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Decoding Reimbursement Challenges

– By Matt Skoufalos

Why is it so hard to get paid for medical imaging services? The shifting landscape of reimbursement is complicated by increased regulation at the federal level, increased resistance at the payer level, and the steady pace of confusion at the provider and patient level. With new mandates coming due and fiercer competition for even fewer dollars, the next few years figure to be a proving ground in which new business and operational strategies are tested, often for hospitals and imaging centers to merely keep the revenue streams that they’ve established previously.

Melody Mulaik, president of Revenue Cycle and Coding Strategies Inc. in Powder Springs, Georgia said that imaging services face “a continued squeeze” amid proposed changes to the Medicare Physician Fee Schedule by the Centers for Medicare and Medicaid Services (CMS). As CMS places an increased priority on primary care and telemedicine services, the agency has planned to increase reimbursement for evaluation and management (E/M) services in 2021. But because of Congressional budget neutrality rules, these changes will require cost offsets across reimbursements for other lines of service. Those changes will potentially shift revenues from physicians who don’t often bill for E/M – namely, radiologists and radiation oncologists, the American College of Radiology (ACR), said – spurring its requests for Congressional intervention.

“E/M services account for about one quarter of all Medicare dollars,” said William T. Thorwarth, ACR CEO in an October 1, 2019 statement. “The proposed CMS policy would reallocate tens of billions of those dollars, which goes beyond the appropriate scope of the power of the executive branch and rightly deserves to be debated in Congress.”

“Even though we’re robbing Peter to pay Paul, there’s not enough to offset what they’re going to take away,” Mulaik said. Along such trend lines, she predicts that reimbursement for imaging providers will continue to be a target.

At the same time as the proposed E/M changes are slated to be implemented, so too is the CMS Appropriate Use Criteria (AUC) program, which requires practitioners ordering advanced diagnostic imaging services – including CT, PET, MRI and nuclear medicine – to consult a qualified Clinical Decision Support Mechanism (CDSM). According to CMS:

“A consultation must take place at the time of the order for imaging services that will be furnished … ultimately practitioners whose ordering patterns are considered outliers will be subject to prior authorization … claims that fail to append this information [the CDSM consultations] will not be paid.”

Mulaik points out that the impact of these rules changes will only slow either the pace of services delivered for patients, or the reimbursements for imaging providers and radiologists who perform the services. (Physicians won’t lose out for not consulting the AUC when they order a study, but the imaging professionals who perform it can be penalized on the back end if they don’t.) Were CMS to target other lines of service for rate reductions, it’s possible that hospitals could make different choices to redirect their business operations. But because imaging services are such a profit center, there’s no way any provider would abandon them, she said.

“What hospital’s not going to have a CT scanner?” Mulaik said. “They know everyone has to maintain imaging services. For some service lines, they can say ‘We as an organization are not going to choose to do that,’ but when it comes to core imaging services, every facility is going to have it. If you decrease reimbursements in certain specialties, organizations can just say, ‘We’re not going to do it.’ ”

Imaging providers also must contend with patient steerage, Mulaik said. As insurance companies continue to negotiate with imaging centers for lower service fees, they steer patients away from certain providers and toward others based on profitability for the insurers. Those mechanisms might contain some costs, but they don’t guarantee that a patient gets the quality of service they are seeking.

“Let’s say the insurer wanted you to go to an imaging center because it’s going to save [them] money,” Mulaik said. “I want to know what kind of equipment do they have? What radiologist is doing the interpretation? Most patients are not going to have that knowledge. To be clear, there are many excellent imaging centers in the market but it is not always easy as a consumer to make that differentiation.

“At the end of the day, the contract is between the patient and the insurance company,” she said. “As an imaging provider, you don’t really get to have direct conversations with patients when their services are ordered. The downstream financial impact of that is there’s a lot of things it’s difficult to have an influence on. It’s a constant battle because you don’t always have those mechanisms to educate the patient.”

Patient steerage by insurers has been billed as cost savings; Mulaik said that, more accurately, it can affect patient care.

“Even though you’ve got a plan and a deductible, they can critique the patient’s decision after the fact, and even deny coverage when they have issued a prior approval,” she said. “When you look at the Affordable Care Act, insurance companies are limited to 15 percent for administrative costs, so they’re very motivated to be as lean as possible to make sure that they get that margin out of it.”

Running lean is a sound operational principle, said Tom Szostak, director of healthcare economics at Canon Medical Systems USA. Although most health care providers view imaging services as a profit center, he believes they could improve revenues if they begin to regard imaging as a cost center instead. Szostak blames the reimbursement-incentivized ramp-up to electronic health records (EHR) as having shifted the focus of the industry away from cost management, which he believes to have been a longer-term and more necessary goal in a value-based care model.

“If you’re moving everyone to risk-share models, you have to become cognizant of costs,” Szostak said. “You’re going to know what is the impact to the contribution margin of the bundle, or the consolidated payment that you receive monthly, or the population that’s attributed to you that you’re managing the risk for. You’ve got to look at costs – per procedure, equipment, labor and real estate, single-use supplies, pharma.”

Instead of focusing on fee-for-service models, Szostak believes imaging providers should consider their roles in the broader context of health enterprises that eventually will assume the broader risks of providing care for regional populations. It isn’t about layering additional services over top of what’s being provided in order to make more money, he said; instead, it’s about considering what’s the most cost-effective study for the complaints with which the patients present, which circles back to the concept of AUC.

