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Use or overuse? The reality behind the regulations

Radiology Administrator's Compliance and Reimbursement Insider, November 1, 2006

At the heart of every myth lies the essence of truth. The exponential growth of imaging and its effect on healthcare’s bottom line profoundly affects not only the future of healthcare, but the future of health itself.

For example, a mother can now see her unborn baby in perfect, three-dimensional (3-D) view. A grandfather with no previous history or other indications of heart trouble can see his beating heart and learn of potential risks early enough to counteract them.

Advancing technology makes these scenarios possible. But it’s just one reason for imaging’s rise from a supportive role to a lead character on healthcare’s mythological stage. Patient/consumer demand represents another reason for such growth, Shay Pratt, a senior consultant at The Advisory Board Company in Washington, DC, told an audience during the Radiology Business Management Association’s annual meeting in Miami in June.

Changing protocols in the world of radiology allow for more formalized procedures, which, in turn, create easier processes and better throughput. A greater number of scans become possible because the industry knows how to handle the increased caseload.

Utilization creep has also occurred in recent years, because scans once dubbed “investigational” now have CMS and local coverage determination approval, said Pratt. In essence, more payers accept more diagnosis codes for more scans.

The growth of imaging services has turned it into the “pillar of profitability,” Pratt said. In 2005, hospital outpatient systems across all payers earned $20.9 billion, according to an Advisory Board report.

However, no myth can be free of demons. Cutting-edge technology costs money, and such expansion has instigated increased scrutiny from government and private insurers alike.

A 3-D Doppler ultrasound may be beautiful, but it may not be necessary. The radiologist may find an abnormal tick in that grandfather’s heart, but the cost of such a scan makes its widespread use prohibitive.

Because some see radiology as the proverbial golden fleece, the temptation to offset other practices on the back of imaging’s fine fibers can be great. To balance the benefits of increased imaging use with healthcare’s ever-tightening coffers, payers and governmental agencies have created challenges for referring physicians and radiologists to overcome.

For example, an overview of CMS’ Medicare Physician Fee Schedule (MPFS) proposed rule for 2007 includes the implementation of the following two provisions of the Deficit Reduction Act of 2005 affecting payment for imaging services under the fee schedule:

1. -The first provision addresses payment for certain multiple imaging procedures, with full payment for the first procedure, but a 25% reduction in payment for additional imaging procedures furnished on contiguous body parts during the same session. This is a smaller reduction than had previously been proposed.

2. -The second provision limits the payment amount under the MPFS to the outpatient department payment amount for the technical component of certain imaging services. Under this provision, the physician fee schedule payment amount for furnishing certain imaging procedures would not exceed the amount that is paid to an outpatient department.

Further, imaging practice ownership regulations continue to evolve as the industry evolves. As of January 1, 2007, nuclear imaging will fall within the realm of designated health services and under the purview of the Stark Law. Many hospitals will be forced to untangle their joint venture agreements to keep from getting bitten by government regulations.

Payers have created their own cost-cutting procedures, as well, said Pratt, which is where precertification—and imaging intermediaries—come in. These procedures include the following: