Business of Medicine


Medicare Update - Appropriate Use Criteria For Advanced Diagnostic Imaging Services

By: Hoyt W Torras, MPA, MHA

This summary is based primarily on the Medicare Physician Fee Schedule CY2018, Final Rule – Published in the Federal Register November 15, 2017.

In 2014, Congress enacted legislation designed to promote use of Appropriate Use Criteria (AUC) for Advanced Diagnostic Imaging Services. Implementing this program has proven a more difficult endeavor than was originally anticipated. For this reason, there have been several delays in the program and there are still items that CMS has not finalized.

Stripped to its basics, AUC is a more advanced form of “clinical guidelines.” AUC help clinicians determine what imaging should be performed based upon the individual patient, scientific evidence, risk/benefit of testing, available healthcare resources, etc. Appropriateness criteria is believed to improve outcomes and resource utilization. In some respects, use of appropriateness criteria is simply transferring prior approval (pre-certification) to medical practices. Clearly, the program is designed to address potential inappropriate use of imaging.

To facilitate utilization of appropriateness criteria, CMS is mandating that certain organizations help develop the appropriateness criteria. Further, CMS is certifying electronic Clinical Decision-Support Mechanisms (CDSMs); essentially, systems that ordering physicians can employ to check criteria for appropriate use.

Physicians and other professionals ordering and/or furnishing advanced imaging would be required to report to Medicare whether AUC were consulted before the imaging was ordered. Although it is not settled yet, the reporting mechanism appears to be headed toward use of modifiers or special G-codes that would be submitted on claim forms to indicate the use of appropriateness criteria. There might also be unique identifiers produced by the CDSMs that could be submitted to indicate AUCs were employed prior to ordering the tests.

The impact of this program as envisioned would be extensive as it will apply to every physician, or other practitioner, who orders or furnishes advanced diagnostic imaging services such as MRIs, CT scans, nuclear medicine, positron emission tomography (PET), and other imaging services designated by CMS. It does not apply to X-rays, ultrasound, fluoroscopy, etc. Thus, the program would impact almost every medical specialty that utilizes imaging services including primary care, orthopedics, neurology, etc. There is, however, the potential for “hardship exemptions.” Emergency and inpatient services are also exempted from the AUC program.

Because the program has proven difficult to implement, as of November, 2017, CMS is extending the voluntary reporting period to 18 months starting July 2018 and continuing through CY 2019.

From January 1, 2020, to December 31, 2020, CMS has established an “educational and operations testing period" during which ordering professionals will be required to consult AUC and furnishing providers will report AUC consultation on claim forms. However, CMS will continue to pay claims during this period even if the information is incorrect. This represents a further one-year delay from what CMS proposed just a few months earlier in July, 2017.

CMS also decided to delay finalizing rules for significant hardship exceptions for the AUC program until rulemaking for CY 2019. CMS will also reevaluate the proposals regarding what information must be reported on Medicare claim forms.

Assuming all those details are finalized and the program advances, the AUC program will likely expand over time to additional priority areas from the 8 targeted so far, including coronary artery disease (suspected or diagnosed); suspected pulmonary embolism; headache (traumatic and non-traumatic); hip pain; low back pain; shoulder pain (to include suspected rotator cuff injury); cancer of the lung (primary or metastatic, suspected or diagnosed); and cervical or neck pain. There is a table available on the CMS website that provides preliminary diagnosis codes that describes these clinical priority areas.

As it stands now, physicians who furnish the applicable imaging services would have their claims denied by Medicare unless AUC criteria were used by the ordering physician (or the physician or the service is exempt). CMS indicates that ordering physicians, (those who have not received a hardship exemption), may be required to submit to prior approvals (precertification) before ordering these services. There is also the possibility that providers who implement CDSMs might receive credit under the Merit-based Incentive Payment System (MIPs), however, that decision is still in flux too.

There are many issues that CMS must clarify before these new dates. Assuming no further delays occur, physicians will be required to use AUC by 2021 unless they qualify for a hardship exemption.

It behooves physicians and administrators to follow future announcements regarding the AUC program to ensure your medical group is ready. Medical specialty societies are a good source of up-to-date information. Many of them have been providing input to CMS during the rule-making process.

While some medical groups might decide that this program is not a major concern at this time, there are benefits that some medical practices can seek by being on the cutting edge of appropriateness criteria, especially under value-based reimbursement systems. That is reason enough to follow future developments, even if you decide not to take any action until all aspects are finalized. On the other hand, it may be premature to expend too many resources prior to requirements becoming clearer as we approach July, 2018.

Additional Resources:


Main CMS Appropriate Use Criteria Program webpage.




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The information provided in this resource does not constitute legal, medical or any other professional advice, nor does it establish a standard of care. This resource has been created as an aid to you in your practice. The ultimate decision on how to use the information provided rests solely with you, the PolicyOwner.