“Yes, we still have to keep our legs straddled in a value lane and a volume lane, but the volume lane is going to migrate into value,” Szostak said. “Kvetching about reimbursement for certain procedures is a transactional approach to health care, and it’s not what’s important if we’re focused on trying to address the issues around health spending. Imaging has got to figure out how to educate the provider community on what the right studies are that are supposed to be done based upon the presentation of the patient.”

Along with appropriateness criteria and clinical decision support mechanisms, Szostak said cost containment also involves recapturing business lost in other barriers to patient access. For patients who don’t have access to transportation, he suggested that imaging service providers might consider eating the costs of rideshare opportunities to help get people in the door. Partnering with a transportation service (or providing one in-house) could guarantee that patients access services as scheduled. The same mechanism could potentially mitigate dropped appointments or, for multi-site providers, timeslots lost to confusion among patients as to where they are meant to arrive. Szostak also believes there might be an opportunity to reverse no-show losses by offering to fill those openings with last-minute bookings, similar to flying on standby. Such practices could help optimize utilization rates and engage patients with cash prices. And, if hospitals don’t develop such services, he argues that maybe a third-party aggregation platform could.

“I’d find a way to get paid and maximize my utilization in terms of scheduling, and ensuring that I don’t ever have to deal with no-shows,” Szostak said.

Broadly, Szostak argued that one of the biggest obstacles to bringing up the bottom line in imaging is the slow pace of institutional change in health care. He faulted all levels of leadership in its “a very senior-tenured workforce” for their failure “to better equip for change.”

“Radiologists need to become utilization managers and educators to those attending physicians, and everyone’s resistant to change,” he said. “Bandwidth is so limited in hospitals and health systems that they look at everything from an immediate need standpoint instead of a bigger, long-term vision.”

“There’s no sense of urgency, and I think that change is overwhelming,” Szostak said. “I don’t think that administration is good at indoctrinating change, or educating mid-level management, directors, and even frontline personnel as to changes coming that will impact their business, and how to better equip for change.”

Szostak also criticized employer-based health care plans for attempting to reduce their exposure to health spending by shifting those costs to employees, whose higher deductibles create bad debt for hospitals and service providers. If providers were better at managing costs, he reasoned, health spending might not be as high as it is in the United States. If spending continues to climb, it’s not inconceivable that all lines of service will be affected more broadly and more substantially by federal price controls, Szostak said.

Sheila Sferrella, president of Brentwood, Tennessee-based Regents Health Resources, believes that the biggest revenue hurdle for imaging providers to clear involves commercial payers. Sferrella criticized the imaging study authorization process as “broken at multiple levels on the payer side,” from the length of time required to secure approval for a study, to the costs associated with chasing down various parties involved in the process.

For a start, authorization from a commercial payer takes a minimum of three days to obtain, she said, a timetable complicated by the fact that at least 20 percent of all studies ordered require a peer review and some other indeterminate percentage are denied out of hand. (Medicaid studies can’t even be ordered prior to assuring that patients qualify for care, Sferrella noted).

Practically, she points out that in many institutions, imaging authorizations are faxed to a single server, which staffers then must access to call back their patients to schedule studies. Multiple people making multiple calls only adds to the length of time it takes to get the study ordered, authorized and get a patient scheduled, “and that’s if everything works correctly the first time,” Sferrella said.

“I certainly think commercial payers could make the authorization process a whole lot easier,” she said. “It ought to be electronic, and you ought to be able to get it back within two hours if all the information’s there. I see what’s being submitted, and they’ve got all the information they need in nine out of 10 cases. But the payers aren’t going to make it any easier.”

The added step of AUC, which is handled by different people within an organization, can complicate this timetable by requiring further coding requirements in order to bill for Medicare reimbursement. Effective January 21, 2021, failure to address these requirements before performing a study is a surefire way to get payment denied.

“At a minimum, it’s six different people touching a claim for appropriate use criteria,” Sferrella said. “You’ve got to have different processes for every claim, and different people having to touch every single one of those claims throughout the process: scheduling, registration, imaging, billing, coding and someone to send all the info to the rad group so they can bill or collect.

“The government wants to talk about reductions in administrative burden, but they just keep piling it on,” she said.

Sferrella noted that AHRA has been working with CMS to try to streamline the AUC process, hoping to derive an electronic tag that would flow through to the billing and claims processes automatically, but changing hospital and insurance forms is arduous and complicated work.

“When we looked at other regulations with our members, if you talked to 12 hospitals, there were 12 different workarounds for the processes,” Sferrella said. “In an imaging center, it doesn’t matter because you’re billing on a global bill. The issue is for radiologists who read at hospitals where they’ve got to get this information and provide it so they have that same G code and modifier to append to their bills.”

And what happened when a patient presents with complaints that don’t correspond to the authorized imaging study? Practitioners are left with the choice of either performing the wrong-but-authorized procedure, or ordering a new authorization for the correct study and starting the process from square one.

“That happens day in and day out because physicians don’t always know what the correct order is,” Sferrella said. “Part of it is trying to satisfy your referring physician and not wanting to upset them, but you do need some basic information to get the study approved. It’s that fine line.”



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