HPC Corner: MPFS Final Rule 2020 and Impacts on Radiology

By Ryan K. Lee, MD, MBA

The most recent final rule of the Physician Fee Schedule released last November brought about significant changes. Without intervention by Congress, or further action from CMS, these will have negative effects on radiology. In short, CMS finalized wholesale changes resulting in E/M coding increases across the board. To understand how this will affect radiologists, let us review how physician reimbursements occur in the CMS world.

Payment for physicians’ services can be calculated as follows:
Relative Value Units (RVU) x Conversion Factor (CF) = CMS Payment

The conversion factor is set annually by Congress —for 2020, it equals $36.0896. It is scheduled to remain essentially flat for the next few years due to a provision in MACRA.

As an example, Medicare’s global payment for CT of the head without contrast (CPT 70450) with RVU of 3.25 is calculated as 3.25 x $36.09 = $117.29.

The keyword in RVU is “relative.” In theory, the RVU value assigned to any given procedure is on a graduated scale including all other CPT codes. For example, the RVU for hand x-ray, 3 views (CPT 73130), is 0.98. Thus, CMS views the noncontrast CT of the brain as a little more than three times the value of a 3-view x-ray series of the hand. Furthermore, this relativity of procedures holds across specialties so that these relative values can be compared to procedures in other specialties.

Total expenditure of physician reimbursement can be thought of as the sum of all RVUs that we as physicians across all specialties generate multiplied by the conversion factor. Therefore, when CMS increased E/M codes across the board, they increased the total payments for physician reimbursement. However, CMS is under orders to keep total physician reimbursement budget neutral and as such any increases in physician payment must be balanced by decreases elsewhere. The most logical method for

CMS to do this is by decreasing the conversion factor to bring back total CMS payments to its target amount in order to respect budget neutrality.

Those specialties that bill predominantly E/M codes will have that CF decrease mitigated because of the wholesale increases in E/M RVU valuation, and in some cases may see an increase in their reimbursement. Those specialties that bill little or no E/M codes, such as diagnostic radiology, will only see the decreased payments. In fact, CMS estimated that the effect on Diagnostic Radiology will be an 8% decrease in payments for 2021 and that Interventional Radiology will suffer a 5% decrease in reimbursement. The smaller decrease in reimbursement in interventional radiology is likely due to the ability of IR to bill for at least some E/M codes.

Thus, the MPFS final rule is anticipated to have significant deleterious effects on radiology reimbursement. What can be done? We can lobby CMS to waive the requirement of budget neutrality until the full effects of these final rule changes can be properly investigated. This is not necessarily a quixotic fantasy — multiple other specialties that are predominantly procedurally based will also be affected, and are also joining the fray. In fact, that is exactly what the ASNR, ACR, and multiple other societies have already done.

We can also mitigate these reimbursement decreases by thinking outside of the box. For example, we can increase the amount of E/M billing for services we perform. One idea to consider might be to include patient visits in some manner. At my institution, we experimented in offering patients the option of speaking to the radiologist after a confirmed diagnosis of breast cancer to make sure that the patient understood the role the diagnostic imaging findings played in their overall treatment. A case can be made that these patient consultations be eligible for E/M code reimbursement. It is easy to consider how something similar could be adopted in patients with newly diagnosed brain tumors.

Finally, as these fee-for-service payments continue to decline, looking into alternative reimbursement models will become more of an attractive option. CMS has been explicitly promoting this transition away from fee-for-service into a quality-based paradigm with its continued promotion of advanced alternative payment models. Although radiology is still currently in a predominantly fee-for-service environment, the long-term viability of this paradigm is in question. It is essential that we begin exploring how radiology can fit into these new models.