June 30, 2008 / 8:27 PM / in 10 years

Medicare proposes changes for imaging, dialysis

WASHINGTON (Reuters) - The U.S. government proposed payment changes in the Medicare health insurance program on Monday that could impact reimbursement of medical imaging, diagnostic testing and dialysis providers.

The wide-ranging, 834-page proposal is an annual update of how Medicare pays for the treatment of 44 million elderly and disabled individuals in the federal health plan.

Among the changes proposed are an expansion of diagnostic imaging services for which the government will trim payment when multiple procedures are done on the same patient. It also proposes no update to payment for drugs used during dialysis.

“We believe the dialysis industry will object to the sudden change in assumption” on pricing for the drugs, said Ipsita Smolinksi, an analyst at JP Morgan in Washington.

The major dialysis providers are DaVita Inc and Germany’s Fresenius SE. The biggest medical imaging companies are General Electric Co, Philips and Siemens AG.

The U.S. Centers for Medicare and Medicaid Services, which runs Medicare and the Medicaid program for the needy, is expected to spend nearly $800 billion on health care services this year.

The proposal will also likely impact payment for free-standing radiation therapy and pathology lab tests, according to analysts.

The government is also proposing to require doctors who perform diagnostic tests to be subject to certain new performance standards, as well as increasing financial incentives for doctors to report quality measures.

“We are taking a multi-pronged approach to improve how Medicare pays for health care services,” CMS acting administrator Kerry Weems said in a statement.

The proposal was posted on Medicare's website here .pd f.

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