Payment cuts drive MRI to hospital outpatient setting

2014 11 05 11 46 21 242 Levin David 2014 175 20141120212747

The number of MRI scans performed in hospital outpatient imaging departments has surpassed the amount performed in private offices. The change is due in part to reimbursement cuts that have made private-office MRI considerably less economically viable, according to a study published online November 15 in the Journal of the American College of Radiology.

The trend toward increased use of MRI in hospital outpatient departments is bad news financially for the U.S. Centers for Medicare and Medicaid Services (CMS) as well as for third-party payors, which have to dole out more money because reimbursement to hospitals for advanced imaging procedures is still higher than payments to private offices.

Dr. David C. Levin from Thomas Jefferson University.Dr. David C. Levin from Thomas Jefferson University.

The researchers from Thomas Jefferson University Hospital speculated that this shift toward the hospital outpatient setting might result in the closure of some private-office MRI facilities, though currently there are no definitive data to confirm that supposition.

"Closure of office facilities is unfavorable for patients, who then have less access to outpatient MRI and might be forced to go to [hospitals] where they could be liable for higher deductibles, co-insurance, or co-payments," the authors wrote. "Any savings to Medicare from reducing payments to providers would be partially offset by the higher costs of [hospital]-based examinations" (JACR, November 15, 2014).

Economic imbalance

If CMS is inclined to remedy the economic disparity, Medicare "might think about reducing the reimbursements to hospitals to the same levels that they reimburse for private offices," lead author and professor emeritus of radiology Dr. David C. Levin told "That still will not stop the migration of private-office radiology into hospitals. It just won't be as lucrative for hospitals."

To investigate whether recent reimbursement cuts have resulted in a shift of MRI utilization from private offices to hospital outpatient settings, Levin and colleagues reviewed data from 2002 to 2012 from the Medicare Part B Physician/Supplier Procedure Summary Master Files.

The first part of the study reviewed elective outpatient MRI exams done in both settings, and whether the studies were performed by radiologists, orthopedic surgeons, all other physicians (categorized into one group), or independent diagnostic testing facilities (IDTFs). After radiologists, orthopedic surgeons are the most frequent users of MRI in their offices, the authors noted.

In 2002, the number of MRI scans performed in private offices was slightly greater than the number of exams in hospital outpatient departments, Levin and colleagues found. For the next four years, the number of MRI scans increased at both locations, but the growth was more dominant in the private-office setting (54%) than in hospitals (40%).

MRI volume, private office vs. hospital outpatient
Location No. of MRI scans
2002 2006 2012
Private offices 1.76 million 2.72 million 2.43 million
Hospital outpatient departments 1.69 million 2.36 million 2.66 million

By 2008, however, the difference in utilization began to narrow. In 2011, the number of MRI exams in hospital outpatient departments surpassed the volume in private offices. By 2012, hospital volume was 2.66 million MRI exams, compared with 2.43 million scans in private offices.

Interestingly, despite the growth in MRI in the Medicare population from 2002 to 2006, total MRI utilization -- private practice and hospital outpatient numbers combined -- was relatively flat between 2006 and 2012. Total volume was 5.08 million in 2006 and 5.09 million in 2012.

The researchers also broke down the numbers by specialty over the 10-year period of the study. Office MRI volume among radiologists increased 27%, compared with a 216% increase among orthopedic surgeons and 124% growth among all other physicians.

Private-office use of MRI by radiologists reached its peak in 2006 with 1.56 million exams, but it decreased to 1.41 million scans in 2010 before rising slightly to 1.43 million exams in 2012. IDTFs also reached their pinnacle in 2006 with 735,166 scans, only to slide to 538,574 MRI exams in 2012. Among orthopedic surgeons, MRI volume peaked at 222,901 in 2011 before falling back to 215,522 in 2012.

Driving forces

As for the reasons behind the change, Levin and colleagues referred to a previous study of theirs, which showed a "distinct slowing" in discretionary noninvasive diagnostic imaging procedures in the Medicare fee-for-service population between 2005 and 2008 (American Journal of Roentgenology, January 2011, Vol. 96:1, pp. W25-W29).

More specific to this study, they cited reductions in reimbursement for MRI scans, physicians' increasing use of appropriateness criteria, more restrictions on insurers, and radiology benefits management companies requiring preauthorization as prime reasons for the exodus of MRI from the private-office setting.

"It was kind of like death by 1,000 small arrows," Levin said.

He speculated that the migration of MRI from the private-office setting to hospital outpatient departments will continue -- to the detriment of private offices.

"If this trend continues, it will not be very good for private-office imaging," he said. "I think the spread that we see now in 2012 with hospitals' [MRI volume] considerably higher than private offices will continue to grow."

The influx of baby boomers taking advantage of Medicare benefits is also expected to influence MRI utilization.

"As that Medicare population increases in size, you will see more MRI volume, but the rate per thousand probably will stay pretty stable," Levin said. "I think hospital outpatient utilization will continue to go up and private-office utilization will continue to go down, but the overall rate will stay the same."

In addition, any savings to Medicare that result from reimbursement reductions to private-office providers will likely be offset by the relatively higher costs of MRI exams in hospital outpatient departments, Levin and colleagues wrote.

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