January 17, 2017

Medicare Will Likely Cut Imaging Reimbursement in 2014

The recently enacted American Taxpayer Relief Act (Public Law 112-240), also known as the legislation that averted the fiscal cliff, made a seemingly minor change, effective 2014, to the formula Medicare uses to determine reimbursement for imaging services. Section 635 of the Act requires Medicare to use a 90% utilization rate when determining how much to pay providers for these services.  Medicare previously used a 75% utilization rate. The utilization rate is used to determine a portion of the practice expense component of Medicare RVUs. When the utilization rate increases, Medicare assumes that equipment is used more frequently. As a result, the cost per use decreases, since the cost of the equipment is spread across more uses. This results in lower reimbursement.

While the utilization rate change is effective starting in 2014, providers may wish to assess the future of in-office imaging during 2013.

For text of the American Taxpayer Relief Act, please use this link.

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About this Author

William O. Jackson, health care, employment, attorney, von Briesen, law firm

Bill has extensive experience advising health care clients, ranging from individual practitioners to large health systems, in transactional and compliance matters, including contracting, fraud and abuse, and non-profit issues. Bill also works extensively on corporate matters for owner-operated and mid-market companies. His work includes transactions, contracts, terms and conditions, among other matters.

Prior to joining von Briesen & Roper, Bill worked as an Administrative Fellow at a hospital system in western Wisconsin. In this capacity,...