DRA Cuts Leave Many Suffering “Unintended Consequences”

Your editorial on DRA 2005 [“Looking Under the DRA’s Hood,” August 2007] was an interesting read, but you might consider taking it a step or two further. Indeed, there needs to be an informed and factual review of the overall impact of DRA 2005 complete with data gathering. The cuts in Medicare reimbursement for imaging have a much broader impact, far beyond the Medicare utilization and budgetary concerns. It has had a dampening effect on imaging availability to Medicare Advantage subscribers, and it has diminished the provider’s ability to negotiate agreements with private insurance carriers, which almost invariably use the Medicare fee schedule as the basis for negotiating rates.

In communities where Medicare comprises 40% to 60% of the patients seen, the magnitude of the impact may well shut out any desire to service Medicare Advantage subscribers.

As for commercial carriers, one would have to wonder what would happen if a major purchaser of supplies and services, say a major automotive manufacturer, were to publish what it routinely pays for services and supplies from vendors and all other companies that utilized those same supplies and services announced that, regardless of their volume, payment practices, or overall business relationship with those vendors, they too expected to function from that base of information. I have to believe that a legal battle would ensue. Yet, Medicare publishes its rates/rules/adjudication considerations and nothing precludes commercial carriers from using that as the basis for their negotiations. To make matters worse, they unilaterally initiate multiple procedure reductions (in excess of the Medicare amount) and have, in some cases, unilaterally implemented the lower of HOPPS or Part B claims adjudication methodology with the justification that Medicare is the “standard of the industry.” This is a fascinating claim given that Medicare is an entitlement program and not an insurance product. It isn’t publically traded, doesn’t charge actuarially based premiums, does not bonus executives based on “profitability,” and has an adverse selection patient base determined by age.

What Congress did behind closed doors has resulted in a perfect example of the “law of unintended consequences.” Unfortunately, it is doubtful that, to this day, they have a clue about what they have done.

A. Duane Seabury, MBA, Administrator
Radiology Associates of Ocala, Medical Imaging Centers,
TimberRidge Imaging Center, and Center for Vascular Health
Ocala, Fla