US Government To Decide On Payments To Doctors Who Use Medical Imaging

The U.S. federal government is expected to decide, as soon as Friday, if it will slash payments to physicians who use medical-imaging machines to screen patients for diseases like cancer and heart problems.

The decision will likely stir controversy, because the government has proposed cutting by up to 38% the amount it pays the roughly one million doctors who participate in Medicare when they use disease-screening equipment for procedures like MRIs and CT scans. The move could also have implications for makers of this equipment, including General Electric Co. (GE), Siemens AG (SI) and Eastman Kodak Co. (EK).

The Centers for Medicare and Medicaid Services, or CMS, in July proposed trimming the payments for doctors who use the equipment because of concerns they were being overused and driving up health-care costs. Health-care legislation in Congress would also reduce payments for physicians using the machines, and President Barack Obama has weighed in, saying the equipment is adding to the burgeoning health-care tab.

The proposed rule would affect doctors and health professionals who are paid under the Medicare Physician Fee Schedule and also would result in cutting payments for radiation oncology procedures. A broad coalition of congressmen, doctors and patient-advocacy groups have decried such a move, saying the radiology equipment is necessary to treat patients who already are shown to have cancer.

Analysts expect the payment rates for the radiation oncology procedures to remain unchanged. That would benefit companies such as Varian Medical Systems Inc. (VAR) and Accuray Inc. (ARAY), according to Washington Analysis, a research firm.

Tim Trysla, executive director of the Access to Medical Imaging Coalition, an advocacy group representing physicians and patient groups, said the proposed changes by CMS would be "seismic." The coalition also includes companies that make the screening equipment.

The proposal would increase the assumed rate at which diagnostic machines are used to 90% from 50%. A higher assumed rate results in lower payments.

Trysla, who is also a lawyer with the firm Alston & Byrd, said CMS is basing its assumed rate on old data. He said the use of MRI machines and others has dropped in the last several years.

He said that rather than "across-the-board cuts," the government should focus on getting doctors to follow guidelines for when to use the screening machines.

-By Jared A. Favole, Dow Jones Newswires; 202-862-9207; [e-mail]