Bull's-eyes come in many different sizes, shapes, and colors. The one at present painted on radiology is about as big and brilliantly red as they get. As such, lawmakers, regulators, and payors need not have the best of aim (which they do not, to hear radiology professionals tell it) when they let arrows fly (which they are); just being sufficiently exercised about the overutilization of imaging is all it takes right now to guarantee plenty of hits on the broad side of this particular barn.

Imaging is in the crosshairs because it is the one physician service that grew the fastest of any between 1999 and 2003, based on figures compiled by the Medicare Payment Advisory Commission (MedPAC) and presented to Congress in March 2005. MedPAC Executive Director Mark Miller explained to members of the House Ways and Means Committee's health panel that Medicare spent $9.3 billion on imaging in 2003, up from $5.7 billion in 1999.

More imaging undeniably is occurring these days, a lot more. However, radiologists are not as busy as this implies. Cherrill Farnsworth, executive director of the nonprofit National Coalition for Quality Diagnostic Imaging Services (NCQDIS), reports that radiologists in 2002 handled volume only 7% greater than they did in 1993. Much greater growth rates have been occurring among nonradiologist physicians: cardiologists alone increased their share of the imaging pie by 141% during that same period, according to data from NCQDIS.

As Miller noted in his testimony before the Subcommittee on Health, a dramatic proliferation of imaging equipment ownership has transpired among nonradiologist physicians in recent years. A 1994 Government Accounting Office report found that providers who own imaging equipment are 54% more likely to order tests than physicians who refer patients to facilities in which they have no financial stake.¹

This growth has not gone unnoticed among private payors seeking to rein in health care costs. One way they intend to go about it is by inserting more checks to ensure that the imaging being done is truly appropriate. That makes sense in light of estimates by Moskowitz² et al indicating as many as half of all imaging studies performed by nonradiologists are unnecessary, says James P. Borgstede, MD, FACR, chairman of the board of chancellors of the American College of Radiologists, Reston, Va, which concurs with that calculus.

MOTHER OF NECESSITY

Borgstede believes overutilization of imaging cannot be blamed solely on the habit (and ability) of cardiologists and other nonradiologist physicians (including orthopedic surgeons and oncologists) to acquire their own MR, CT, and PET systems. To an extent, a driver in all this is a growing recognition among nonradiologist physicians that there is much money to be made by offering in-office imaging, particularly on the technical component of reimbursement. Inappropriate imaging also is the by-product of medical uncertainty, a physician wanting extra studies conducted because he or she does not feel confident to make a diagnosis without them. The medicolegal climate is also partly to blame: physicians are overutilizing to be able to demonstrate in court that they overlooked nothing in the course of attempting to help a patient.

Then there is patient expectation. Word gets around via magazine articles, daytime television shows, the nightly news, and even the grapevine of friends, relatives, and coworkers that there is an imaging test for seemingly every complaint under the sun. "Someone goes to the doctor to have his aching knee looked at, and the first thing the patient asks for is an MR scan just like the one that was performed on his favorite quarterback following a serious injury earlier in the season," says Borgstede, who also is a member of Colorado Springs Radiology Group in Colorado Springs, Colo.

Yet another source of overutilization is lack of supervision. "Some physicians who order unnecessary images wouldn't if they had someone in a position of higher authority to advise them accordingly," says Borgstede.

Many of these drivers of overutilization were acknowledged by Miller in his March appearance on Capitol Hill. But he did not come merely to detail the problem for subcommittee members; he came to offer solutions as well. One was a suggestion that Congress begin the process of reining in overutilization by ordering the Department of Health and Human Services (HHS) to measure resource usage among fee-for-service physicians. This, he testified, could be accomplished with the aid of Medicare claims data. The results could then be shared in a confidential manner with physicians for purposes of educating them about how they compare individually with aggregated peer performance.

