06/26/2009: The Future of Medical Necessity
CodeMap®-06/26/2009: The Future of Medical NecessityArchive
CodeMap® Compliance Briefing: 6/26/2009
Today, we welcome a new contributing author to the CodeMap Radiology Briefing, Mr. Glenn Krauss. Glenn is an independent coding consultant in Milton, Wisconsin. In his first submission to the CodeMap Radiology Briefing, Glenn discusses the many changes that may be in store for radiologists and imaging providers concerning the medical necessity requirements of the Medicare program. As the following discussion demonstrates, proposed programs and demonstrations occurring now, may significantly affect providers' ordering patterns and the resultant reimbursement in the future. Any comments, suggestions, or questions may be emailed to Glenn or me.
Introduction: Growth of Advanced Diagnostic Imaging Services
According to a report by the Association of Health Insurance Plans, almost $100 billion a year is spent on imaging in the U.S. and these costs are expected to double in just four years. The costs of diagnostic radiology services is growing at an unsustainable 20% rate, higher than any other current medical expense, increasing at twice the rate of prescription drugs and faster than overall healthcare spending of 10% per year.
As the population continues to age and baby boomers enter the Medicare program, the volume and intensity of radiology services will continue to grow. During the time period of 2000 to 2006, Medicare Part B spending for imaging services paid for under the physician fee schedule more than doubled, increasing to about $14 billion from $7 billion. Spending on CT scans, MRI, and nuclear medicine, which are generally more complex and therefore more costly, rose faster, 17 percent annually on average, than ultrasound, X-ray and other standard imaging procedures, which grew 9 percent annually on average. Overall, about 4 of every 5 dollars of the spending growth rate for imaging services was associated with the growth in volume and complexity of imaging services rather than other factors, such as changes in physician fees or beneficiary population increases. (Medicare Part B Imaging Services, Rapid Spending Growth and Shift to Physician Offices Indicates Need for CMS to Consider Additional Management Practices. GAO Report to Congress, June 2008)
Current Efforts to Rein in Costs and Patterns of Ordering Advanced Diagnostic Imaging Services
Aside from the Deficit Reduction Act capping the technical component of the payment for services performed in a doctor’s office at the level paid to hospital outpatient departments for such services effective January 1, 2007, there are other current CMS initiatives to address and curtail the explosive growth in advanced diagnostic imaging services. The first entails CMS commission of the Lewin Group, in conjunction with National Imaging Associates and Dobson & DaVanzo, to develop a set of efficiency measures for the following clinical radiology modalities (ImagingMeasures.com):
SPECT MPI And Stress Echocardiography for Preoperative Evaluation for Low-Risk Non-Cardiac Surgery Risk Assessment
Use of Stress Echocardiography or SPECT MPI Post-Revascularization Coronary Artery Bypass Graft
Use of Computerized Tomography in Emergency Department for Headache
Simultaneous Use of Brain Computed Tomography and Sinus Computed Tomography
The second initiative, referred to as the Medicare Imaging Appropriateness Criteria Demonstration Project, was authorized by Section 135(b) of the Medicare Improvement for Patients and Providers Act of 2008 (MIPPA) for the purpose of collecting data regarding physician use of advanced diagnostic imaging services. Advanced diagnostic imaging in this project includes MRI, CT, and nuclear medicine (including PET). As part of this two-year Medicare demonstration to assess the appropriate use of imaging services beginning January 1, 2010, data will be collected relating to physician compliance with appropriateness criteria in order to determine the appropriateness of advanced diagnostic imaging services furnished to Medicare beneficiaries. The Secretary of Health and Human Services is required to consult with medical specialty societies and other stakeholders in crafting such criteria. The criteria selected would be required to be a) developed or endorsed by a medical specialty society, and b) developed in adherence to appropriateness principles developed by a consensus organization, such as the AQA alliance.
