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Yet Another Record High

The Radiological Society of New Jersey's website continues to grow, posting yet another new monthly record in July 2007 of 6009 visits! Congratulations! Click here to see a chart.

UnitedHealthcare (UHC) has announced that, beginning March 1, 2008, it will adopt accreditation programs, administered by the ACR—the nation's oldest and most widely recognized medical imaging accrediting body—or other accrediting organizations deemed acceptable to UHC, for MRI, CT, PET, nuclear medicine, nuclear cardiology, and echocardiography. UHC has encouraged member facilities to apply for accreditation as soon as possible.

The ACR stands ready to help providers meet this new standard. The accreditation section of the ACR Web site features extensive information to help facilities start the accreditation process and answer pertinent questions. Certified technologists are available to guide providers through the accreditation process as well.

With nearly 16,000 accredited facilities across the United States, and a long history of providing accreditation for diagnostic imaging and radiation oncology facilities dating back to 1963, the ACR has the infrastructure and experience in processing high volumes of applications to help qualified facilities gain accredited status.

ACR accreditation is an efficient process of both self-assessment and independent external expert audit, based on the ACR guidelines and technical standards, that assesses the qualifications of personnel, policies and procedures, equipment specifications, quality assurance (QA) activities, patient safety, and, ultimately, the quality of patient care.

Accreditation presents an opportunity for providers and facilities to demonstrate to their communities, patients, payers, and referring physicians that they are committed to providing the highest quality care. In fact, ACR-accredited facilities continually use their accredited status as an effective marketing tool.

Early submission of accreditation applications and materials is strongly recommended. Facilities seeking to meet the new UHC requirements should submit accreditation applications by June 1, 2007.

Please call the accreditation hotline at (800) 770-0145 or visit the accreditation section of the ACR Web site at http://www.acr.org/accreditation/index.html for more information regarding UnitedHealthcare's new accreditation requirement and how the ACR can help providers meet the new UHC standard in a timely, efficient manner.

Reimbursement rates for out-of-network providers will be reduced if the regulation recently proposed by the Department of Banking & Insurance ("DOBI") is adopted. Under the proposal, New Jersey large-group insurance plans (insurance plans purchased by employers of 50 people or more) would be permitted to pay out-of-network providers at a rate equal to 150% of Medicare. We are concerned that the proposal is part of a broad effort to drastically reduce reimbursement to physicians and physician-owned businesses across all segments of the insurance market in New Jersey. The proposal does not apply to hospitals.

Currently, out-of-network providers are entitled to bill and collect usual, customary and reasonable ("UCR") fees. In connection with determining what UCR means, insurers and healthcare providers often look to proprietary databases containing prevailing charge data, such as Ingenix or Wasserman PFR. The proposal, however, would permit insurance companies to base UCR on Medicare rates. DOBI admits in the summary of the proposal that UCR based on prevailing charges is much higher than Medicare rates. In fact, DOBI acknowledges that the 50th percentile of prevailing charges corresponds to 175% of Medicare. Thus, DOBI is proposing a cap substantially below the current 50th percentile.

The proposal would adversely affect providers in several important ways.

