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J Oncol Pract. 2006 November; 2(6): 282–283.
PMCID: PMC2793654

Fending off Cuts to Medicare Imaging Payments

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Medicare imaging reimbursement faces cuts of more than $2.5 billion dollars during the next 5 years due to a section in the Deficit Reduction Omnibus Reconciliation Act of 2005 (DRA), which was passed in late 2005. The cuts are scheduled to go into effect on January 1, 2007.

Under the DRA, payment for imaging services will be paid at the Hospital Outpatient Department (HOPD) rate when the Physician Fee Schedule rate is higher than the HOPD payment. Approximately one third of the DRA's total Medicare savings will come from imaging, which comprises only approximately 10% of Medicare spending.

Immediately after the DRA cuts were enacted, the Access to Medical Imaging Coalition (AMIC) was formed. ASCO joined nearly 40 specialty societies, associations, organizations, and health technology firms in the coalition.

The imaging cuts in the DRA were driven largely by concerns in Congress and Medicare that imaging services are being overused. Thus, the reductions in payments for these services are aimed at deterring inappropriate use. However, the AMIC coalition believes that the spending cuts will not stop inappropriate use of imaging but will serve only to deny appropriate imaging services to Medicare patients who need them.

The coalition has worked to introduce the Access to Medicare Imaging Act of 2006 (AMIA) in both the House and the Senate. The House bill, HR 5704, sponsored by Rep Joe Pitts (R, Pa), has more than 90 cosponsors. The Senate version, S 3795, was introduced by Senators Gordon Smith (R, Ore) and Jay Rockefeller (D, WVa). The legislation would delay implementation of the imaging provisions in the DRA until 2009 while the Government Accountability Office conducts a thorough investigation of the true impact of imaging cuts on quality of and access to medical care. The legislation would require “a comprehensive study on patient access and service issues relating to the availability and quality of imaging services in physician offices and freestanding clinics” from the DRA cuts. The study, due to Congress by July 2008, would also include recommendations on extending or ending the moratorium.

AMIC contends that the best way to control inappropriate use of imaging services is to rely on physician-developed practice guidelines, not by cutting payments, to determine what is best for individual patients in a variety of treatment settings. Overuse and underuse are equally significant issues in application of medical imaging technology, and AMIC fears that DRA will discourage appropriate use rather than controlling overuse.

AMIC has joined other critics of the DRA, many of whom are in Congress, in the position that the imaging cuts are shortsighted. The process by which these cuts were included in the DRA was rushed and inadequately considered. There are also significant quality-of-care issues surrounding the DRA implementation, which include:

  • Reduced access to imaging services for patients in rural areas
  • Delays in receiving critical imaging services for all patients
  • Underuse of imaging as a result of policy changes

Cuts to imaging reimbursement may also have a detrimental effect on the growing use of electronic health records and telemedicine, both of which rely on access to digital images to ensure the highest quality of patient care in local facilities and over great distances when geography limits physical access to treatment.

Use of medical imaging has increased in tandem with advancements in medical treatment and the mounting availability and popularity of electronic and distance medicine, but concerns about overuse may not take into account the industry-wide trend toward digital tools. Imaging services such as computed tomography, positron emission tomography, and magnetic resonance imaging facilitate less invasive and less expensive medical diagnostic procedures such as mammography, surgical biopsy, virtual colonoscopy, and coronary and renal angiography.

A major concern surrounding the DRA is its one-size-fits-all approach to reimbursement. Reimbursing technical costs for free-standing practices that offer imaging services at the same rate as hospitals does not take into account the difference in overhead and operations costs shouldered by nonhospital physicians and imaging centers. Smaller centers may be forced out of business, limiting imaging services to hospital outpatient departments. This could lead to big challenges for patients in rural areas, who will have to travel long distances for access to advanced diagnostic and treatment tools that are no longer locally available. Worries that insurance companies will follow suit with similar reimbursement cuts also come into play.

Because new imaging technology allows physicians to diagnose and treat many life-threatening illnesses in early stages (thus enabling earlier treatment and often avoiding multiple surgeries), decreasing Medicare spending on imaging may not decrease overall spending. In fact, it could have the opposite effect—cost of multiple surgeries, more aggressive and expensive treatment techniques for advanced disease, and longer hospital stays and recovery time for invasive procedures could quickly outweigh the cost of diagnostic and evaluative imaging.

To learn more about the Deficit Reduction Omnibus Reconciliation Act of 2005 and the Access to Medicare Imaging Act of 2006, visit AMIC online at

Timeline for Deficit Reduction Omnibus Reconciliation Act of 2005 (DRA)

  • October 27, 2005: DRA introduced in the Senate by Sen Judd Gregg (NH)
  • February 8, 2006: DRA signed into law
  • June 28, 2006: Access to Medicare Imaging Act of 2006 (AMIA) introduced in the House of Representatives
  • July 19, 2006: Hearing held to evaluate AMIA
  • August 3, 2006: AMIA introduced in the Senate
  • January 1, 2007: Proposed implementation of imaging reimbursement reductions under current DRA provisions
  • January 1, 2007–December 31, 2008: Proposed moratorium on imaging cuts under AMIA during thorough Government Accountability Office investigation of effects on reimbursement reductions

Articles from Journal of Oncology Practice are provided here courtesy of American Society of Clinical Oncology