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Medicare to cut analog x-ray payments starting in 2017

By Brian Casey, AuntMinnie.com staff writer
February 8, 2016 -- As part of a push to nudge U.S. healthcare providers to adopt digital
radiography (DR), the Medicare system will begin reducing payments for exams performed on
analog x-ray systems starting in 2017. The year after that, sites using computed radiography
(CR) equipment will also see payment reductions.
Medicare payments will be reduced by 20% for providers submitting claims for analog x-ray
studies starting in 2017 under a provision in the Consolidated Appropriations Act of 2016,
which was enacted into law in December 2015. Starting in 2018, payments for imaging studies
performed on CR equipment would be reduced by 7% for the next five years, and 10% after
that.
While the law's provisions on analog x-ray are expected to have a minor impact due to the
small number of traditional systems still in operation in the U.S., the reductions in CR
payments could have a much broader effect: More than 8,000 CR units are still in service in
the U.S. All of these systems must be replaced or imaging facilities will experience payment
reductions.
Transforming the oldest modality
The adoption of DR over the past two decades has transformed medical imaging's oldest
modality, enabling bread-and-butter x-ray images to be acquired quickly and then easily
transferred into PACS for distribution, interpretation, and archiving. Before DR arrived, many
facilities upgraded their x-ray equipment with CR, which replaced film-screen cassettes with
imaging plates that can be carried to a reader for digital output.
The provisions inserted into the Consolidated Appropriations Act are designed to speed the
transition of U.S. healthcare providers toward digital radiography by changing the Hospital
Outpatient Prospective Payment System. Classified as a "special rule," it specifies a 20% cut
starting in 2017 to the technical component of reimbursement for an x-ray taken using film.
The cuts for CR are phased in over time, starting in 2018. Payment for the technical
component of an x-ray acquired using computed radiography will be reduced by 7% during the
years 2018 to 2022 and by 10% after that. Complete text of the act can be viewed by clicking
here.
Origins of the provision began about a year ago, when the American College of Radiology
(ACR) began working with various manufacturers, in particular Varian Medical Systems,
according to Cynthia Moran, ACR's executive vice president of government relations,
economics, and health policy.

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While Varian is best known for radiation therapy systems, it also manufactures DR panels for
inclusion into new OEM x-ray systems and offers DR retrofits for installed analog and CR x-ray
systems in the field.
The DR provision was originally inserted into the 21st Century Cures Act, legislation proposed
in 2015 that among other things would have repealed the Multiple Procedure Payment
Reduction (MPPR). The controversial MPPR rule was implemented by the U.S. Centers for
Medicare and Medicaid Services (CMS) in 2012 and reduced reimbursement by 25% for
imaging studies performed on the same body part on the same patient in the same imaging
session.
The 21st Century Cures Act passed the House of Representatives on its own, but on arrival in
the Senate many of its provisions were folded into the Consolidated Appropriations Act -including the DR provision and a change in the MPPR from 25% to 5%, Moran said. The
budget bill eventually passed with both provisions intact, she said, and was signed by
President Obama.
ACR worked with vendors, including Varian and the Medical Imaging and Technology Alliance
(MITA), on getting the DR provision inserted into the Consolidated Appropriations Act in
exchange for their support in reducing the MPPR cut, Moran said.
"They supported us in us trying to get MPPR payment reduction passed, and so we partnered
with them to go to Congress to see if they would do the two imaging provisions and handle
them at one time," Moran said.
While it's tough getting any proposed legislation through Congress, Moran said the two
provisions were attractive because they will save the federal government $350 million over the
next 10 years. In the case of the DR provision, the savings will come from lower Medicare
payments being made to hospitals operating analog and CR equipment.
Legislation's impact
How much will the legislation affect U.S. hospitals? Not much when it comes to analog x-ray,
as the number of film-based systems operating in the U.S. has fallen to miniscule levels,
according to market research firm IMV Medical Information Division.
In its 2013 x-ray market report, IMV projected that fixed analog general x-ray rooms made up
just 1% of the installed base at U.S. hospitals, down from 5% in 2010. Indeed, the decline in
the analog installed base was so great that in its 2015 report IMV didn't bother to ask radiology
administrators how many analog units they were still operating, according to IMV Senior
Director Lorna Young.
"So few people have film that it's not worth talking about," Young said. "I think film in the
installed base has gone virtually to nothing."
CR offers a different story. While still considered digital, the technology lacks the workflow
efficiency of DR, and sales have been declining over the years. While CR made up 55% of
new digital x-ray sales in 2006, that number fell to just 6% in 2015, with the rest of digital x-ray
sales made up by DR, according to IMV.
Still, years of strong CR installations mean that the technology still makes up a significant part
of the installed base of digital x-ray systems, unlike analog x-ray, Young said. In IMV's 2015
report on the x-ray market, the firm estimated that there are 16,775 fixed general x-ray
systems installed at hospitals in the U.S. (a figure that does not include mobile units or

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systems installed at outpatient locations). Of that total installed base, some 8,545 systems are
CR.

Click image to enlarge.

Imaging facilities will therefore have to decide whether to spend the money to upgrade their
CR equipment to DR, or swallow a 7% to 10% reduction in payments for x-ray studies. Many of
these facilities are located in rural areas, with less access to the capital needed to buy new
equipment.
In its 2015 x-ray market report, IMV said that 62% of hospitals were already planning to buy
either a new x-ray system or a DR retrofit kit in the coming years. Of these, 70% of sites with
fixed CR systems are planning purchases, Young said, while only 34% of sites with fixed DR
are making purchasing plans -- perhaps indicating their satisfaction with the newer technology.
Converting to DR will produce workflow and efficiency gains -- as well as lower radiation dose
-- for the U.S. hospitals that finally make the switch to fully digital operation, according to
ACR's Moran.
"Clearly analog is felt to be antiquated and not helpful. CR is clearly less antiquated, much
more in use, and has many advocates for it, but even that market is moving fairly quickly to
digital," she said. "This policy just furthers that along."
For Varian's part, the company sees its support for the legislation as adding impetus to a
positive trend in healthcare, according to Spencer Sias, vice president of communications and
investor relations at the company.
"We believe that digital imaging makes it possible to lower the cost per procedure by allowing
for higher throughput in imaging centers," Sias told AuntMinnie.com. "We eliminate the need to
buy, process, develop, and store film. That is a very good thing in an age when the cost of
medicine needs to be held in check."
Disclosure notice: AuntMinnie.com is a subsidiary of IMV Ltd.
Copyright 2016 AuntMinnie.com
Last Updated np 2/5/2016 5:30:09 PM
Forum Comments
8 comments so far ...

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2/8/2016 8:28:20 AM
ed341c
The immorality of the ACR. Put increased burdens on small rural and poor inner city hospitals
to replace perfectly good CR equipment to enrich Varian. Disgusting.
2/8/2016 9:48:00 AM
TarverForPresident
Agreed. This is a blatant scheme to enrich DR manufacturers by regulatory extortion.
Hopefully, someone posts names of the people in ACR and CMS that made this decision and
cross-references it against any "speaking fees" and the like that they receive from the
manufacturers. Doesn't this technically include anyone who isn't doing DR mammo? If not, it
soon will. More money for Hologic....
2/8/2016 9:14:54 PM
worcester
Also nails the doc in a box non radiologist using crappy old machines.
2/8/2016 10:03:48 PM
Community_radiologist
I bet it was lobbied by the vendors and manufacturers.
2/8/2016 11:50:35 PM
futuremd2004
Yes, just like XR-29. Total scam.

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2/10/2016 12:34 AM