Of note is that the physicians will apply and report the criteria at the point of care or point of ordering. Under the point of care model, physicians must confirm with the beneficiary that the imaging service was provided, and document the appropriateness of the service using the established appropriateness criteria. Under the point of care model, a computerized order entry system with decision support would automate the data collection process. The key to the data collection process is the provision of physician feedback reports encompassing utilization rates and compliance rates to appropriateness criteria for individual physicians as well as their peers participating in the demonstration.
Where is Medicare Going with the Appropriateness Project?
The Senate Finance Committee on April 29, 2009, released its Description of Policy Options entitled Transforming the Health Care Delivery System: Proposals to Improve Patient Care and Reduce Health Care Costs. As part of the policy options, the Senate Finance Committee is proposing to use the Diagnostic Imaging Appropriateness Criteria Demonstration project as a framework for developing and implementing reimbursement methodologies that modify how current imaging services are delivered and paid. In a similar fashion as the demonstration project, nationally recognized, transparent appropriateness criteria and use measures would be established and an education and feedback program regarding patterns of adherence to imaging appropriateness criteria through standardized reporting would be implemented. The feedback would include baseline rates of adherence and goals for patterns of adherence to appropriateness criteria for medical imaging. The confidential comparison reports on patterns of adherence to appropriateness criteria when ordering an advanced diagnostic imaging study, including top inappropriate indications, would be aggregated by ordering physician, ordering practice and interpreting practice, and would be sent to all ordering and interpreting practices. Designated imaging procedures in which appropriateness criteria may be established are related to high volume services including but not limited to: low back pain, shoulder pain, musculoskeletal disease, abdominal pain, and headaches.
Beginning January 2013, physicians would face payment reductions according to the degree of adherence to the established appropriateness criteria for Medicare Advanced Diagnostic Imaging Services. The Secretary would use 2011 data to identify ordering physicians who are outliers for inappropriate ordering, and apply a reduction of 5 percent to the 2013 conversion factor for outlier physicians who do not incorporate appropriateness criteria into their practice. This reduction would apply to all services furnished by the physician in 2013.
Implications for Physician’s Business of Medicine: Opportunity is Knocking
Payment terms for diagnostic tests come under Medicare Local and National Coverage Determinations. Appropriateness of test ordering is managed through establishment of “covered diagnoses” that govern and control provider reimbursement. Physicians are free to order any tests felt appropriate for clinical management and patient work-up; however, Medicare’s policy through LCD and NCD promulgation is to determine the indications and limitations of coverage for specific tests that are high volume, high cost and/or subject to overuse or inappropriate use. The Medicare Imaging Appropriateness Criteria Demonstration Project and Senate Finance Committee proposal to penalize physicians for nonadherence to established appropriateness criteria for specific diagnostic radiology exams is an attempt to hold physicians accountable for proper ordering of radiology tests through financial incentives and penalties.
Presently, hospitals bear the brunt of the financial repercussion for performance of noncovered diagnostic radiology services. A hospital’s response to minimize denials and manage the test ordering process is to install medical necessity software at the front end before the test is performed or install the software at the back end as part of provide and chase, provide the service and chase down a hopefully covered diagnosis. The hospital or physician practice, if the physician practice performs the radiology test in the office, can now use the proposed financial penalty for inappropriate ordering of diagnostic radiology tests as part of a strategy to “reeducate” and “reinforce” the need for the physician to consider the appropriateness of ordering the tests, focusing upon identifying other tests that may be more appropriate given the patient clinical scenario. The need for the physician to consider diagnostic yields for the test and whether the test results will change the physician’s medical management can be raised as part of the physician ordering education process to promote the ordering of the right test for the right reason at the right time.
Now is the time to take advantage of the opportunity to capitalize upon improving physician patterns of effectiveness and efficiency in ordering of radiology tests. Stress to ordering physicians that how and why they order tests today, may very well affect their reimbursement in the not too distant future. Shared accountability for appropriate ordering of radiology tests is the best approach to physician education. Collaboration in healthcare delivery will serve as the fundamental basis for business financial success in these challenging economic times.