March 20, 2006
TO: AACE MEMBERS
FROM: BILL LAW, JR., MD, FACP, FACE, PRESIDENT
SUBJECT: CUTS IN MEDICARE PAYMENT FOR IN OFFICE IMAGING SERVICES –
ACTION REQUESTED: Please call your U.S. Congressman/Congresswoman (if they are Republican) and ask that they sign on to the letter to Speaker Hastert concerning the cap on Medicare payment for the technical component of imaging services that are provided in physician offices, enacted under the Deficit Reduction Act of 2005. This letter is being circulated by Congressman Joseph Pitts (R-16th-PA), Congressman Sam Johnson (R-3rd-TX) and Congressman Jim Gerlach (R-6th-PA). Your representatives can contact these offices for more information about the letter to Speaker Hastert and to co-sign the letter. The deadline to sign the letter is May 1st. You should ask to speak to the health legislative assistant to make this request. Ask the staffer to please get back to you and let you know whether or not their boss signed onto the letter. You may call your congressional representative’s office by contacting the U.S. Capitol switchboard at 202-225-3121, and asking to be transferred to your particular representative’s office.
BACKGROUND: A new provision in the Deficit Reduction Omnibus Reconciliation Act of 2005 (DRA) that becomes effective January 1, 2007, requires that the Medicare payment for the technical component (e.g., equipment, non-physician personnel, supplies, and overhead) of an imaging service performed in a physician’s office to be set at the Hospital Outpatient Department (HOPD) payment rate, if the HOPD rate is lower than the Physician Fee Service (PFS) payment rate. For some services, the physician fee schedule is already the lower of the two payments so this provision will have no impact on technical component payments. However, for some services endocrinologists provide – such as ultrasound guidance and the DEXA bone density scans – the hospital outpatient department payment is lower. AACE members could see the technical component payment for these two diagnostic imaging services reduced by approximately 40% beginning in 2007 if Congress does not act to repeal or delay the provision.
This was a provision slipped in during the budget reconciliation conference negotiations just before Christmas and was used to pay for the “freeze” in the Medicare physician payment. Physicians were scheduled to have a 4.4% reduction under the SGR formula in 2006. The cost of “freezing” payments at 2005 levels instead of having them cut by 4.4% is $7.3 billion. The conference negotiators needed to find a way to offset the $7.3 billion cost from other Medicare programs, so they inserted the imaging provision without any debate or review by either House or Senate. Representatives from the Coalition for Patient Centered Imaging – a coalition of specialties, including AACE, which is fighting restrictions on in office imaging sought by the radiology community – suggest that it was strictly a cost decision without any consideration of the potential impact of the provision or whether or not it was a good policy.
AACE congressional visitation participants raised this issue in their Capitol Hill visits on March 8th. The AACE legislative fact sheet on this issue is attached for additional background information (Attachment 1).
Republican members of the House of Representatives are sending a letter to House Speaker Dennis Hastert asking for his help to address the cut in the Medicare imaging technical component payment under the Deficit Reduction Act of 2005 (DRA).
They are trying to get as many of their Republican colleagues in the House of Representatives as possible to sign on to this letter as a demonstration of broad based support for fixing this provision. The deadline to sign on the letter is the end of March. The “Dear Colleague” letter seeking House Republican co-signers and the letter that will be sent to Speaker Hastert is also attached for your information (Attachment 2).
The number of co-signers on this letter will reflect the breadth of congressional support to reverse this provision and will be a determining factor on whether or not Congress addresses this issue. Your help with this effort is very important and we will appreciate your advising us of the results of your contacts.