Here’s the blog’s first look at the healthcare reform bill offered by Senate Finance Committee Chairman Max Baucus (D-MT), also known as The America’s Healthy Future Act of 2009. Legislators on both sides of the aisle seem dissatisfied with it, often a sign that it has a chance to find its way into law.

I’ve gone through 233-page bill and sought out key provisions related to diagnostic imaging. I’ll include the text of the bill for those sections and added what it might mean to imaging. In the coming days, I’ll follow up with how the general provisions of the bill (for example, general Medicare reimbursement provisions.) would be affected. In case you don’t speak Washington gobbledegook, the “Chairman’s Mark” means the new bill’s provisions.

Have a look and let us know what you think.

What the bill says on Advanced Diagnostic Imaging Services

Current Law

Under the Medicare fee schedule, some services have separate payments for the technical component and the professional component. For example, imaging procedures generally have two parts: the actual taking of the image (the technical component), and the interpretation of the image (the professional component). Medicare pays for each of these components separately when the technical component is furnished by one provider and the professional component by another. When both components are furnished by one provider, Medicare makes a single global payment that is equal to the sum of the payment for each of the components.

CMS‘s method for calculating the Medicare fee schedule reimbursement rate for advanced imaging services assumes that imaging machines are operated 25 hours per week, or 50 percent of the time that practices are open for business. Setting the equipment use factor at a lower — rather than at a higher—rate has led to higher payment for these services. Citing evidence showing that the utilization rate is 90 percent, rather than the 50 percent previously assumed, MedPAC is urging CMS to use the higher utilization rate in the calculation of fee schedule payments for advanced imaging services.  According to MedPAC and the Government Accountability Office (GAO), there are opportunities to improve the efficiency of the Medicare fee schedule. In 2005, MedPAC recommended reducing certain fees to account for efficiencies and savings from the technical preparation and supplies achieved when multiple imaging services are furnished sequentially on contiguous body parts during the same visit.

Starting January 1, 2006, physicians receive the full technical component fee for the highest paid imaging service in a visit, but technical component fees for additional imaging services are reduced by 25 percent.

Chairman’s Mark The Chairman‘s Mark would increase the utilization rate assumption for calculating the payment for advanced imaging equipment from 50 percent to 65 percent for 2010 through 2013.  The rate would be further increased to 75 percent beginning in 2014.  The Secretary of HHS would be required to conduct a study by January 1, 2013 on the estimated impact of the utilization rate change on the following: (1) beneficiary access, including in rural areas; (2) utilization of advanced diagnostic imaging services; and (3) the estimated savings to the Medicare program over the period of 2010 through 2019.  In addition, the Chairman‘s Mark would increase the technical component payment reduction for sequential imaging services on contiguous body parts during the same visit from 25 percent to 50 percent.

What It Seems to Mean. The feared utilization rate change from the current 50% to the feared 90% would be reduced to 65% when the law would take effect. Then it would increase to 75% in 2014. That’s a loss to organized radiology, but less of a loss than it could have been.

Further, the bill would increase the technical component cut from 25% fo 50% for sequential imaging exams on contiguous body parts.

What the bill says on Imaging Self-referral

Current Law

Section 1877(b)(2) of the Social Security Act states that if a physician (or an immediate family member of a physician) has a financial relationship with an entity, the physician may not make a referral to the entity for the furnishing of designated health services for which payment may be made under Medicare or Medicaid. One of the many exceptions to this prohibition is for in-office ancillary services. This exception permits the furnishing of certain designated health services that are ancillary to the referring physician‘s medical services and where certain supervision, location, and billing requirements are met.

Chairman’s Mark

The in-office ancillary exception would include a requirement that with respect to magnetic resonance imaging, computed tomography, positron emission tomography, and any other designated health services as determined by the Secretary, the referring physician must inform the individual at the time of the referral that the individual may obtain the services from a person other than the referring physician, a physician who is a member of the same group practice as the referring physician, or an individual who is directly supervised by the physician or by another physician in the group practice. The individual must be provided with a written list of suppliers who furnish services in the area in which the individual resides. This new requirement would apply to services furnished after January 1, 2010.

What It Seems to Mean. Self-referrers will be required to tell their patients that they don’t have to have their imaging at the referrer’s facility and provide them a list of other imaging options in the area where the patients live. This looks like a way to appear to be doing something about self-referral without actually doing anything.

That’s our first look. Click here to see the entire bill.