CMS Finalizes Major Cut in Radiology Reimbursement

CMS Finalizes Major Cut in Radiology Reimbursement

After some delay due to the COVID-19 pandemic, the Centers for Medicare and Medicaid Services (CMS) has released the final set of guidelines that will govern the Medicare payment system for 2021. The rule for the Medicare Physician Fee Schedule (MPFS) was proposed earlier last year, and since then, slight revisions have been made including an improvement in the conversion factor and a change to the Quality Payment Program (QPP) performance threshold. 

Medicare Fee Schedule Payment and Valuation Changes

Conversion Factor

The final rule unveiled by CMS in December 2020 dictates how much Medicare physicians get paid for delivering care starting January 1, 2021. The conversion factor was originally proposed to be cut 10.6%, to $32.26, but the final figure is $32.41 for a 10.2% cut from the 2020 rate of $36.09. With the projected valuation adjustments in mind, CMS estimates the impact to radiology will be as follows:

Restructuring of Evaluation and Management (E/M) Services

The biggest factor impacting the decrease in radiology reimbursement is the adoption of a new coding structure for E/M services. The finalized policy marks the most significant updates to E/M codes in 30 years, with increased valuation of Level 2-5 office visits for established patients. Due to the requirement for budget neutrality within the overall Medicare program, increases in E/M payments will cause a reduction in payments for other services. 

Under the revised coding structure, physicians will have the option to document a visit based on time spent with the patient, or on the medical decision-making related to the visit. There will still be separate payments for each of the five levels of office or patient E/M visits, along with new codes for complex patients and prolonged visits. The new codes are as follows:

Impact on High-Volume Radiology Procedures

At the time  the proposed rule was announced in August 2020, Healthcare Administrative Partners conducted an in-depth analysis of the practical effects of the restructured fee schedule. They concluded that the decrease in the professional component for a typical radiology practice would be approximately 11-12%, as CMS estimated. However, with the revised conversion factor, most procedures will be cut in the 10-11% range and chest (thorax). CT reimbursement will be cut 17%. 

Supervision of Diagnostic Services

Nonphysician practitioners (NPP) will be permitted to supervise the performance of diagnostic tests, within the scope of practice, that is allowed by their state license.  NPPs include the following:

• Nurse practitioners (NP)
• Physician assistants (PA)
• Clinical nurse specialists (CNS)
• Certified nurse midwives (CNM)

The meaning of “direct supervision” of tests now includes the use of real-time audio and video technology. These rules went into effect temporarily in 2020 due to the COVID-19 public health emergency.

Revaluation of Services

According to the American College of Radiology’s (ACR) preliminary summary, there are over 40 new or revised codes impacting radiology. The ACR notes new codes for low-dose CT for lung cancer screening and medical physics as positive changes.

Quality Payment Program (QPP)

The following table shows the progression of performance category weights and threshold values for 2021 as compared the previous year.

By law, the Quality and Cost performance categories must become equally weighted at 30% by the 2022 performance period. The Performance Threshold was proposed to be 50%, but CMS finalized it at 60% for 2021. In addition, a new Alternative Payment Model (APM) Performance Pathway will be implemented this year, while the timeline for the Merit-based Incentive Payment System (MIPS) Value Pathways is being delayed until 2022. 

1. Quality Performance Category

As stated above, the Quality performance category will decrease over time to 30% by next year. However, since many radiologists do not receive a score in the Cost category, it is usually redistributed to Quality. As a result, Quality will continue to represent at least 60% of the score for many radiologists and it could become even more for a hospital-based practice, where the Promoting Interoperability value is also redistributed. 

Two measures have been removed beginning with the 2021 performance year:

• Measure 146, “Inappropriate use of ‘probably benign’ assessment category in screening mammograms”
• Measure 437, “Rate of surgical conversion from lower extremity endovascular revascularization procedure”

Two new administrative claims-based measures have been added:

• Hospital-wide, 30-day, all-cause unplanned readmission rate
• Risk-standardized complication rate following elective primary total hip arthroplasty and/or total knee arthroplasty

2. Cost Performance Category

Costs associated with telehealth services that are directly applicable to existing episode-based cost measures and the Total Per Capita Cost measure will be included.

3. Promoting Interoperability Performance Category

Changes made to the Promoting Interoperability (PI) objectives and measures include:

• Addition of an optional Health Information Exchange (HIE) bi-directional exchange measure
• The “Query of Prescription Drug Monitoring Program (PDMP)” measure becomes an optional measure worth 10 points

4. Improvement Activities Performance Category

Two activities were modified in the Improvement Activities performance category, and one was removed due to obsolescence. The COVID-19 clinical data reporting activity will be kept for 2021. 

Expert Healthcare Guidance at HIS

Healthcare Information Services (HIS) is a physician management company, specializing in revenue cycle management and consulting services. Our team has over three decades of experience working with orthopedic and radiology practices across the United States. We create customized solutions for our clients,as well as offer education, training, and updates related to the healthcare industry including CMS coding changes. If you’d like to learn more about our services or if you have any questions, please contact us today.