A concern voiced by Miller (and echoed by NCQDIS) is that imaging performed in nonradiologist physician offices is not only often inappropriate but also substandard. Thus, he recommended that Congress authorize HHS to set standards for all providers who perform and/or interpret diagnostic imaging services billed to Medicare, and then leave it to select private organizations to administer those standards.

Miller earned approval from radiologists when he advised the House panel to include nuclear medicine under the provisions of the Ethics in Patient Referrals Act—aka the Stark law, named for its chief sponsor, Rep Pete Stark (D-Calif), who is the ranking member on the Health subcommittee. As things currently stand, physicians can refer with abandon to nuclear medicine services they own in full or part without violating the ban on financial self-interest as enunciated by the rules of Stark.

"The proposal to bring nuclear medicine under Stark is long overdue; it's a very welcome development," says Alan D. Kaye, MD, president of Advanced Radiology Consultants in Fairfield County, Connecticut, a for-profit, multicenter practice. "Stark was very effective at discouraging overutilization of imaging services in the segments covered by the law. But not in nuclear medicine. It was a mistake to exclude nuclear medicine in the original Stark legislation. It's a big factor in why we today have the explosion in cardiac nuclear medicine as a self-referred examination."

Congressional staffers intimate with the Stark law explain that nuclear medicine was not originally included on the list of entities to which physicians could not self-refer because at the time—the early 1990s—no one foresaw the ability of cardiologists and others to acquire such technology for themselves. However, Congress may not have to act in order to rectify matters: when Stark was authored, provision was made to allow HHS to broaden at its discretion the list of services covered by the law. Now, HHS's Centers for Medicare and Medicaid Services (CMS), which sets Medicare policy, is contemplating a rules change that would prohibit reimbursement to self-referring owners of nuclear medicine equipment who are not nuclear medicine physicians.

Kaye, also chairman of the department of radiology at Yale University's nonprofit Bridgeport Hospital, insists it is paramount that nuclear medicine be made subject to the prohibition against self-referral by whatever means necessary. The United States health care system, he says, cannot sustain the kind of runaway utilization of imaging that will occur if the nuclear cardiology model is applied to other advanced imaging examinations, such as MR, CT, and PET. "The bank will be broken. In this zero-sum health care financing environment, overspending in one area negatively impacts the funds available to others. Thus, I can foresee an across-the-board downward spiral of reimbursement for all physicians, whether in imaging or not. This would ultimately filter upstream to stifle manufacturer research and development into more advanced technologic innovation." Fewer and fewer providers will be able to afford equipment acquisitions (the manufacturer revenues that in part go to pay for R&D), he explains. "A hospital that is no longer making as much money on imaging is going to be hard-pressed to buy that new 64-slice CT."

Kaye concedes that the boom in cardiac nuclear medicine is helping make equipment manufacturers flush with cash for R&D in the here and now. "But that's only going to last for the short-term," he says. "In the long run, with decreasing reimbursements, the dollars for R&D would be increasingly fewer."

ON THE CHOPPING BLOCK

The MedPAC recommendations were not all favorable to radiology. Described by some as a poison pill, MedPAC recommendations included a call to reduce Medicare reimbursement for contiguous body part imaging 50%.

CMS liked the idea so much that it may implement the cut in the form of physician fee-schedule coding edits as early as January 1.

NCQDIS's Farnsworth spells out the rationale: "Medicare's payment rates are currently based on each diagnostic imaging service being provided independently. Not reflected in these payment rates are many of the efficiencies gained when multiple studies using the same imaging modality are performed in the same session. Thus, reimbursement for clinical labor, supplies, and equipment may be duplicated when no such additional cost was incurred by subsequent imaging procedures.

"CMS maintains that the proposed new coding edits will allow Medicare to benefit from efficiencies gained when images are taken of contiguous body areas in the same session. Since patients and equipment have already been prepared for the second and subsequent procedures, most of the clinical labor activities and supplies are not performed or furnished twice."

(The clinical labor activities not duplicated for subsequent procedures include greeting the patient, positioning and escorting the patient, providing education and obtaining consent, retrieving prior examinations, setting up the IV, and preparing and cleaning the room, Farnsworth stipulates.)

