Local, State, Federal

The Bill Box
SNM Voices Opposition to Several CHAMP Act Provisions

The Bill Box

By Cat Vasko

Fervor Over SCHIP Legislation

New State Children’s Health Insurance Program (SCHIP) legislation, passed by the House August 1, continues to ruffle feathers in the medical community. The legislation would cut reimbursement for certain imaging services by up to 41% by 2017, and would also ban future development of physician-owned hospitals and expansion of current facilities. Some see physician-owned hospital arrangements as a violation of Stark anti-self-referral statutes.

If the SCHIP legislation were enacted, the exception that allows physicians to have an ownership or investment interest in a hospital—known as the “whole hospital exception” because it requires that the physician’s interest be the whole hospital, not merely one department—would be mitigated by a requirement that the hospital have a Medicare provider agreement as of July 24, 2007. Therefore, any hospital not currently enrolled in Medicare could not qualify for the exception.

The legislation would also require that existing facilities not increase the number of operating rooms or beds at any time after the date of enactment. Theoretically, however, physician-owned hospitals with provider agreements could expand other services, including imaging. The bill would limit the amount of investment interest in the hospital that can be owned by physicians to no more than 40%, and limit each physician’s individual interest to no more than 2%.

Finally, the legislation would require physician-owned hospitals to make ownership-related reports to CMS and disclose ownership interests to patients. It is important to note that these new regulations would not merely affect so-called “specialty hospitals,” but all hospitals with physician ownership, including general acute care hospitals.

WVa Considers Changes to Scanner Restrictions; Hospitals Protest

The West Virginia Health Care Authority (HCA) is considering a plan to allow physician groups to own and operate CT imaging devices costing no more than $300,000, sparking a turf controversy between hospitals and group practices. Two hospitals have already written to the HCA to protest the measure; they say that imaging services provide revenue that subsidizes other, less profitable services, and that if they lose some of their profits from imaging, their overall rates will climb.

Group practices, on the other hand, make the argument that access to imaging services for patients in rural areas could be improved.

Sonja Chambers, chairwoman of the HCA, notes that the organization is attempting to establish a policy that will allow physicians with large enough practices to be able to offer imaging services while not increasing health care costs. “Insurers are already concerned about the number of scans in the state and the overall costs,” she told the Huntington Herald-Dispatch. “Our job is to strike a balance between access, cost, and quality. It’s a difficult issue.”

A decision was expected by the end of September.

Minnesota Requiring Interoperable EMR for All Residents by 2015

New Minnesota legislation proposed by Gov Tim Pawlenty would require e-prescribing, paperless health plan claims, and eventually an interoperable EMR for every resident of the state. By January 15, 2009, health care providers would be unable to submit any claims on paper, and eligibility checks would be performed online as well; all in-state pharmacies would have to be equipped to accept e-prescriptions by 2009; and by 2015, every resident should be included in the statewide EMR system.

The state legislature has set aside $14 million to assist small, rural health care providers with establishing EMR systems. The legislation as a whole is expected to save the state $5 million a year, both from increased efficiency and from managing patients’ access to medications.

“We are using our leverage as purchasers of health care to drive the market,” Patricia Anderson, Minnesota state employee relations commissioner, told the State Alliance for eHealth.

SNM Voices Opposition to Several CHAMP Act Provisions

Alexander J. McEwan

The Society of Nuclear Medicine (SNM) signed a letter to House Speaker Nancy Pelosi last month, urging that access to vital medical imaging needs to be protected. The letter opposes certain provisions of Section 309 of the Children’s Health and Medicare Protection (CHAMP) Act, which was passed by the House on August 1.

The CHAMP Act reauthorizes the State Children’s Health Insurance Program and provides health insurance coverage to millions of uninsured children. The letter, from members of the Access to Medical Imaging Coalition (AMIC), registers opposition to particular provisions of Section 309, which direct the Centers for Medicare and Medicaid Services to cut imaging reimbursement.

“Access to medical imaging is already in jeopardy,” said SNM president Alexander J. McEwan. “While the bill covers a host of significant health care areas and public policy concerns—and should be a top priority for Congress—SNM is concerned about the proposed cuts to medical imaging.” McEwan speaks for more than 16,000 members of the world’s largest society for molecular imaging and nuclear medicine professionals.

According to Peter S. Conti, “The letter also indicates that additional CHAMP Act proposed cuts would have a harsh impact on underserved populations who have little or no insurance or cannot afford to pay out of pocket for imaging services.” Conti serves as the chair of the Society’s Government Relations Committee.

SNM contends that the cuts to imaging reimbursement are based on flawed data. The Society also said this has been acknowledged by both CMS and the Medicare Payment Advisory Commission (MedPAC). Section 309 directs CMS to increase its assumption on the amount of time imaging equipment is used from 50% to 70%, according to Gary Dillehay, chair of SNM’s Coding and Reimbursement Committee. “The higher the utilization rate, the lower the unit of service costs will be,” said Dillehay. “This is an integral component used in Medicare rate setting for imaging and will reduce payments.”

Dillehay added that the bill also eliminates the scheduled 10% cut to the Medicare physician fee schedule and replaces it with modest (0.5%) annual sustainable growth rate (SGR) updates for 2 years.

Earlier this year, the AMIC released a study by The Moran Company showing that—as a result of the Deficit Reduction Act of 2005 (DRA)—total reimbursement for imaging services in physician’s offices and imaging centers will fall some 18% to 19% below total reimbursement for similar services provided in hospital outpatient departments. The report serves as further proof that issues such as patient access and patient care must be assessed before further implementation of the cuts.

—Nikos Valance