Healthcare attorneys Andrew B. Wachler and Adrienne Dresevic investigated recent changes in laws that affect Medicare reimbursement rates relating to computed tomography (CT) services. What follows is their analysis of these laws.

Medicare Evens Out Playing Field for Physicians and Hospitals

Andrew B. Wachler, Esq. Adrienne Dresevic, Esq.
Wachler & Associates, P.C. www.wachler.com (248) 544-0888

Deficit Reduction Act of 2005-Section 5102

Medicare Physicians Reimbursed at Same Rate as Hospitals For Technical Component of CT Scanning

On January 1, 2007, section 5102 of the Deficit Reduction Act of 2005 ("DRA") was implemented. This provision is intended to even out the playing field between physician offices and outpatient hospitals with respect to reimbursement for the technical component ("TC") of CT scans and other imaging services provided to Medicare beneficiaries. Relevant to sinus, skull base, and temporal bone imaging, section 5102 of the DRA aligns the reimbursement amount paid to Medicare Physicians under the Medicare Physician Fee Schedule ("MPFS") with the amount paid to Hospitals under the Hospital Outpatient Prospective Payment System ("HOPPS").

Of note, the DRA will only impact reimbursement for imaging services provided to Medicare beneficiaries. It does not directly apply to other third party payors. Further, section 5102 of the DRA only applies to the TC of certain imaging services, including CT scans, and it does not apply to the professional component of these services.

Prior to the implementation of the DRA, imaging services provided to Medicare beneficiaries in non-hospital settings were always paid according to the MPFS, without regard for the HOPPS. The MPFS establishes separate codes and payment rates for each imaging service, taking into account factors specific to the settings in which the services are provided. Specifically, reimbursement for the TC of a procedure is designed to cover the overhead costs of practice operation, such as rent, utilities, salaries, etc.

Of particular interest to imaging providers who will be affected by the recent implementation of the DRA, presently two versions of an "Access to Medicare Imaging Act of 2006" are before Congress (H.R. 5704 and S. 3795). Both pieces of legislation would delay implementation of the imaging provisions of the DRA until 2009 so as to provide the government sufficient opportunity to investigate the impact of imaging cuts to patient access to care and to the quality of care provided. Although Congress declined to act on this legislation prior to its holiday break in 2006, supporters of the legislation have vowed to work to pass the legislation in the 2007 congressional session.

Tax Relief and Health Care Improvement Act of 2006

Elimination of Scheduled 5% Cut in Physician Fee Schedule

In positive news for physicians, on December 20, 2006 President Bush signed into law the Tax Relief and Health Care Improvement Act of 2006 (H.R. 6111). Among other provisions, this Act eliminates a scheduled 5% cut in Medicare reimbursement for physician services to Medicare beneficiaries scheduled to take effect January 1, 2007. The Tax Relief and Health Care Improvement Act of 2006 mandates a one-year freeze at the current Medicare conversion factor. Now that this Act has been signed into law, CMS must implement this one-year freeze.

* * *

This article does not constitute legal advice and should be used for informational purposes only. Andrew Wachler is the founding partner and Adrienne Dresevic is an associate with the healthcare law firm of Wachler & Associates, P.C. The firm represents physicians and other healthcare entities and providers with respect to their healthcare legal needs. Mr. Wachler and Ms. Dresevic can be reached at (248) 544-0888 or at awachler@wachler.com or adresevic@wachler.com.