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Medical Imaging Reimbursements: The Impact of the Coming Election

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December 31st, 2011, 11:59:50 PM. The glittering ball in Times Square casts a thousand rays of pure white light onto a thousand hopeful faces as it begins its descent.

Ten, nine, eight, seven…          

Ryan Seacrest and his celebrity cohosts redouble the facial tension that spreads their professionally whitened grins from ear to ear.

Six, five, four, three…

Couples draw close for their midnight kiss. Singles pour an extra-tall flute of champagne for their lonely midnight toast.

Two, one! Happy New… Wait a minute! It’s election year, isn’t it? Stop the party! There’s too much to think about. Especially for doctors.

As any doctor, hospital admin, or other imaging equipment owner will tell you, the ups and downs of the medical industry, including the imaging sector, are tied inextricably to the current goings-on in Washington. Any number of medical concerns could find their way onto the congressional docket in a given year, but the perennial favorite is usually medical reimbursement rates. For those among the reimbursed, this issue is all the more pointed during an election year. What they all want to know: Which presidential candidate will most likely raise reimbursement rates? The Republican? The Democrat?

To answer this question, we’ve done some research over the past three administrations to find out the party track records on the matter. The party most likely to cut medical imaging reimbursements is…

Probably Neither!

That’s very anti-climactic, isn’t it? But it’s true. Take a look at the 15-year history for yourself.

The Balanced Budget Act of 1997

This legislation enacted the Medicare Sustainable Growth Rate (MSGR), the figure against which reimbursement rates are weighed annually. If medical spending goes higher than the MGSR in a given year then medical reimbursements will go down for the following year, and vice-versa. This formula has proven dangerous to healthcare providers and resulted in payment cuts that, if left unchecked, would force more and more doctors out of association with Medicare.

In response to the danger posed by MSGR, congress used short-term suspensions and other temporary solutions to float the reimbursement rate along. In short: they punted.

Deficit Reduction Act of 2005, Tax Relief and Healthcare Act/Medicare, Medicaid, and SCHIP Extension Act/MIPPA

During the Bush administration, the industry infamous DRA changed the game significantly. The DRA’s main impact in the Imaging sphere was direct cuts to the technical fees for advanced diagnostics in an outpatient setting. This changed the face of imaging by creating a two-level system in which hospitals and imaging centers began getting paid different amounts for the same work. This change exacerbated the MSGR issues that were already in play. To deal with the overcompensation and cuts made in the DRA, congress made another round of quick MSGR fixes to keep things afloat. 

In 2006, the Tax Relief and Healthcare Act enacted a 0% change in rates for 2007. This was followed by a provision in the Medicare, Medicaid, and SCHIP Extension Act that gave doctors a temporary, 6-month increase of 0.5% from January to June. Finally, congress overrode the presidential veto and passed MIPPA, which offered a 1.1% rate increase for 2009.

Essentially, reimbursement rates flat-lined during these years, peaking occasionally for six to twelve months out of President Bush’s eight years in office.

Medicare and Medicaid Extenders Act/Middle Class Tax Relief and Job Creation Act

The Medicare and Medicaid Extenders Act of 2010 essentially froze MSGR until January 1st, 2012; another punt, deferring permanent solutions yet again. By this point, the habit had firmly established itself across party lines.

This brings us to the latest and greatest congressional punt: The Middle Class Tax Relief and Job Creation Act of 2012. After the MSGR freeze of 2010 expired in January of this year, reimbursement rates were set to take a catastrophic 27.4% cut. In keeping with the precedent begun in the 90’s, section 3003 of this bill has deferred implementation of the MSGR until the end of 2012.

You Know What They Say: History Repeats Itself

The ball has been passed a number of times during the fifteen-year history of the MSGR. Republican and Democrat presidents and, more importantly, Republican and Democrat congresses have both chosen to punt the issue to end of the next campaign or even into the next administration. Neither party has opted to Fix MSGR.

As a result of this precedent of punts, of deferrals, it is highly likely that MSGR will stay with us regardless of who is elected.

Our prediction: December 31st, 2012, 11:59:50. Most of America will count down the final ten seconds of 2012 with ebullience, secure in the knowledge that 2013 will be free of negative campaign ads and pre-recorded phone messages. Those in the medical industry will count down with poise and patience, as they have for the last fifteen years, ready to receive the next punt from the hill, be it kicked by a blue cleat OR a red cleat.