In the next two years, already-inundated radiology administrators will face an onslaught of new regulatory challenges.
There was a time when radiology administrators had to worry about regulatory issues and changes only once a year. It was called the Current Procedural Terminology Manual update, which we ordered and received each October in time to make all of the changes to our charge description master for January 1. We were finished until the following October and could then focus on the operations of the department.
Today, regulatory changes occur all year long, and—in addition to the incredible amount of work required to manage the department, imaging center or practice—it is almost impossible to keep abreast of them. Most administrators are not prepared for all of the changes coming in the next 2 years.
It is not unusual to hear people say they won’t worry about these changes until they are sure the regulations will go into effect, a case in point being the ICD-10 delays. Waiting until the last hour hoping for a repeal or extension is probably not the best strategy. While most of the regulatory changes discussed here speak to the Medicare program, we all know that where Medicare goes, other payors follow.
Cost yin and yang
Since the adoption of the Deficit Reduction Act of 2005, regulatory changes have drastically increased the costs of delivering imaging services. Reductions in reimbursement and increases in paperwork and oversight required to meet regulatory mandates are challenging administrators to keep abreast.
The only way to compensate for reduced reimbursement and increased costs was through an increase in volume, which could theoretically lower the cost per study if all else was equal. Of course, in these times of change, the status quo is a moving target.
The downward pressure on price is unlikely to disappear, and the “2013 Comparative Price Report” 1 from the International Federation of Health Plans tells part of the story. The average price of a CT/abdomen scan ( Figure 1) ranges from $94 in Spain to $864 in the United States. The average price of an MRI study ( Figure 2) ranges from $135 in Switzerland to $1,145 in the United States.
The other side of the story is that prices in the outpatient setting have been reduced so significantly that the ability of freestanding outpatient imaging centers to survive on the Medicare Physician Fee Service (MPFS) technical component is beginning to have repercussions in the marketplace. An analysis of multiple regulatory and legislative actions by radiologist Rodney Owen, MD, FACR, co-vice president of Southwest Diagnostic Imaging, Ltd., Scottsdale, Ariz., found that payments for 2014 global charges for services performed at the practice’s outpatient centers were just 65.9% of 2004 payments ( Figure 3).
Michael Mabry, executive director of the Radiology Business Management Association (RBMA), recently shared two sobering statistics from a survey of RBMA members that operate imaging centers. A total of 24% of respondents reported a net loss of imaging providers in their markets, and 21% were looking to sell and/or close imaging centers. 2
The Advisory Board reported a similar decline in their Health Care Industry Trends 2015 presentation. It cites data published in Radiology Business Journal showing the first decline in the total number of imaging centers (outside a recession-linked correction in 2009) in the United States after nine years of growth ( Figure 4).
Clinical decision support
The implementation of clinical decision support (CDS), which goes into effect January 1, 2017, will have the largest impact on imaging since the Deficit Reduction Act (DRA). The mandate was included in the federal statute known as Protecting Access to Medicare Act (PAMA) Promoting Evidence-Based Care.
It establishes a required process for clinicians who order advanced imaging services in physician offices, hospital outpatient departments and ambulatory surgical centers to consult appropriate use criteria (AUS) for certain outpatient advanced imaging services. Those services are defined as CT, MRI, nuclear medicine and PET studies performed on Medicare outpatients.
CMS conducted a two-year demonstration project to determine the efficacy of using CDS for these advanced imaging studies. In those studies, utilization of advanced outpatient imaging procedures for Medicare beneficiaries was reduced 20-30% on average.
That reduction on top of all of the other imaging revenue