Knowledge Base Article

Q:

I understand that beginning January 1, 2017, Medicare requires a FX modifier be reported on x-rays taken using film so they can reduce the payment amount. We actually do not use film for our x-rays. For our imaging equipment that is not digital we convert the images to a digital format that is uploaded to our PACS. If we are converting our images to digital, does the FX modifier reporting requirement and payment reduction apply to us?

A:

The short answer is no. The process you describe is computed radiography. Computed radiography (CR) uses very similar equipment to conventional radiography except that in place of a film to create the image, an imaging plate (IP) made of photostimulable phosphor is used. The imaging plate is run through a special laser scanner, or CR reader, that reads and digitizes the image. The digital image can then be viewed and enhanced using software that has functions very similar to other conventional digital image-processing software, such as contrast, brightness, filtration and zoom. (Wikipedia definition)However, beginning in 2018 Medicare will make payment reductions for computed radiography (CR) services also. Payment reductions for both film x-rays and computed radiography are from a provision in the Consolidated Appropriations Act of 2016, which was enacted into law in December 2015. The purpose of this provision of the Act is to encourage U.S. healthcare providers to adopt digital radiography (DR) which improves workflow and efficiency as well as delivering lower radiation doses. From a financial standpoint, DR lowers the cost per procedure by allowing for higher throughput.

Effective January 1, 2017, the required reporting of the FX modifier for film x-rays will cause Medicare to reduce the payment amount for the x-ray by 20%. Starting in 2018, payments for imaging studies performed on CR equipment will be reduced by 7% for the next five years (2018-2022), and 10% after that. Medicare will announce the reporting requirements for x-rays using CR equipment, such as reporting a modifier, prior to the 2018 effective date.

Comments from the industry indicate the impact for film x-rays will be minimal because there are very few hospitals that still use film-based systems. Many more CR systems are in use so this payment reduction is likely to affect a lot more hospitals. Before next year, hospitals that use CR equipment will have to decide whether it is more financially beneficial to update their CR systems to digital or accept the reduced payments.