The following is a guest post from the American College of Radiology.
by James H. Thrall, M.D.
Health care reform cannot be approached with a “one size fits all” cost-cutting mentality. Reducing costs in the long term often requires an investment in the short term — particularly, in regard to medical imaging.
Medical imaging saves lives. Imaging also saves dollars through earlier disease diagnosis, less invasive medical procedures, shorter hospital stays, and optimized patient treatment. Researchers at Harvard Medical School demonstrated that every $1 spent on inpatient imaging translates to approximately $3 in total savings. But with an urgency to cut costs now, the long-term picture has fallen out of focus.
The Administration recently recommended a radical change to the Medicare reimbursement formula for imaging services. Specifically, it called for increasing the formula’s utilization assumption to 95 percent —even more extreme than Medicare Payment Advisory Commission’s suggested increase to 90 percent.
The utilization assumption is the percentage of a facility’s operating time that the equipment is assumed to be in use and is a key component of the Medicare formula used to calculate reimbursement. If the assumption is dramatically higher than the actual time a facility’s machines are in use, the center will be significantly underpaid for their services.
According to data recently collected by the Radiology Business Management Association, imaging centers in rural areas operate equipment approximately 48 percent of the time their offices are open. Imaging centers in non-rural areas operate equipment approximately 56 percent of office hours.
A 90-95 percent utilization rate for CT and MRI scans would result in an additional 30+ percent reimbursement cut for these modalities, on top of an average 23 percent hit resulting from imaging provisions in the Deficit Reduction Act of 2005 and even more reductions called for in the CMS’ proposed Physician Fee Schedule Rule. With cuts this deep, there will be minimal if any access to advanced imaging in rural America. Even suburban and urban providers may find it hard to continue to offer the same level of service — all leading to longer travel for care and longer wait times.
MedPAC has stated and the Centers for Medicare and Medicaid services agreed that the survey used to justify the Administration’s proposal, based on data from six large urban areas, was not sufficient to drive national reimbursement policy. The recent RBMA data shows why.
Everyone wants to improve health care, but clearly the evidence does not support legislation that would so drastically impact patient access to care.
James H. Thrall is chair of the American College of Radiology (ACR) Board of Chancellors.
