Quo Vadis/ Whither Goest Thou?
It is no easy task to hit a moving target, so the seven speakers who presented the refresher course, “How Payment Policy Will Impact Technology Development in the 21st Century,” on November 30, 2010, at the annual meeting of the RSNA in Chicago, Illinois, diligently colored in the background of the canvas, offering insight into the anatomy of a CPT® code, a review of the successful campaign to get a code for CT angiography, and a postmortem on the recent attempt to get CT colonography reimbursement from Medicare. When the talk turned to delivery models, Christopher G. Ullrich, MD, chair of the ACR utilization management committee and a neuroradiologist with Charlotte Radiology in North Carolina, had some real-world observations and thoughts on one of health-care reform’s key abstractions: accountable care organizations (ACOs). He subtitled his talk, “Quo Vadis.” Ullrich observes that all current CMS demonstration projects are using fee-for-service payment and relying on resource-utilization management to reduce costs. Payors are currently bearing the cost of radiology benefit management (RBM) programs (and ignoring providers’ compliance costs), he adds. The programs serving as poster-child models of health-care reform—such as those at Geisinger Health System (Danville, Pennsylvania); Mayo Clinic (Rochester, Minnesota); and Marshfield Clinic in Wisconsin—are based on current levels of reimbursement and would be unsustainable at, for instance, 30% less than Medicare payment levels, as recently threatened. Because they are typically the largest employer in most communities, Ullrich says, hospitals possess unequaled political clout in the health-care sector, as witnessed by a 3% to 4% pay increase since 2000, compared with physicians’ net loss. “Continually paying less is not, in fact, a sustainable strategy,” Ullrich states. “Better methods of practice, efficiency, rightsizing, and a variety of other strategies are the only real ways to move forward in taking care of our patients.” With radiology accounting for roughly 7% of health-care costs, the successful management of the utilization of radiology will be a requirement of any successful ACO. Drug costs, physician referral, and emergency-department utilization, however, are much higher on the priority list, Ullrich notes, even as radiology finances the change.Making it up as we go High levels of uncertainty prevail as health-care providers attempt to prepare for a rule that remains largely unwritten by the DHHS secretary. Ullrich identifies three scenarios for reimbursement that are being floated. One is hospital ACO payments, per beneficiary, per month—essentially, capitated care, which most organizations have demonstrated that they do not know how to manage. They probably would suffer, should that be the path. A second model is bundled payment for episodes of care, and the question is how radiology’s portion will be calculated. Currently, it’s fee-for-service payment with a portion withheld; if savings are substantial, radiology gets a share of the savings. “There are very few models, but this looks a lot like an HMO of 1998 to me,” Ullrich says. “I watched multiple multispecialty clinics go broke with this arrangement, trying to make it work.” In a third model, the ACO negotiates fee-for-service reimbursement with a payor. This is a scenario in which radiology will be challenged to protect its relative share. “If the RBM isn’t used (perhaps that’s a factor), this is essentially what we do now: direct negotiations,” Ullrich notes. “Because there are no working models, radiology could possibly be in the forefront of creating the model.” Ullrich urges radiologists to stay abreast of the demonstration projects sponsored by the Center for Medicare and Medicaid Innovation (CMMI), which made its first eight awards at the end of November 2010, rather than speculating on which models (most of which are currently in practice) will be used to deliver accountable care.Survival ModesWhether an ACO is managed by a hospital or by a physician network is less important than this question, Ullrich says: “How will we survive in this brave new world? We can become more productive, participate in capitation or risk sharing, provide value-based services or management of utilization within an ACO, or become a hospital or clinic employee.” Ullrich is pleased to report that about 70% of the audience prefers the ACO option. Medical homes are one of the ACO models being discussed to manage chronic disease, and Ullrich describes a project in North Carolina—and how radiology might prosper within this model. “Patients in a medical home are best cared for in an environment where they are consistently engaged by an adequately funded and well-organized and supported primary-care provider system,” he says. “The biggest economic impact is in chronic-disease management—for diabetes, congestive heart failure, chronic obstructive pulmonary disease, and other chronic diseases—and in the reduction of the use of emergency-department visits and other specialist referrals. Although you and I don’t think of this often, radiologists are the most frequently consulted specialists in all of medicine. We outweigh any other specialty by magnitudes of utilization, and we touch every portion of the patient-care system,” Ullrich notes. Community Care of North Carolina (CCNC) in Raleigh has been operating for more than 10 years, Ullrich says, and currently consists of 15 nonprofit networks, operating in all 100 counties of North Carolina, from the poorest to the most prosperous. It involves 4,500 primary-care physicians in 1,350 homes, or provider sites. Designed as a Medicaid public–private partnership, it functions with local medical-management committees, safety-net agencies, and local hospitals to care for more than a million Medicaid beneficiaries. Under a primary-care model, CCNC pays a per-member, per-month fee to the physician and the network, and a shared-savings payment (based on benchmark costs) is given to physicians and networks able to keep utilization below the benchmark. If the spending goal is exceeded, no additional payment occurs, but Ullrich points out that North Carolina Medicaid, not the provider, holds the basic risk. “The physician and hospital participants are not insurers,” he says. “If they miss the goal, they do not get the golden carrot, but they don’t write a check out to Medicaid either. It is a quality, system-oriented effort that is invested in local communities and jobs. We are not shipping jobs to administrators in Nashville, Tennessee.” Ullrich reports that over five years, CCNC saved North Carolina $950 million, compared with an unmanaged Medicaid population in the state, while the primary-care network has actually been paid more, on average, than Medicaid rates. Radiology is paid on a fee-for-service basis, for Medicaid patients, at 86% of Medicare payment levels; primary-care physicians are paid at 95% of Medicare levels in North Carolina. There is no question in Ullrich’s mind that health care’s fiscal outlays are unsustainable. North Carolina has a $3.6 billion budget deficit for 2011 and a $19 billion total budget, so nothing, including Medicaid rates, is sacred. During the past budget cycle, the state engaged an RBM, MedSolutions (Nashville), in return for a fixed budget for imaging and an estimated $100 million budget savings. An unintended consequence of that deal was that health-care providers in the state of North Carolina lost $400 million in reimbursement, or $3 in federal matching funds for every dollar that the state cut. “If you do not spend the money at the state level, the manna from Washington does not arrive,” Ullrich says. In addition, the RBM raised providers’ compliance costs, increased denials, decreased procedural volumes, and diverted funds from local providers. IDTFs also are prohibited by the North Carolina Medicaid program from providing most Medicaid services, so the policy drove most of the patients into the more costly hospital setting. “This is an unsustainable provider business model for radiology, over the long term,” he believes. The medical-home approach based on primary care and embodied by CCNC, on the other hand, controlled costs by raising quality, not by lowering payments. “It is a viable business model for local care for the entire community, while it manages your Medicaid population,” Ullrich says. “It already qualifies as an ACO. It received one of the first CMMI grants for a seven-county project in Western North Carolina that will combine Medicare, Medicaid, and Blue Cross Blue Shield patients. This project enrolls 5,000 patients in that model for a three-year demonstration.” Ullrich concludes with an urgent call for all members of the radiology community to be engaged and to participate in the health-reform discussion in the local and organizational arenas. “The last thought I want to leave you with is this,” Ullrich says. “If you are not seated at the table, you will be on the menu.”
Cheryl Proval,

Vice President, Executive Editor, Radiology Business

Cheryl began her career in journalism when Wite-Out was a relatively new technology. During the past 16 years, she has covered radiology and followed developments in healthcare policy. She holds a BA in History from the University of Delaware and likes nothing better than a good story, well told.

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