The House passed a bill Aug. 1 that would severely cut imaging payments to help pay for expanded coverage for children without health insurance and prevent physician payments from dropping in 2008.

The House passed H.R. 3162, The Children's Health and Medicare Protection Act, by a vote of 225 to 204. The legislation, driven by a need to reauthorize the 10-year-old State Children's Health Insurance Program before it expires Sept. 30, makes some changes to the SCHIP bill that came out of the Ways and Means Committee July 27 (¹ Also see "House Bill Targets Imaging Payments To Help Fund Children’s Insurance" - Medtech Insight, 30 July, 2007., p. 7).

However, a number of Medicare cost-saving provisions that would be particularly onerous for imaging payments remain intact.

Imaging Payments Could Be Cut In Half - MITA

First, the bill would raise estimates of the amount of time that imaging equipment is in use at a medical practice from 50% of office hours to 75% (² Also see "CMS May Be Underestimating Imaging Equipment Use, Overpaying Physicians" - Medtech Insight, 19 June, 2006., p. 15).

Second, the bill would not allow CMS to set the interest rate it uses in capital cost calculations higher than its current 11% figure, and states the rate could be lowered to reflect prevailing market values. Both changes would significantly reduce reimbursement levels for imaging services.

The bill also instructs CMS to further reduce payments for multiple imaging procedures performed in one session on contiguous body parts. The technical component for such multiple services was reduced by 25% in 2006. The bill would deepen the cut to 50%.

The bill further proposes to replace the physician fee schedule's current sustainable growth rate formula with a system of separate updates. Five physician service categories would have payment updates capped at gross domestic product growth. A sixth category, primary care and preventive services, would cap updates at growth in GDP plus 2.5%.

Because spending for imaging services, one of the update categories, consistently grows faster than the GDP, the proposed system would almost certainly mean more large payment cuts.

Andrew Whitman, vice president of the Medical Imaging and Technology Alliance, called the provisions "short-sighted," saying they will disrupt health care and could cut imaging payments by more than half.

AdvaMed says it will focus on getting the imaging provisions removed when the bill goes into conference with its Senate counterpart.

New Provision Addresses Remote Monitoring

The bill also caps payments for home oxygen equipment at 18 months and ends the option of having Medicare pay upfront for patients to purchase power wheelchairs, instead requiring monthly rentals for up to 13 months.

A new addition to the House bill requires the Medicare Payment Advisory Commission to study whether remote monitoring improves outcomes in the home health care setting. The study would consider reductions in hospital admissions and overall Medicare spending due to the technology.

Due in 2010, the MedPAC report would include recommendations for enacting reimbursement policies "that increase appropriate utilization of remote monitoring equipment and services."

AdvaMed made securing reimbursement for remote monitoring a top legislative priority this year.

Many Republicans strongly opposed the legislation, particularly because in addition to raising taxes on tobacco products, it achieves large savings by scaling back private Medicare Advantage plans.

H.R. 3162 will have to be reconciled in conference with a very different SCHIP bill passed by the Senate Aug. 2 on a 68-31 vote. That bill does not include any of the Medicare provisions, instead funding SCHIP expansion entirely from tobacco taxes.

President Bush has threatened to veto the bills because they increase the current $25 billion in SCHIP funding by more than $5 billion over five years. The House bill increases funding by $50 billion, while the Senate bill ups it by $35 billion.

- Chloe Taft (c.taft@elsevier.com)

House Cuts Imaging Payments To Help Fund Children’s Health Insurance

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