The impact of proposed MPFS regulation on imaging center value

The Centers for Medicare and Medicaid Services (CMS) has released its proposed Medicare Physician Fee Schedule (MPFS) regulation for 2013. Doug Smith, who wrote the chapter on valuing imaging centers in The AHLA/BVR Guide to Healthcare Valuation, shared this analysis from Integrated Medical Partners (in which he is a partner) on the impact on imaging centers:

Under the proposed rule, the 25% Multiple Procedure Payment Reduction (MPPR) for CT, MRI, and ultrasound will be extended to include both the professional component of services rendered to the same patient on the same date by different physicians within the same group practice (same group NPI). New 25% MPPRs are proposed for the technical component of certain cardiovascular and ophthalmology services. We note that the scope of the cardiovascular services includes many frequently performed by radiologists and imaging centers. 

You can read the full text of the proposed rule here.

The proposed rule on the MPFS is one of the key means of assessing future risk in healthcare finance and valuation. It is a critical read for those who wish to be on top of industry trends.

Deconstructing healthcare reform and its impact on key industry value drivers

Now that the Supreme Court has decided the matter of the Patient Protection and Affordable Care Act (PPACA), the key issues and questions about what, exactly, will happen begin to crystallize. There is understandable confusion about the concrete impact of the decision, much of it due to the scale and complexity of the legislation coupled with the predictable politicization of the facts.

Healthcare Value Wire compiled this Top 8 list of key issues for healthcare finance executives and analysts to keep close at hand:

1. Minimum essential benefits. Only minimum essential benefits are covered under PPACA, and many states have yet to define those benefits.

2. Annual and lifetime limits. Under PPACA, health insurance policies may impose annual and lifetime limits on specific covered benefits that are not essential benefits; no annual and lifetime limits may be imposed on essential benefits.

3. Single standards for all health insurance? Since individual and small group policies are more closely regulated, they may be seen as more risky from an actuarial point of view—and may as a result be more expensive with fewer benefits in comparison to large group and self-insured plans.

4. Premium reductions. There is no certainty that PPACA will reduce premiums. Unless someone is an individual policy holder (for whom the merger with the small group market will help), there are no specific insurance cost-control provisions.

5. Ongoing merger mania and premiums. Since PPACA has sparked an almost unprecedented period of provider consolidation, there is a good probability that premiums will increase as providers gain negotiating leverage over insurers.

6. Medicaid payments. PPACA contains a presumption of patient eligibility and allows hospitals to treat anyone believed to be eligible (and get paid). If a patient is subsequently found not to be eligible, the hospital retains the payment from Medicaid and the lack of eligibility is not counted against the state’s Medicaid eligibility performance statistics.

7. Sustainable income limit for federal subsidies through the exchanges. Subsidies are determined on a sliding scale (up to 400% of the federal poverty level) so that individuals at the lower end of the scale get the most help. An individual or family who wants a more expensive or higher-tier plan must pay the difference.

8. Was RomneyCare a success in Massachusetts? Some areas for consideration:

• Some 98% of Massachusetts residents are covered by health insurance.

• Massachusetts is among the states with the highest individual premiums in the nation.

• Benefits in the small-group and individual market are less than those in the large-group and self-insured market, and also more expensive.