Radiologists (mostly) cheer as insurers set imaging rules

Dear Imaging Services Provider: Do you offer at least four other modalities in addition to CT or MRI? And do you have a radiologist on site during all normal business hours?

Your answers may determine whether you stay in business, as insurers establish new rules on who can be reimbursed.

The concept isn't new, but stricter use of "provider assessment" or "privileging" guidelines is gaining steam among payors hit by yearly double-digit increases in imaging costs.

"In a short period of time we've taken this to a significant portion of the population, and I think that's really going to accelerate," said Victor Panza, senior vice president of National Imaging Associates (NIA), a radiology benefits management (RBM) company headquartered in Hackensack, NJ.

Given the number of health plans that contract with NIA or competing RBMs, Panza believes at least 30 million Americans are already covered by such imaging guidelines. Recent publicity over a new program in Pennsylvania has inspired even more calls from potential customers, Panza said.

But the initiative in Pennsylvania also highlights the mixed effects such implementations may have on imaging specialists.

Some radiologists may reflexively resent any third-party interventions -- or be hard-pressed to meet the specific requirements. Others find themselves in the rather unusual role of praising insurers, lauding the adoption of higher quality standards for imaging.

Overall, it seems financial considerations will inevitably promote more privileging in the U.S. The spread may force changes in radiology practices, but proponents argue a much greater and desirable impediment will be placed on self-referred imaging by other specialists.

Indeed, as the prospect of governmental action against in-office self-referral appears dim, health plans may emerge as the unexpected protectors and champions of imaging performed by imaging specialists.

Pennsylvania blues

The financial concerns driving growth in privileging are well-demonstrated by the case of Pittsburgh-based Highmark Blue Cross Blue Shield.

Highmark had contracted with NIA for preauthorization of imaging for its various health plans between 1997 and 2001. After seeing its imaging costs stabilize -- and getting feedback from providers who thought the third-party intervention was no longer necessary -- Highmark discontinued the program.

But with the preauthorization controls removed, Highmark saw its payments for advanced imaging services -- CT, MRI, and PET -- grow by more than 20% per year in 2001, 2002, and 2003.

Needless to say, the company's need to pass on these costs in the form of higher premiums brought some sharp questioning from customers. Highmark currently spends more than $500 million per year for outpatient imaging of its nearly 4 million insureds.

The trend made a return to preauthorization controls obvious. But as Highmark officials looked closer at what was happening in their market, some other concerns arose, according to company spokesman Michael Weinstein.

Highmark was seeing much broader use of advanced imaging overall. And the number of outpatient imaging facilities in the region had increased substantially: Of the 160 MRI units in western Pennsylvania, about one-third are now in outpatient settings, according to Panza.

Studies have shown that utilization will generally expand with expanded capacity -- especially when self-referral is possible. So when Highmark restarted its relationship with NIA, the agenda included implementation of quality standards that would likely cull Highmark's imaging provider network.

Details, details

Highmark revealed the first phase of its new program in July, when it sent out letters to nearly 1,000 facilities that had provided imaging services to its patients.

The letters spelled out nearly 50 privileging conditions -- many of which are hard to criticize. For example, all imaging facilities will now be required to have documented radiation safety and quality control programs.

A number of the guidelines also apply only to certain types of imaging, such as the equipment and accreditation standards now set for providers of peripheral vascular ultrasound.

Then there are the guidelines that cut right to the issues of advanced imaging and self-referral. These have generated more attention and grumbling -- especially among nonradiologists, but also from imaging specialists.

Foremost among the new rules: Any entity seeking to provide CT, MRI, or fluoroscopy services must also provide at least four other services from the Highmark list.

In addition to CT, MR, and fluoro, the list includes:

  • Plain films
  • Bone densitometry (DEXA)
  • General ultrasound
  • Ob/gyn ultrasound
  • Mammography
  • Echocardiography
  • Nuclear medicine or nuclear cardiology

PET isn't on the list because Highmark's guidelines specify that only hospitals will be reimbursed for that modality.

Also generating attention is Highmark's requirement that facilities have a radiologist on site at least 40 hours per week during normal business hours, including at least one evening per week until 8 p.m., and two Saturdays per month for a minimum of four hours on those days.

Radiologists react

"That's a little bit draconian, I think, to actually specify when your facility has to be open," said Dr. Timothy Farrell, who recently completed his term as president of the Pennsylvania Radiological Society.

Farrell is also concerned that while the intent of Highmark's multiple-modality requirements may be to curb self-referral, "there are a lot of radiology offices that don't have five of the modalities."

