI], computed tomography [CT], positron emission tomography [PET], and nuclear medicine) in the private outpatient setting. Imaging performed in private offices was capped at the lower reimbursement rate of the Hospital Outpatient Prospective Payment System (HOPPS).
As required by the DRA, a report to Congress reviewing progress and options for volume control of physicians’ services was made by the Government Accounting Office (GAO) in 2008. Between 2000 through 2006, Medicare (Part B) reimbursement for imaging services had doubled to ∼$14 billion, an average annual increase of 13%. This is relative to the 8% increase for all Medicare spending for physician services during the same period . The GAO attributed the trend to (a) increased utilization and payments to in-office providers, (b) an increased proportion of income from imaging services derived by physicians, and (c) the wide variation in spending per beneficiary that was dependent on the geographic region where the imaging was provided. Between 2007 and 2008, payments for imaging dropped approximately $12 billion, a 12.9% decline from 2006, largely attributable to the DRA cap on reimbursements. Utilization rates, however, continued to grow, with those advanced imaging exams subject to the DRA cap increasing almost four times that of the imaging exams not affected by the cap .
Priming the pump: The ARRA
The American Recovery and Reinvestment Act (ARRA), enacted in February 2009, began an essential reorientation of funding priorities for the US health care system. One of the stated purposes of the ARRA is “to provide investments to increase economic efficiency by spurring technological advances in science and health” . The theory underpinning the policy objectives is that adoption of electronic health records (EHR) and health information technology (HIT) will synchronize and consolidate information among stakeholders to reduce the cost of health care and improve outcomes. The approximately $20 billion apportioned for the Health Information Technology for Economic and Clinical Health Act (HITECH) that is included in the ARRA stimulus funding provide incentives to Medicare and Medicaid health care providers for adoption of and meaningful use (MU) of HIT. This includes the creation and adoption of certified HER by eligible providers (EPs), eligible hospitals (EHs), or critical access hospitals (CAHs) who have not done so . Certified EHR technology (CEHRT) must have (a) the capacity to include patient demographic and clinical health information and (b) the capacity (i) to provide clinical decision support, (ii) to support physician order enter (computerized provider order entry [CPOE]), (iii) to capture and query information relevant to health care quality, and (iv) to exchange EHR with and integrate information with other sources .
Medicare and Medicaid MU incentives apply to those practitioners who meet the core criteria in stages or phases described by CMS . If begun by 2011–2012 and continued for 5 years, EPs who meet the criteria for the three phases are eligible for up to $44,000 for Medicare MU. All MU phases require CEHRT. Eligible professionals may receive up to $63,750 over 6 years under the Medicaid MU program if begun by 2016. Hospital-based EPs whose billed services are performed 90% or more in a hospital in-patient or emergency department setting are not eligible for incentives, but individual radiologists in group practices are eligible for the incentives. In 2015, eligible providers who do not satisfy the EHR criteria are subject to a financial penalty starting at 1% of their allowed fees in the Medicare Professional Fee Schedule (MPFS). This escalates 1% per year until 2019. In combination with the 2% penalty set for 2016 for nonparticipation in the Physician Quality Reporting System (PQRS), providers unwilling to engage in the CMS expanding pay-for-performance programs may reconsider that position .
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A lesson in federalism and state sovereignty: PPACA
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Fiscal cliff and American Taxpayer Relief Act of 2012
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