Deficit Reduction Act - Where Will this Take Healthcare?
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)