At press time, CMS had not yet announced whether it would go forward as planned with the 50% reduction in reimbursement for contiguous body parts imaging. Word of that decision was due November 1, says Ellen B. Griffith, CMS public affairs officer.

Shortly after disclosing its intentions this past summer to make the rules changes, CMS invited interested parties to share their views about it in writing.

"CMS is required by law to consider and respond to all concerns raised in the comments submitted," says Griffith. "We do take comments seriously and often modify the provisions in the proposed rule based on information provided to us in the comment period."

CMS will not make public the comment letters it received until sometime after the November 1 announcement. However, Decisions in Imaging Economics has obtained copies of a few such correspondences. For example, on September 29, Christie James, radiology billing manager for Massachusetts General Physicians Organization in Boston, wrote the following:

"[We] strongly oppose the proposed discounting of multiple imaging procedures because...CMS has not clearly demonstrated the methodology by which the 50% discounting factor is determined....We strongly urge CMS not to adopt the 50% discounting factor at this point until further study can be completed....Depending on the imaging modality, actual costs for providing the subsequent service vary significantly...and a 50% reduction factor is an over-generalization of imaging services as a whole. A study done by New England MRI Association has shown that cost savings from scheduling/reception, technologists, facility, equipment, supplies, billing and administration activities, when performing a MRI subsequent study, is in the range of 5% to 11%. We believe that further study would confirm our clinical experience that the cost savings generated from areas such as clerical time, technical preparation, supplies, equipment, facilities, billing and other indirect costs do not yield a 50% cost savings."

James tells Imaging Economics that she is surprised at the way CMS is fast-tracking this rule change. "CMS is normally very methodical in the way they value each of their CPT codes," she says. "They take a lot of pains to evaluate each one with a RBRVS/RVU (resource-based relative value scale/relative value unit). They normally gather feedback from all the associations to develop these. But here, for them to say they're going to reduce reimbursement for contiguous body imaging without first giving any value to what the true expenses of the procedures are is very unusual. It's out of character for CMS to do this."

She speculates the motivation for CMS's hasty approach arises from renewed and stronger Congressional pressure in 2005 to hold down the growth of federal entitlement spending. Meanwhile, James predicts that, if CMS green-lights the 50% reduction, most private payors will quickly fall in behind Medicare with identical reductions of their own. But, even if they do not, the Medicare cut alone will significantly impact many providers, of that she is sure. James estimates her own group will lose more than three quarters of a million dollars in revenues during 2006 because of it.

"With losses like that, I'll be forced to lay off some people or close down some facet of operations," she says.

Compounding the effects of the revenue drop is a potential increase in expenses for her group. Specifically, James worries that the 50% reimbursement cut could lead to patient dumping on her not-for-profit practice's doorstep by for-profit groups.

Adding insult to injury, the imaging technology operators least financially harmed by the cuts could well turn out to be the very kinds of practices most responsible for the overutilization that caused this unwelcome development in the first place, nonradiology physician offices, James suspects. For them, imaging is merely an adjunctive; the financial incentives and rewards of self-referral will in their circumstance remain largely intact, she says.

BAD IDEA, GOOD ALTERNATIVES

Hospital radiology departments and independent imaging centers alike will be affected by the 50% reimbursement cut, although Kaye believes hospitals will not feel it quite as rapidly as the freestanding operations due to other sources of income outside of radiology to cushion the blow.

Regardless of when the fiscal pain manifests, the 50% reduction in reimbursement is a patently misguided idea as far as Kaye is concerned.

"The figure of 50% was probably not a scientifically derived number," he says. "With CT, there's clearly some economy of scale when you do multiple examinations. But what they did not take into account was the increased amount of work that's done with regard to producing a CT scan. The cost of the equipment is higher, and the complexity of the protocols is higher. For example, when we do a CT of the abdomen and pelvis for a hematuria, it's a multi-phase exam, but the RVUs for the original CT examination were calculated on the basis of a single acquisition.

