Standalone imaging centers to be hit hard by reimbursement cuts

Standalone imaging centers are expected to be hit hard by Medicare imaging cuts that went into effect Jan. 1, with some providers seeing cuts approaching 40 percent for some MRI procedures.

According to an article in DOTmed News, the final rule for the Medicare Physician Fee Schedule includes severe reductions for frequently performed exams, including MRI and CT scans of the head, neck, chest and lumbar spine. These cuts are hitting freestanding imaging centers particularly hard, said Michael Mabry, executive director of the Radiology Business Management Association, an industry membership group based in Fairfax, Va.

APS Medical Billing last summer issued a whitepaper detailing CMS reimbursement changes for both upper extremity and lower extremity MRI services that will result in reimbursement cuts of over 40 percent. According to APS, these reductions are due to three policy changes: a new scan time for the MRI codes; the fourth transition year to the AMA's Physician Practice Information Survey Data; and changes in interest rate calculations. The new scan time factor (a reduction from 63 to 33 minutes for these procedures) is having the biggest impact on reimbursement, the whitepaper noted, since it "greatly impacted the equipment cost aspect of RVU's."

"If you're a multi-modality imaging center, the impact isn't going to be as great," Mabry said. "If a vast majority of your revenue is from CT and MR, you're going to see much more of an impact." 

For instance, RadNet, a Los Angeles-based company with a network of more than 250 outpatient imaging centers, expects to see its Medicare reimbursements cut between $20 million and $22 million in 2014, according to the article

"We anticipated a significant hit in 2014 just from the implications of that proposed rule over the summer," RadNet chief financial officer Mark Stolper, told DOTmed News. "There have been slight cuts, but never anything like this."

To learn more:
- read the article in DOTmed News
- see the APS whitepaper (.pdf)

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