Massive drops in imaging reimbursement signal some private radiology practices ‘may be in jeopardy’
There’s been a colossal downturn in reimbursement for MRI and CT scans at private physician practices, including radiology and other specialties, a trend that could spell doom for some. However, a recent payer policy shift could offer a glimmer of hope.
That’s according to a new analysis of Medicare Part B payment data, published in January’s Journal of the American College of Radiology. After peaking at about $1.1 billion in 2006, independent radiologists’ reimbursement for MRI studies plummeted more than 54% during the following decade. Similarly, Medicare payment for CT dropped 48% during the 10-year period ending in 2016, from a peak of $705.6 million, Thomas Jefferson University Hospital researchers reported.
The downturn mirrors similar decreases in the offices of other private specialists who also deliver MRI and CT—such as cardiologists and orthopedic surgeons—and should give independent practitioners pause when planning for the future.
“These trends suggest the financial viability of private office practice may be in jeopardy,” wrote Sarah Kamel, MD, with the Philadelphia-based school’s Center for Research on Utilization of Imaging Services, and colleagues. “However, certain recent policy changes could promote a resurgence.”
Kamel’s goal in conducting this analysis was to gauge the delivery of imaging at nonradiologist practices in recent years. Previous investigations discovered rapid growth in CT and MRI among such practices, fueled by a loophole in federal regulations. That allowed doctors to self-refer patients for imaging within their own practices in the 1990s and early 2000s, when “reimbursements were lucrative and oversight was lax,” the authors noted.
However, the pendulum appears to have swung the other way since then, driven downward by the Deficit Reduction Act, which reduced fees for imaging exams performed in private offices. Other contributing factors to this slump included reduced payment for providers that perform multiple procedures in a single encounter, along with initiatives that bundle reimbursement for an entire care episode.
During the same decade that started in 2016, nonradiologists experienced a massive dip in imaging reimbursement, Kamel et al. reported. Payment for MRI peaked at about $248 million that year, sliding down to about $102 million in 2016, a 59% downturn. Similarly, payment to nonradiologists for CT hit a highwater mark of $284 million in 2006 before plummeting 67%.
Orthopedic surgeons shared the largest portion of MRI volume among the group, and experienced a 47% decrease in payment from their peak, down to about $49 million in 2016. In CT imaging, cardiologists hold the largest share of reimbursement outside of radiology, experiencing an 82% decline from the peak, down to $10 million in 2016.
“These changes likely accelerated the closure of private offices and the merging of outpatient imaging facilities into hospital outpatient departments,” Kamel noted. However, the team believes their study is proof that such self-referral patterns have dried up among nonradiologists, which they see as an overall positive for the field of medicine.
Recent revisions by insurers such as Anthem and United Healthcare, however, may begin to reverse the trend among independent radiologists. Both payers have started to deny coverage for non-emergency exams performed at hospital outpatient departments, which may push patients back toward freestanding imaging centers, where tests are generally cheaper.
“With this recent policy change, transition of imaging services back to private offices will likely occur in the near future and will be interesting to continue to monitor," the team noted. “It could lead to a resurgence of private office imaging among both radiologists and nonradiologist providers,” the team concluded.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.