Optimizing the site at which radiology providers deliver advanced imaging services can help boost profit margins while also amassing thousands more in collections, according to a new study published Monday.
Previous analyses have estimated that CMS denies 3% of all fee-for-service Medicare claims, with some $11 billion in payments challenged each year across all payer types. Given varying payment and denial rates across different facility types, it is crucial that imaging specialists make sure they’re delivering CT and MRI exams in the proper venue, experts detailed in Current Problems in Diagnostic Radiology.
Lead author Brian P. Triana, MD, MBA, and colleagues developed a simulation program to gauge the financial impact on a large health system, if such exams were delivered in the ideal setting. An organization could add an additional $87,532 (or an improved margin of 4%) annually on one MRI scanner, boosting collections to $3.51 million, when properly performing exams at a hospital outpatient department or free-standing office. The dollar figure would be even bigger for CT, adding 8%, or over $260,000, and increasing annual collections to $2.6 million total.
“Given CMS payment and denial rate variability, optimally allocating imaging studies between sites of service may improve reimbursement for the same services delivered,” Triana, with the Duke University Medical Center department of radiology, and co-authors wrote Aug. 28. “Although financial incentives exist for site allocation, such decisions should require physician input to assess safety and appropriate level of care.”
For the study, researchers obtained CPT codes for common cross-sectional imaging exams via the 2022 Medicare Physician Fee Schedule. Historical volume figures and denial rates were used to create a simulation program, which calculated reimbursement of a paired outpatient department and free-standing office. Triana et al. estimated how much a hospital stood to earn if MR and CT were delivered randomly between these two options or strategically to maximize collections while minimizing payment rejections.
Denial rates ranged from 3.7% for CT of the abdomen/pelvis with contrast at a hospital outpatient department to 12.5% for thoracic spine MRI at a freestanding site. Payments were turned down at a higher rate for MRI compared to CT and at freestanding centers over outpatient departments, the study found. Meanwhile, expected financial losses for CT due to denials ranged from $6.48 (5.9% of reimbursement) for computed tomography of the chest without contrast to $23.87 (7.9%) for angiography of the head. On the low side for MR, expected losses were $9.99 (or 6.4%) for imaging of the cervical spine without contrast, and, on the high side, $55.78 (12.5%) for thoracic spine imaging with and without contrast. Expected reimbursement was higher at hospital outpatient departments for all exams, except for CTA of the head or neck.
Beginning to implement some of these findings in a real-world setting may require collaborations across healthcare silos, the authors emphasized.
“Competing incentives for financial performance of different sites, each potentially with different leadership, may lead to conflict within organizations unless there is transparency of organizational goals and financial performance across service lines and sites,” the analysis noted.
Read much more from the Neiman Health Policy Institute-supported study at the link below.
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.