The revaluation of CPT codes is likely to lead some independent centers to close their doors, changing the imaging landscape.

Pam Kassing, MPA, RCC, Senior Economic Advisor on Economics and Health Policy, American College of Radiology

Thanks to numerous hit dramas on television, many people, not just those in medicine, know a “code blue” means someone’s heart has stopped and there is an immediate need for life-saving intervention, perhaps with tools delivered on a “crash cart” (another popular TV term). Use that code and people will step up, or out of the way, as needed.

Other codes used in medicine, however, are not standardized, or even consistent from one year to the next, particularly those associated with billing and reimbursement functions. The constant changes have created challenges for health care providers trying to receive full reimbursement for services delivered. Now they face a new challenge: the revaluing and bundling of Current Procedural Terminology (CPT) codes.

Generally, when a CPT code is revalued and/or bundled, it means a decrease in reimbursement for the associated procedures and a resulting reduction in revenue for the health care providers. This is particularly true for independent imaging centers, which have seen some of the greatest discounting. The total damage is not yet known, but the impact is significant.

The loss of income related to a change in the CPT coding of CT of the abdomen and pelvis has been millions, estimates Pam Kassing, MPA, RCC, Senior Economic Advisor on Economics and Health Policy for the American College of Radiology (ACR), headquartered in Reston, Va. The two procedures, previously billed separately, were bundled together and revalued so that the new code is paid at nearly the same rate as a single region code. “The reimbursement is down 25% for the professional component, and 50% to 65% for the technical,” Kassing said.

Further similar changes can be expected. With shared responsibility for the process, the Centers for Medicare and Medicaid Services (CMS) has expanded the number and types of codes that it is evaluating. There are at least 10 resurveys under consideration for new valuation in 2012. The motivations cited vary, but many believe economics and a desire to save money are driving factors.

This puts imaging centers in a more precarious position, and industry watchers expect a new landscape to emerge over the next 5 to 10 years. Unfortunately, that landscape is likely to include fewer independent imaging centers. “The continued decreases in reimbursement will continue to drive imaging providers to leave the market; sell their imaging centers to large, multistate providers; or sell their centers to hospitals,” said Alicia Vasquez, CRA, RT, FRBMA, practice administrator for the Arcadia Radiology Medical Group, Arcadia, Calif, and president of the Board of Directors for the Radiology Business Management Association (RBMA), headquartered in Fairfax, Va.

Vasquez cautioned that unless centers have positioned themselves over the past 3 years to lower debt and maximize efficiency, “they will struggle to stay above breakeven going forward.”

Mike Bohl, Executive Director, Radiology Group, PC, SC

More of the Same

The path going forward will be difficult because it is expected there will be continued changes in reimbursement with a downward trend. “It seems to be a broad approach to reducing the cost of imaging in Medicare, and CMS policy makers and others, like MedPAC [Medicare Payment Advisory Commission], are embracing this approach,” said Bob Still, chairman and practice manager of Lancaster Radiology Associates in Lancaster, Pa; a member of the RBMA Federal Affairs Committee; and the parliamentarian/eastern director for the RBMA Board of Directors.

To identify appropriate procedures for coding reevaluation, code screens have been implemented, with decisions rendered after analysis of the procedures called out by the screens. “To start with, they looked at codes that were billed 90% or 95% together. Right now, they’re looking at codes that are billed 75% together,” Kassing said. In addition, policy makers are looking at the codes that are the fastest growing, involve new technologies or services, are frequently billed in conjunction with furnishing a single service, have low relative value units, are billed multiple times, or have not yet been valued by the Relative Value Scale Update Committee (RUC). “And then they have another category just in case there’s anything else they want to look at,” Kassing said.

Ultimately, the policy makers are looking for misvalued codes, although many think the motivation is purely to save money. The cost-cutting rumor is fed in part because the process is extremely secretive. New values or reimbursement figures are not revealed until late in the year, typically November. But new CPT codes must be implemented January 1, notes Kassing, which leaves little time for providers to budget and payors to update their systems.

