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Three steps for stabilizing advanced imaging pricing and utilization

por John R. Fischer, Senior Reporter | April 29, 2021
Business Affairs Insurance
A group of researchers have proposed solutions for addressing 'dysfunctional' Medicare payment system for advanced imaging
Researchers at Brookings and the USC Schaeffer Center for Health Policy & Economics have called the current Medicare reimbursement system for advanced imaging "dysfunctional" — a consequence, they say, of lack of uniformity and transparency in pricing and poor management of equipment.

Decreased utilization and policy changes have reduced Medicare payments and led to procedures being performed less in doctors' offices and more in hospital outpatient departments, where rates are less affected. This, in turn, has led to higher payments for high-volume services in HOPDs [covered under the Outpatient Prospective Payment System (OPPS)] than in doctor’s offices [covered by the Physician Fee Schedule (PFS)].

In a new white paper, Medicare advanced imaging payment: Dysfunctional policy making, the researchers propose three ideas for fairly pricing OPPS and PFS services, and better managing the use of radiological equipment.

1. Establishing a more systematic method that sets payment levels for services that require expensive equipment in advanced imaging studies. Repeat surveys to stay on top of current data in this area. “Advanced imaging is one area where equipment is the dominant component of costs, and changes rapidly as technology advances,” they wrote.

2. Be neutral, and set up payments under the PFS and OPPS together, as doing so separately results in often widely diverging fees and shifts in site of care to take advantage of payment differences. Higher overhead costs for 24/7 emergency staffing and inpatient needs should be incorporated but will only make a modest differential in essential rates.

3. Employ prior authorization to manage advanced imaging services under PFS and OPPS instead of Appropriate Utilization Controls, which rely on decision support mechanisms but have not been used as a payment tool. “While the law establishing the AUC program allows for prior authorization to be called upon in cases where clinicians are shown to be outliers in their ordering of advanced imaging, CMS has not provided information on how outliers will be identified and how prior authorization will be applied.”

The white paper is part of the USC-Brookings Schaeffer Initiative for Health Policy, which is a partnership between the Economic Studies Program at Brookings and the USC Schaeffer Center for Health Policy & Economics.

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