The companies that manufacture medical imaging equipment have a message for the Bush administration and Congress: Slow down.
Firms such as GE Healthcare, Varian Medical Systems and Siemens Medical Solutions have seen several consecutive years of cuts in Medicare payments for the use of their products, which range from X-rays to MRIs to PET scanners.
GE Health President and Chief Executive Joseph Hogan and other imaging company officials gathered at the White House Monday for an audience with presidential advisers to press their case that their industry is being asked to bear an unfair burden as Congress and the administration look to rein in Medicare spending.
Lawmakers have set their sights on imaging spending in particular based on evidence that spending doubled in the first five years of the decade.
Trade groups representing the companies are engaged in a push against additional regulations and legislation that they say will threaten Medicare patients’ access to the innovative, but expensive, technology.
Although the fees in question are paid to physicians or imaging facilities rather than the equipment manufacturers, reductions in those fees could discourage doctors from obtaining the latest technology or encourage them to perform fewer scans.
“We acknowledge there’s a growth in the sector. We don’t necessarily agree you can equate that growth as bad,” said Amy Jensen Cunniffe, director of government relations for the Advanced Medical Technology Association (AdvaMed).
AdvaMed is one of three trade groups leading the charge against the imaging cuts, along with the National Electrical Manufacturers Association’s Medical Imaging and Technology Alliance division, and the Access to Medical Imaging Coalition, which includes industry, physician and patient groups.
The industry has achieved some success so far in garnering support from key members of Congress.
Rep. Carolyn McCarthy’s (D-N.Y.) bill, which would postpone for two years cuts written into law in 2005, has 155 cosponsors, including members of the Energy and Commerce Committee from both parties. In the Senate, Jay Rockefeller’s (D-W.Va.) similar measure has 27 cosponsors, including fellow Finance Committee members, as well as Sen. Edward Kennedy (D-Mass.), Minority Whip Trent Lott (R-Miss.) and presidential candidate Sen. Hillary Rodham Clinton (D-N.Y.).
Despite getting the attention of these lawmakers, the imaging companies remain on the chopping block. House Democrats wrote billions of Medicare cuts into their bill to reauthorize the State Children’s Health Insurance Program (SCHIP), including a $400 million, five-year hit to imaging service fees.
In addition, the administration later this year will institute new regulations, based on statute, which could further squeeze fees for imaging.
The medical imaging companies are only one of a plethora of Medicare providers that have sought relief from cuts over the last few years. Notably, the Deficit Reduction Act of 2005 hit several sectors hard, including the imaging equipment makers. Those fee reductions took effect in January.
The movement to target specific Medicare providers for pay cuts, or reductions in the rate of growth of their fees, has persisted even as party control of Congress shifted.
To healthcare companies and their lobbyists, the current environment is reminiscent of the 1ate 1990s, when the Clinton administration and the Republican-controlled Congress implemented sweeping changes to Medicare payments as part of their push to balance the federal budget.
This year, House Democrats were partially, but urgently, motivated to find savings from the Medicare program to offset new spending on SCHIP.
In the case of medical imaging, Congress and the administration also have been spurred to curtail imaging expenses by evidence that Medicare spending on them rose at a staggering rate during the first half of the decade.
In testimony given before a House subcommittee in July 2006, Centers for Medicare and Medicaid Services (CMS) official Herb Kuhn told lawmakers that Medicare spending on imaging doubled between 2000 and 2005, reaching $13.7 billion.
During that span, the average annual increase in spending was 15.7 percent, said Kuhn, who this month was appointed CMS deputy administrator. Kuhn also said that the utilization of imaging services varies widely from one geographic region to another.
CMS and the Medicare Payment Advisory Commission (MedPAC) have been unable to definitively explain why this spending has spiked in the last few years. The industry also is unsure. “We don’t know for certain what all the factors are,” Jensen Cunniffe said.
MedPAC has suggested that the trend has been driven by a number of factors, such as the availability of costly and sophisticated new equipment, patient demand, flaws in the payment system that led to more scans being performed in doctors offices, “defensive medicine” practiced by doctors fearful of malpractice lawsuits, or simply the desire of physicians to increase their incomes.
Still, Kuhn told the panel, the trend suggested cause for concern, from both a fiscal and a clinical standpoint. “The rapid increase in Medicare spending for imaging services, coupled with extensive geographic variation in their use, raises questions about whether such growth is appropriate and whether all imaging services are used appropriately,” Kuhn’s written testimony states.
At the time of that 2006 hearing, CMS was in the process of implementing new imaging policies spelled out by the Deficit Reduction Act. AdvaMed estimates that those provisions will lead to an average fee reduction of 20 percent for imaging services.
The most devastating change for the imaging equipment sellers substantially scaled back the fee for administering scans in physician offices. Congress determined that such fees should be the same in doctors’ offices as they are in hospital outpatient departments. As an example of the prior discrepancy, Kuhn noted that an MRI cost Medicare $903 when performed in a physician office compared to $506 in a hospital outpatient facility. |
