GAO and CMS find the results they wanted in Deficit Reduction Act report

It was only 2 years ago that many of us in diagnostic imaging lobbied, wrote letters, and even begged the Centers for Medicare and Medicaid Services (CMS) to reconsider the draconian cuts to reimbursement we were facing through the Deficit Reduction Act (DRA). We educated legislators and their staffs on the costs to provide imaging and warned Congress that these cuts would cause rampant bankruptcies in the imaging provider community, a great loss of jobs, and reduced access to important imaging exams for Medicare beneficiaries. Congress listened but did not reverse the decision to move forward with the estimated 20% cuts to reimbursement for high-cost imaging.

Now the Government Accountability Office (GAO) has reported that CMS was correct in its estimate of imaging savings, even in light of the fact that the number of imaging exams provided to the Medicare population continued to grow. As a matter of fact, the analysis shows that from 2000 to 2006, imaging costs increased 11.4% per year on a per beneficiary basis. But in 2007, imaging costs declined by 12.7% on a per beneficiary basis. Utilization rose by 5.9% per beneficiary per year from 2000 through 2006, and in 2007 utilization continued to grow but at the slower rate of 3.2%. The per-beneficiary trend is used by the GAO to ensure that the analysis is not affected by growth in the number of Medicare beneficiaries.

CMS received the report before it was released to the public, and CMS leaders commented that they were pleased to know that the analysis confirmed their original savings estimates. They also commented that they were pleased to see that access to imaging for Medicare beneficiaries was not affected, and actually utilization continued to grow. They expressed further concern about that continued growth. What a victory for the misguided people who developed this methodology for the cuts to reimbursement!

My greatest fear when these cuts went through was that there would be just such a report that alleged how correct CMS was and how wrong the imaging community was in its comments to Congress, MedPAC, and CMS. The report has arrived. Alongside the report are the facts that there were not widespread bankruptcies of imaging centers, and the perception that those that did close were probably just poorly managed.

So where do we go from here? We must strengthen our fight against further reductions, because we know that the industry cannot sustain further cuts. We will have to be careful in our comments to congratulate our industry for keeping their businesses open through tremendous financial pressures. We also will have to point out that access to care will be limited in the future by providers’ inability to purchase equipment and upgrades and their inability to continue significant research and development for future imaging breakthroughs. Those medical breakthroughs will come slower to our country. Jobs lost in the areas of imaging sales, research, installation, applications, the radiology profession, and patient care are not apparent to Congress and must be pointed out and quantified.

At the radiology-department and imaging-center level, we will need to face the fact that CMS is not turning back these cuts in light of this report. This report confirms that, strictly from the perspective of saving government dollars, it was the right thing to do, whether we agree or not. Short- and long-term planning will have to reflect these revenue cuts, and we have to strive even harder for efficiencies in our radiology departments and imaging centers. Productivity measures, renegotiation of contracts for goods and services, and electronic cost solutions will be an imperative.

This drive to efficiency will very likely lead to further consolidation in our industry. Over the next 5 years, we will see radiology megachains become household words in health care. They will compete for Medicare, health plan, and self-insured employer imaging contracts on a national basis, deliver information electronically, and be paid electronically at time of service.

Where is your facility going to fit into that new environment? Start today to add this potential structure to your thinking when you are looking at 2009 budgeting. What will you buy, create, or market that will position your practice, radiology department, or imaging centers to thrive in a new market? Don’t make large purchases or strategic plans without efficiency and consolidation on your mind. Begin to develop alliances and collaborations with other groups to enhance your practice capabilities and visibility.

Even with all this pressure, diagnostic imaging is here to stay. It has become one of the most important drivers of diagnostic certainty in every episode of care. It touches every physician visit, hospital admission, therapy, and surgery. It is truly the most exciting single niche in health care. We are in a wonderful industry; we just need to keep improving and developing our business skills. It may be a new world in imaging, but it will be a dynamic one full of opportunity for those that excel. I plan to be there and to succeed, and I know that you do, too.

Cherrill Farnsworth is a national expert on changing health care regulations. She founded the National Coalition for Quality Diagnostic Imaging Services (NCQDIS), now the Association for Quality Imaging (AQI), a highly successful grassroots organization focused on preserving Medicare reimbursement for radiology’s technical component in Washington. She is also president and CEO of HealthHelp, a pioneer in radiology benefit management through peer-to-peer physician consultation.