Radiology Fee-for-Service Medicare Reimbursements Declined 25% Since 2005

Radiologist reimbursement for imaging provided to Medicare patients has decreased substantially over 16 years when accounting for inflation, according to a new study by the Harvey L. Neiman Health Policy Institute. The research, published in the Journal of the American College of Radiology, evaluated changes in payments for radiology services for 100% of traditional Medicare beneficiaries between 2005 and 2021. The researchers observed an absolute increase of 4% in payments per beneficiary over this period, but when all payments were adjusted to 2021 dollars, real reimbursement actually declined 25%.

Medicare reimburses clinicians for each service they provide based on the resource intensity of the service, measured as relative value units (RVUs). The RVUs assigned to a service are multiplied by an assigned dollar amount per RVU (the conversion factor) to determine the Medicare payment. “The statutory requirement for budget neutrality requires that RVUs and/or the conversion factor adjust so that Medicare expenditures do not exceed the budget as new services are introduced or as volumes of existing services increase. In other words, budget neutrality is a zero-sum game. Expansions in one area necessitate contractions elsewhere.” stated Eric Christensen, PhD, Research Director at the Neiman Institute. “Our study shows that radiologists are now paid one-quarter less per beneficiary compared with 16-years ago given changes associated with budget neutrality.”

Previous studies have focused on procedure-specific reimbursement and shown declines up to 44% per procedure over 10 years. “Through increased efficiency and/or working more hours, radiologists could theoretically maintain reimbursement per beneficiary despite substantial declines in reimbursement per procedure.” stated Gregory Nicola, MD, Executive Leadership, Hackensack Radiology Group and Chair, ACR Economics Commission. “We found that radiologists were, in fact, doing 13% more work (RVUs) per beneficiary in 2021 than in 2005. If RVUs per beneficiary had remained at 2005 levels, real reimbursement per beneficiary would have declined by 34%. Hence, volume increases partially mitigated reimbursement declines, but despite them, real reimbursement still declined 25%.”

“The conversion factor has been the primary mechanism to maintain budget neutrality and it has declined 43% from 2005 to 2023” stated Joshua Hirsch, MD, Neiman Institute Affiliate Senior Research Fellow and Vice Chair Procedural Services, Massachusetts General Hospital. “It must be acknowledged that such substantial declines are not without consequences for patients as lower relative reimbursement has been associated with reduced access to care for both Medicare and Medicaid patients and economically driven disparities in access to newer medical technology.”