"Because of the reimbursement being poor for things like mammography and fluoroscopy, radiologists aren't putting those in their offices," Farrell noted. "And nuclear medicine cameras are pretty expensive. So there are a lot of offices that just do, say, CT and ultrasound and MRI."

Overall, however, Farrell supports the guidelines as "a very good start" with "a lot of good patient care initiatives."

Farrell hopes to engage Highmark in a dialogue on behalf of the state society's members with concerns about the guidelines. The company has indicated that the details aren't set in stone.

In the meantime, NIA's Panza maintains that "for every radiologist who's complaining about this in western Pennsylvania, there are five more who are supportive who are in the private sector."

Among the unreserved supporters is Dr. Frank Madonna, president and CEO of Lucien Diagnostic Imaging, a group of 23 radiologists with centers in western Pennsylvania.

"We have multiple imaging centers, and every one of them has a radiologist on site at least 40 hours a week and probably more like 50 or 60 hours a week," Madonna said. "So we have no issues with (Highmark's guidelines). In fact, we think it's good medicine."

Likely impact

Western Pennsylvania physicians generally cannot choose to ignore Highmark's wishes. The company is one of two dominant players in the region, covering a majority of private insurance patients, including some in Medicare plans.

But exactly how providers will respond has yet to fully emerge, and will probably vary based on individual circumstances.

"Clearly the landscape will change," Madonna said. "You'll see people who are older divesting, and the younger people or those who have more an investment up front will probably try to increase their modalities."

Mergers, acquisitions, and joint ventures among providers may occur. Most facilities that are likely to fall short of Highmark's requirements are in Pittsburgh, Panza said, which may provide some incentives for moving equipment to relatively underserved rural areas.

And while the guidelines make radiologists essential to those seeking Highmark reimbursement, other providers may still try to use radiologists-for-hire rather than including them on an equity basis. But the net effect for self-employed radiologists should also be positive, Panza said.

"Here are folks that invest millions of dollars in instruments, and they could potentially (without the privileging rules) be competing with someone who buys a $200,000 machine and puts it in a spare room in their office," he said.

Positive response

The success of Highmark's initiative to restrain the growth in its imaging expenses seems assured, based on the experience of others.

The experience in Connecticut is particularly noteworthy. At least four insurers with a share of that state's market have independently adopted privileging programs in recent years, according to Dr. Alan Kaye, president of Advanced Radiology Consultants in Trumbull, CT.

The 7,000-physician Connecticut State Medical Society IPA, which provides services for the Health Net plan, helped that insurer adopt its privileging program for imaging in 1997.

"It has worked fairly well over the years," said Ken Lalime, executive director of the CSMS-IPA. Compared to the 15% to 25% annual growth in imaging costs seen in other areas, Health Net's increases have been "much below that," according to Lalime.

The success of a privileging plan adopted by CIGNA Healthcare of Connecticut has also been documented in a study published by the American Journal of Roentgenology.

The study by Dr. Harold Moskowitz found a 6% decrease in the total number of radiologic exams after the adoption of CIGNA's program, and a 63% decrease in the exams performed by nonradiologists (AJR, July 2000, Vol. 175:1, pp. 9-15).

Indeed, the likely impact of Highmark's program on imaging self-referral has inspired praise from a number of prominent radiologists.

Highmark's rules will "make it pretty tough for a cardiologist to start doing MRI and CT of the heart, which is good because they shouldn't be doing it," said Dr. David C. Levin of Thomas Jefferson University.

"I think that this is an example of the payor understanding the need to control imaging utilization," said Dr. James Borgstede, chairman of the American College of Radiology. "We recognize that there's going to have to be control of this, so we're looking very carefully at what Highmark is doing."

The publicity over privileging has also drawn attention from a legislative subcommittee that advises on Medicare policy, according to NIA's Panza. Overall, the trend toward privileging may be the key to stalling the encroachment of nonradiologists in imaging.

"This is a good thing for radiologists," Panza said, "and it ultimately is a good thing for the population if we're able to keep advanced imaging in the hands of the specialists who have the investment in their training and education as well as the instrumentation."

By Tracie L. Thompson staff writer
November 4, 2004

Related Reading

States, payors seek to stem tide of self-referral abuse, October 29, 2004

Stark II interim final rule leaves huge self-referral loophole, July 20, 2004

ACR reverses course on ortho MRI, May 11, 2004

Health insurers see new role managing information, April 7, 2004

Non-radiologists outpace radiologists in skyrocketing use of ultrasound, December 1, 2003

Copyright © 2004

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