• First and foremost, the Medicare rate set forth in the proposal will immediately become a cap on out-of-network reimbursement, as opposed to a floor, as there would be no rule or regulation requiring insurance companies to pay anything more than the proposed amount.
• Second, the only leverage that providers have when negotiating contracts with insurance companies is the threat to not participate. If out-of-network reimbursement is reduced across the board through application of Medicare rates, then providers will not have a legitimate alternative to going in-network, and carriers will have an even more lopsided negotiating advantage. The further diminished negotiating power of providers, in turn, will drive in-network rates down. This would hurt all physicians and physician owned businesses, irrespective of current in-network or out-of-network status.
• Third, if providers wish to maintain UCR rates for services provided to out-of-network patients, they will be forced to balance-bill patients more regularly, and for larger amounts. Balance-billing reduces the probability of collecting for the full amount billed, and also decreases the likelihood that patients will agree to undergo out-of-network treatment at all.
• Fourth, the proposal is part of a broad attack against the out-of-network provider. In September, DOBI proposed a drastic modification to the PIP fee schedule that, if adopted, would significantly redefine how "UCR" rates are set by permitting the PIP carriers to determine UCR. Next, DOBI published the proposal which contains a Medicare based cap on out-of-network reimbursement. We are exceedingly concerned that this movement will continue to spread to each and every segment of the insurance market (small employer plans, individual plans, workers compensation, etc.).
• Fifth, it is well established in the literature that there is a direct link between declining reimbursement due to managed care and a decrease in physician participation in charity care as physicians struggle to pay their overhead and are no longer able to absorb the costs of providing such care.
• Sixth, Radiology has been especially hard hit financially as of late. For example, the recent requirements of the Deficit Reduction Act imposed a cap on the payment rate for the technical component of imaging procedures to the Hospital Outpatient Prospective Payment System ("OPPS"), the Resource Based Relative Value Scale ("RBRVS") results in decreased reimbursement for Radiologists, and the New Jersey Ambulatory Facility Assessment has imposed a 3% tax on surgery center gross revenues for physicians in New Jersey.
• Finally, a further reduction in reimbursement will make it increasingly difficult for established New Jersey physicians to attract new partners, which will ultimately result in decreased access to medical care for all New Jersey patients.

DOBI is accepting comments on the proposal up to April 2, 2007. Comments should be addressed to:

Robert Melillo, Chief
Legislative & Regulatory Affairs
20 West State Street
P.O. Box 325
Trenton, New Jersey 08625-0325
Fax: 609-292-0896
E-Mail: LegsRegs@dobi.state.nj.us

The Centers for Medicare and Medicaid Services ("CMS") is implementing two provisions, effective as of January 1, 2007, that affect payment for imaging services. First, CMS is modifying its previously announced multiple procedure payment reduction on certain diagnostic imaging procedures and second, pursuant to the Deficit Reduction Act of 2005 ("DRA"), CMS is implementing a payment cap for the technical component ("TC") of imaging procedures.

The first provision addresses payment for certain multiple imaging procedures, including ultrasound, CT, CTA, MRI and MRA procedures. Full payment is made for the first procedure. However, there is a 25 percent reduction in payment for the TC of additional imaging procedures furnished on contiguous body parts during the same imaging session. The decrease in payment for subsequent images had been previously announced as a 50 percent reduction for 2007. However, CMS was convinced that the 50 percent reduction was not justified, and maintained the 25 percent reduction implemented in 2006 instead.

The second provision limits the payment amount under the Medicare Physician Fee Schedule ("MPFS") to the hospital outpatient department ("OPD") payment amount (known as the outpatient prospective payment system ("OPPS")) for the TC of most imaging services regardless of where the service is performed. Previously, payment may have been higher if the procedure was performed in an ambulatory surgery center or other outpatient setting under the ambulatory payment system ("APC") rate.

This payment reduction is mandated by section 5102(b) of the DRA which becomes effective January 1, 2007. The Access to Imaging Act of 2006, which would have provided a two-year moratorium on the payment reduction requirement of the DRA, was introduced in the House and Senate this past term. However, Congress did not act on these related Bills prior to adjourning.

The DRA requirements do not affect the professional interpretation component ("PC") of imaging services and do not apply to mammography services. To determine if the payment is to be capped, the MPFS amount must be compared to the OPPS payment amount and the payment is made at the lower of the two.

For imaging services that are subject to both the multiple imaging reduction policy and the outpatient payment cap, CMS will first apply the multiple imaging adjustment and then will apply the outpatient payment cap. If the multiple imaging payment cut results in the MPFS being less than the APC payment, the MPFS amount will be used. However, should the MPFS payment still exceed the APC amount, even after the multiple imaging cut has been taken, the imaging facility is limited to the APC amount.

For more information regarding the 2007 fee schedule, please feel free to contact John D. Fanburg, Esq. of WolfBlock Brach Eichler at 973-228-5700 or via email at jfanburg@wolfblock.com.

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