On March 23rd, President Obama signed into law H.R. 3950, the Patient Protection and Affordable Care Act.  Subsequently, the House passed H.R. 4872, the Health Care and Education Reconciliation Act of 2010 by a 220-207 vote; it was signed by President Obama, thus ending the one-year healthcare reform debate. Among other changes, the Reconciliation Bill modifies the imaging services equipment utilization rate and reduces the technical component payment for sequential imaging services on contiguous body parts.   The bill is estimated to cost $940 billion over 10 years and is intended to provide coverage for 32 million uninsured by 2019.  The Centers for Medicare and Medicaid Services (CMS) will propose imaging-related implementation policies in their proposed 2011 Medicare Physician Fee Schedule rules to be released early this summer.

A brief summary of the major provisions of the Affordable Care Act and the Reconciliation Bill that impact providers follows.

Equipment Utilization Rate:

Under a provision in the Reconciliation Bill, the equipment utilization rate assumption for expensive diagnostic imaging equipment (priced over $1 million) will increase to 75 percent in 2011 and subsequent years.  This new provision will override the utilization rate policy published in the 2010 Medicare Physician Fee Schedule (MPFS) final rule, which transitions the increase in the equipment utilization rate to 90 percent over 4 years for equipment costing over $1 million.  The 75 percent utilization rate will be applied to all existing CT and MRI codes listed in the CMS rule regardless of when the system was acquired (before or after the effective date of the legislation) or the price actually paid.  CMS will subject new CT and MRI codes to the 75 percent utilization rate if the cost of the equipment is $1 M or greater.  Currently, CMS assigns an equipment code to a procedure code based on what is considered the "typical" cost incurred in acquiring the system.   The fact that some centers might use a different type of equipment platform for a particular code is irrelevant and this fact is neither reported nor known.  Similarly, if a used CT is purchased at a cost less than $1 million or the CT is leased it will not change the application of 75 percent use rate (payment) for the service under the MPFS.  While the Reconciliation Bill limits the 75 percent utilization rate increase to MR and CT services, CMS is free to propose use rate increases to other imaging modalities. For now, the use rate for all other physician fee schedule imaging modality codes remains at 50 percent.

Contiguous Body Parts Reduction:

The reduction in the technical component payment for sequential imaging services on contiguous body parts during the same visit is increased from 25 percent to 50 percent.