However, despite not being able to reveal new codes or values, ACR is able to share the codes that have fallen out of the screens. In 2012, those procedures include CTA of the abdomen and CTA of the pelvis, renal angiograph and radiological supervision and interpretation (RS&I), inferior vena cava filter and RS&I, abdominal paracentesis and imaging guidance, sacroiliac joint injections and RS&I, nuclear medicine lung ventilation/perfusion, and hepatobiliary code families. A few procedures escaped revaluation this year but were noted for possible future revision: carotid angiography, embolization, thrombolysis, and foreign body retrieval procedures.

Alicia Vasquez, CRA, RT, FRBMA, Practice Administrator, Arcadia Radiology Medical Group

The Center Dropping Out

With this number of procedures under the microscope, no imaging center should expect to pass unscathed. “These are high-volume procedures. They’re not doing this with procedures you do infrequently,” said Mike Bohl, executive director of the Radiology Group, PC, SC, in Davenport, Iowa, and president-elect of the RBMA Board of Directors.

Generally, when a new value is assigned, it is lower than the existing number, which translates into less income from Medicare and potentially other payors as well. Still thinks it could mean a 40% to 50% drop in net profits over time. Bohl’s center has already seen a 25% drop in billed quantities for CT associated with the CPT code changes regarding CT of the abdomen and pelvis.

This means imaging centers have to prepare themselves, improving efficiency to maximize volume and revenue. “Full-service imaging centers that can provide the highest levels of service to both the referring physicians and patients, provide a quality examination, and do this in the most cost-effective and efficient manner will flourish,” Vasquez said.

Efficiency is key to handling the volume some think will be necessary to survive. “This is a high fixed-cost, low variable-cost business, so the name of the game is volume. Before you could operate at some percentage of capacity and maintain viability, but that percentage has just gone up,” Bohl said.

“It signals a different way of doing business,” Still concurred. This way is likely to involve a reevaluation of the services that a center provides. Single-modality centers may want to expand services, while multispecialty centers may consider eliminating an entire modality or type of service.

“In some areas of the country, it was the profit from CT and MRI that allowed imaging centers to provide services that were operating at below breakeven—some women’s services, fluoroscopy, plain x-ray, and other exams,” said Vasquez. If abandoned by outpatient providers, these services will shift to in-hospital services. Although quality will not be expected to suffer, patient access and eventually patient care may be negatively impacted.

In general, it is expected that imaging will shift to hospitals as a result of declining reimbursements. While no one predicts the complete death of the independent imaging center, the majority does expect many of these practices to close or sell their business to hospitals over time.

“This will be a multiyear process, winnowing out those who are going to survive long-term and those who aren’t, but it’s not like centers are closing their doors left and right,” Bohl said. Even so, life is getting harder for the independent imaging center, and the landscape is definitely changing.

Market Forces, Market Future

Industry groups are stepping in where they can to bring awareness to the issue, track developments, negotiate for smart resurveys, and direct the field’s evolution.

“We’re looking at various ways to provide good quality data to CMS and payors that will drive good patient care,” Still said.

Many of the associations, including ACR and RBMA, work together to achieve their goals and lobby Congress, CMS, CPT, and the RUC. “RBMA must face outward to other organizations more than ever. With radiology undergoing rapid change, RBMA is looking in all directions to engage for synergy and partnership,” Vasquez said. The relationships increase the resources available to members as they try to negotiate in the changing field.

Although patients will continue to have access to imaging services, even if independent centers shift to hospital-based models, that access may not be as convenient or available as with outpatient facilities. “With a number of sites shut down, there will not be as many sites available to service the population,” Kassing said, noting this is occurring at a time when the population seeking health care services is expanding as Baby Boomers age and health care reform brings more patients into the system.

Those centers that are left will face a competitive and informed market. “With so much focus on quality, those centers that do survive must be accredited, must focus on service and access, and must meet ongoing performance metrics. Simply saying you are a quality provider will not matter in the future—we must be able to provide the data to support our claims to not only the health plans, but also the patients,” Vasquez said.

If one thing is certain, Vasquez notes, it is that radiology professionals are going to work more for less income. “The imaging market will continue to remain complex, fluid, and at times unforgiving. We need to avoid complacency and continue to fight for our businesses and industry, as we can no longer take anything for granted,” said Vasquez. There is no crash cart to save struggling imaging centers, but the smart ones may be able to avoid a “code blue.”

Renee Diiulio is a contributing writer for Axis Imaging News.