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Money on the Line

April 22, 2010
by Mark Hagland
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How will ongoing reimbursement changes to radiologists affect the imaging world? Expect more outpatient imaging centers to fold or be taken over by hospitals, for one thing

While leaders in the healthcare industry have naturally been trying to keep abreast of the twists and turns in the legislative process around comprehensive healthcare reform, which was passed in the U.S. Congress in late March, members of one medical specialty in particular had reasons to be more deeply concerned about some far less-publicized, yet very pertinent, current reimbursement developments.

In fact, say members of the radiology community, the minor postponement of reimbursement changes already in the works for radiologists that came out of healthcare reform will only delay inevitable payment pain for radiologists.

As of press time, here are the latest developments:

At press time, the U.S. Congress was set to continue to extend Medicare physician payment patches that have become a chronic issue for physicians. In late March, prior to the passage of comprehensive healthcare reform legislation, the U.S. Senate extended the most recent payment patch related to the sustainable growth rate (SGR) through October 1, though at press time, the House had still not acted on that patch. In any case, say industry observers, the 21.2-percent payment cut to physicians that has until now been continually delayed through such patch legislation, will eventually need to be addressed in some long-term fashion. At press time, it appeared that a bill extending the 2009 payment rate deadline until September 30 would be considered once Congress returned from its two-week spring break of late March and early April.

At the same time, particularly worrisome to radiologists is the current situation surrounding the federal Physician Practice Information Survey (PPIS), whose data is being used to calculate practice costs and expenses, and whose formula is expected to affect radiology among the most negatively of specialties (along with cardiology, gastroenterology, and urology), as its changes are phased in over the next five years. According to Pamela Kassing, senior director of health economics and policy at the Reston, Va.-based American College of Radiology (ACR), “We're looking for payments for CT and MR procedures to take a hit of 33 to 48 percent because of this survey,” referring to reimbursement for computed tomography and magnetic resonance imaging. “Overall,” Kassing says, “that will mean a 16-percent pay cut to radiologists over the next several years,” she says, on top of whatever the ultimate result of changes to the SGR are for radiologists.

Going back to the healthcare reform legislation passed in late March, that legislation is at least modifying what was set to be a devastating radiologist reimbursement hit: the equipment utilization rate assumption had been set to rise from the current 62.5 percent to 90 percent under the PPIS; but the healthcare reform legislation has changed that rate to 75 percent, for equipment costing more than $1 million (meaning CT and MR). ACR lobbyists helped influence that change in Congress. Had that change not been effected via the healthcare reform legislation, that rate would have risen to 90 percent by 2013.

Taking all these reimbursement changes and potential changes together, the ACR's Kassing says, “We feel that radiology is being unfairly targeted for cuts that are being shifted to the rest of medicine. And we think that some of those cuts are unfair. And we'd like whatever we're paid to be based on solid data,” she says, referring to the PPIS, “and we're working on that.”

As to the longer-term impact of all these reimbursement changes on the imaging world, what's most likely, Kassing says, is that the current trend of closures of outpatient diagnostic imaging centers is very likely to accelerate. “Some of those centers will close, and others will be taken over by the hospitals. And if hospitals do end up taking over some of those outpatient centers, they will end up having to address intensified IT needs on the part of the radiologists working in those centers.”

Given such trends, hospital and health system CIOs should keep closely abreast of developments taking place in their local markets around the success or failure of existing outpatient diagnostic imaging centers. The potential for more of these to become urgently vulnerable can be expected to increase, while the most logical entities to which the radiologists running them might turn will be area hospitals.

Next month: CIOs move to anticipate and respond to reimbursement-related changes for radiologists.

Healthcare Informatics 2010 May;27(5):34

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