Physician Fee Schedule: Appropriate Use Criteria for Imaging

In July 2022, CMS proposed its 2023 Physician Fee Schedule (PFS) and asked for stakeholder feedback on the Appropriate Use Criteria (AUC) provisions of the Medicare PFS proposed rule by September 6, 2022.

Why it matters: In general, the PFS proposed rule determines how Medicare will compensate Medicare-participating physicians in the coming year (there will be a slight reduction of rates because a temporary, pandemic-related reimbursement boost is expiring).

Policy changes: The annual rule also includes multiple policy changes that vary depending on the issues of the day – and this time it includes a rollback of the financial penalty for ordering too many x-rays for Medicare patients.

Context: After several years of testing, in 2021, CMS proposed an AUC program (under orders from Congress via the Protecting Access to Medicare Act of 2014). The AUC program is designed to reduce the number of inappropriate advanced diagnostic imaging services that are ordered for Medicare beneficiaries. The program requires clinicians who order direct imaging services to consult the applicable AUC by using CMS-qualified clinical decision support tools – an electronic portal. Clinicians only get paid if the claim form includes proof that the ordering provider used the AUC consultation process.

Controversy: The program was so controversial that in its final rule issued in November 2021, CMS delayed the effective date for the penalty phase of the AUC program until after the end of the COVID-19 PHE or January 1, 2023, whichever came later. Now, CMS is proposing to delay it indefinitely. On the AUC program page of the CMS website, it says:

The payment penalty phase will not begin January 1, 2023, even if the PHE for COVID-19 ends in 2022. Until further notice, the educational and operations testing period will continue. CMS is unable to forecast when the payment penalty phase will begin.

A non-issue . . . for now: Several medical professional trade associations have lobbied against the AUC program, saying it is overly prescriptive, takes away from professional discretion to order clinically-appropriate imaging, and is an unnecessary burden and cost to physicians. Considering the lobbying efforts at play here as well as the indefinite delay of federal penalties associated with the new regulations, it’s safe to assume that this policy change will not be an issue for a while.

Julie Barnes JD is the Founder and Principal of Maverick Health Policy. A former policy analyst, healthcare attorney, and Capitol Hill staffer, Ms. Barnes has more than two decades of experience helping the private sector navigate federal government activities that influences medicine.