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Deficit Reduction Act - Where Will this Take Healthcare?

Posted At : 11/29/07 11:18 PM | Posted By : Matthew M. Brown
Related Categories: Deficit Reduction Act

On January 1, 2007 Deficit Reduction Act went into effect, which reduced technical component payment on studies of contiguous body parts and limited technical reimbursement for high-tech imaging studies to the lesser of the HOPPS schedule (Hospital Outpatient Prospective Payment System). Will private payors react in a similar fashion? The reason for the enactment was because Medicare payments under the physician fee schedule for diagnostic imaging services grew by nearly 90% from $5.8 billion in 1999 to $13.7 billion in 2005 so growth in Medicare payments for imaging services prompted CMS and Congress to implement policy to lower payments. By doing this, technical reimbursement for high-tech studies performed at IDTFs was reduced by 30-70% depending on the study type. So how does affect the industry you ask? Here are several scenarios: • DRA and other payor policy changes are focused on limiting the growth of outpatient (primarily IDTF) imaging • Analysts predict that DRA will reduce total IDTF revenue by 10-15% • Revenue reduction will limit new entrants into the IDTF market and catalyze numerous acquisitions and consolidations • Additionally, because hospitals and IDTFs can compete on level reimbursement ground, hospitals will increasingly look to expand outpatient imaging programs. Now that hospitals and IDTF's have an even playing field, I am using an assumption to say that hospitals will look to open new or purchase existing imaging centers to compete. Imaging centers now will look how to differentiate themselves from the emerging hospital based imaging center influx. They can do that by targeted marketing to subspecialty practices, such as Orthopedists, Neurosurgeons etc. To do this they would need subspecialty radiologists to increase the quality of their reports, though the hospitals will look in the same areas to increase their referral base.

So how does this affect you, your center, and your careers? Let me know.

(BTW: Sorry for the long wait, been a busy couple of months)

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The entire staff at the out-patient imaging center I work at had to take a 4% pay cut with no raises for another year. We were already underpaid compared to other radiology professionals in our town of 350,000. At first they made it sound like the pay cuts were just temporary because there are people working to get the DRA suspended temporarily until a 18 month study of its long range effects are investigated. We also took a "hit" when our health insurance costs went up at the beginning of the year. My employer had planned to open a sattelite facility on the other side of town. It has been postponed for almost a year so far. Morale is quite low. Has anyone heard about the DRA possibly being suspended? If so, has it happened? The last we were told is that they were going to try and tack it on to a bill going through Congress this fall.
# Posted By Nancy | 11/1/07 2:08 AM
Due to this change instead of using hospital imaging services, many physician offices, such as Orthopedists, Neurosurgeons, even Internist are trying to get mobile scanners, CT, MRI, US and even NM to come to their offices and the exams are preformed there. But here is a question – what kind of imaging quality are they providing for their patients? Who is reading the films and supervising the staff performing the imaging exams? While all of this is happening, the bottom line is that patient care is suffering. How can an internist be allowed to read CTA & stress test just by attending few days of seminars? I will not elaborate further on that, but will only say that while patients are not aware of what is going on behind the scene, every action has equal in strength and opposite in direction reaction. And that is exactly what is happening here. While Medicare and Medicaid are trying to cut down the payments in one way, the physicians are finding other ways to make up for the lower income, and the patients are the once that suffer.
# Posted By Iva | 5/29/08 7:55 PM
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