"As to MR, I can see no justification for cutting the reimbursement on that at all. Unlike CT, which is often a continuous scanning process, each MR examination needs to be done differently. For example, a chest and an abdomen are completely different sequences, amounting to completely separate examinations for each. Therefore, the contiguity of the chest and the abdomen is immaterial. It's the same as if you were imaging the chest and a knee. Same with ultrasound. There are very minimal economies in doing two body parts."

Naturally, alternative solutions abound. The NCQDIS, for example, has floated the idea of a dual-phase approach that starts with a redefining of Medicare coverage for complex diagnostic imaging. As envisioned, CMS in Phase I would institute standards for education and quality, which providers would have to meet to qualify for Medicare payment of complex diagnostic imaging services, including MRI, CT, and PET.

"The standards would cover staff qualifications and quality monitoring procedures; image quality; equipment maintenance, inspections, and safety; and quality procedures and record-keeping for nonradiologists analogous to radiologists," says Farnsworth. "This phase would be capped by CMS updating its billing systems to more accurately reflect changes in technology."

Phase II of the NCQDIS proposal would chiefly entail expansion of the Phase I-initiated quality standards. Says Farnsworth via e-mail, "CMS should have the authority to implement quality standards on additional diagnostic imaging services, through a demonstration program to be implemented 1 year from the date of enactment of the final rule establishing quality standards for complex diagnostic imaging services. This policy should detail educational and quality requirements for all other imaging tests covered by Medicare."

NCQDIS estimates conservatively that Phase I of its suggested alternative would save Medicare at least $411 million over 5 years and $1.6 billion over 10 years, with additional unspecified savings accruing from Phase II.

Of course, it is only a suggestion. What Borgstede fears is that Medicare (and the private payors marching in lockstep) will not care about solutions offered by the profession and will instead decide the best way to go is with across-the-board cuts.

"And that's what these cuts in reimbursement for contiguous body parts imaging amount to," he says. "Rather than looking at where the problem really lie—sie, people doing in-office imaging for financial gain—they're addressing all scanning as being equally to blame and lumping radiologists in with nonradiologists."

Worse, if the cuts are perceived as effective, they will beget more and deeper cuts in other areas touching upon radiology, Borgstede believes.

"That's why it's so important that radiologists and the ACR be participants in this process, be contributors to the shaping of whatever solutions emerge," he says. "We can't sit back and expect the status quo to be preserved."

With imaging in the crosshairs, it is no wonder the ACR and other organizations representing radiology have opened branch offices in the District of Columbia. These, say Borgstede, serve as staging areas for direct and almost daily interaction with lawmakers and policy wonks on Capitol Hill and with decision-makers in the executive branch.

"The ACR alone represents 33,000 individuals, and we think the way to best represent their interests is to be as close as possible to the place where legislation and rules are made," he says. "The ACR is headquartered in Reston, Va, a city within proximity to Washington, but still it's a long, time-consuming drive from here to there. By having an office in downtown DC, our staff can accomplish more work and have more opportunities for in-person contact with decision-makers."

Meanwhile, rank-and-file radiologists have a part to play in all this, says Borgstede, pointing to the example of a recently concluded grassroots call-in campaign to members of Congress. "We were very successful in articulating to lawmakers our concerns," he insists. "Through this and other initiatives in which our members participated, we've made many members of Congress aware of the need to address the problem of imaging overutilization appropriately, without making radiology such a big target."

Rich Smith is a contributing writer for Decisions in Imaging Economics.

References:

1. Referrals to Physician-Owned Imaging Facilities Warrant HCFAs Scrutiny. Report to the Chairman, Subcommittee on Health, Committee on Ways and Means, House of Representatives. GAO/HEHS-95-2. October 1994.
2. Moskowitz H, Sunshine J, Grossman D, Adams L, Gelinas L. The effect of imaging guidelines on the number and quality of outpatient radiographic examinations. AJR Am J Roentgenol. 2000;175:9-15.