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Radiologists Face Health Reform Uncertainty

Joe Cantlupe, for HealthLeaders Media, April 8, 2010

After he examined chest x-rays the other day, radiologist Bibb Allen, MD, mused about what he considers the positives and negatives of healthcare reform.

The positive: more patients. Reform will result in insurance coverage of 32 million more people. "We take all comers–I don't know who has insurance and who doesn't–we just take care of everybody," Allen says.

But the other side to healthcare reform has left radiologists like Allen extremely disappointed, and forecasting, in his words, "difficult and tedious times ahead."

"Certainly it seems that radiologists have been singled out as a physician specialty targeted for reimbursement cuts–it is the beginning of what may be a sizable number of dollars," says Allen, who does much of his work at Trinity Medical Center at Birmingham, AL.

Whether they are singled out or not, as radiologists review the 2,000-plus pages of the healthcare reform legislation, they get more and more uneasy, and I can see why. Overall, Allen, a member of the American College of Radiology's economics commission, estimates $3 billion in Medicare cuts related to radiology over a 10-year period.

Those budget cuts, anticipated to begin next year under the new law, are taken from a formula in reimbursement payments that assumes medical imaging equipment worth more than $1 million, including tomography scan (CT) and MRI machines, will be used 75% of the time during office hours in outpatient centers in 2011.

Currently, payments reflect the assumption that equipment is in use about 62.5% of the time–meaning the new estimates could mean major cutbacks, especially for rural facilities, whose equipment is not in use as much.

"There's no doubt about it–rural facilities don't typically have the volume that some of the urban facilities have," Allen says. "So many are operating on the margin already. Another 25 to 30% reduction will drive them out of business. They won't be hiring new people, new equipment. The whole cycle of having a quality operation is going to be impacted."

The formula is wrapped around the so-called equipment utilization rate assumption. That is the amount of time that scanners are presumed to be used during business hours. The higher the assumption, the lower per scan reimbursement, according to the ACR. The formula is a major factor in Medicare's technical component reimbursement.

There is keen irony for many radiologists because the cuts are reversing the trends over the years, where there was been an attempt to move medical care delivery out of the expensive hospital settings to the lower cost outpatient settings, according to Allen.

Since rural facilities use diagnostic imaging equipment on an average of 48%, funding for those facilities under the new law would essentially dry up, says Shawn Farley, ACR spokesman. Overall, the median usage rates for facilities nationwide is at about 54%, with non-rural facilities having a 56% utilization rate, which would still result in general cutbacks under the healthcare reform measure, he says. The rates were measured under a June 2009 Radiology Business Management Association Equipment Utilization Survey. "In a perfect world, the equipment utilization rate assumption would reflect that actual rate being utilized nationwide," Farley adds. "The RBMA survey placed that number at 54%."

Using 48% compared to 75% mandated under the health reform law is a "big difference," says Farley. "Many of the rural centers cannot absorb that big of a cut and will likely be forced to close. This means patients will be forced to travel farther to receive care and wait in longer lines to receive care," Farley says.

"These freestanding imaging facilities are often the location where women in rural or suburban areas get their mammograms," Farley says. "If these centers close, these women will have to go to a hospital, likely in a larger area, to get their mammograms."

"This means longer waiting periods to get mammograms because more women are seeing the same provider," Farley says. "Even for those centers in rural areas that remain, many freestanding imaging centers rely on reimbursement from MRI, CT, and other advanced imaging to allow them to offer mammography to their patients. These kinds of drastic cuts may leave them unable to continue to offer mammography."

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