Long before the Deficit Reduction Act of 2005 (DRA) went into effect, imaging center operators and radiology group practices have worked with managed care companies. Now, as multiyear contracts expire and managed care companies follow CMS, imaging providers are facing further reimbursement cuts, more bureaucracy, and tougher contract negotiations requiring some practical strategies for managing managed care.
Despite different markets and locations, imaging center operators seem to have similar complaints about managed care companies, and it is more than just tough contract negotiations. For managed care companies, the main issue appears to be how to reduce overutilization and subsequent increased costs.
Jim Palmer, COO of Radiology Ltd, Tucson, Ariz, has more than 20 years of experience in health care management and does not discount that there is overutilization in radiology. However, he disagrees with the way managed care companies are trying to address the problem. “We agree that there’s probably excess utilization. We’d just like to work a little bit more closely with them in trying to identify what studies are appropriate or not, but I’ve never been asked by any one company for that kind of participation.”
Instead, Radiology Ltd and imaging companies across the country seem to be dealing with a common set of complaints:
Red Tape and Inflexibility. Imaging operators believe that their hands are being tied by managed care red tape and inflexibility, mostly attributed to radiology benefits managers (RBMs).
“Benefit management companies have had an impact, no question,” Palmer said. “It’s reduced utilization of some studies, but more importantly, it’s greatly added to our staff. We have a whole department now associated with determining, first, if a patient is eligible for services and, second, to verify the authorization.” He added that these extra steps are necessary because there is no flexibility by the benefits managers for any administrative errors by them or the referring physician. “If we hit the wrong authorization on the wrong insurance, we don’t get paid. It seems that the focus of the benefits management group is to make us jump through as many hoops as they can in order for us to get reimbursed.”
Time Spent on Verification. Another difficulty is the time spent verifying that the right exam is being ordered from the referring physician. With the ever-present scrutiny of self-referral, radiologists are careful not to dictate which type of exam to order, and yet physicians may be unsure.
Mark Grossman, COO of Jefferson Radiology, Hartford, Conn, said, “You have to tell [the RBMs] exactly what exam you’re going to do, and if you don’t do the exam that was preapproved and received preauthorization, they won’t pay. So, it’s a catch-22. We’re in the middle of the insurance company and the referring physician. It’s very challenging.”
Palmer said that the verification process is time and labor intensive for more than just one department. He said, “We’ve got people checking from the time the exam is scheduled until we actually have performed the exam to see if it matches up with the order that was authorized. It’s a tedious process, involving at least three departments: folks in our scheduling office, in our billing department, as well as folks that are on-site, following up.”
Sometimes technologists do not realize the wrong exam has been ordered until the patient arrives and reveals a risk for nephrogenic systemic fibrosis (NSF), for example, requiring a change to a noncontrast study. “It’s extremely difficult to change a [preauthorized] order,” Palmer said. “Our problem is that it’s a disservice to the patient to reschedule, and it’s also a disservice to us because we’ve lost that slot, which we’ll never be able to regain.”
It can be so challenging that Palmer said that his staff must schedule the patients of one insurer as much as 10 days in advance in order to confirm that everything is in place. “That’s certainly not good for patient care,” he said, though the process is expedited for acute situations.
New RBM Networks. Yet another complaint is the recent trend in managed care companies creating new preferred networks through their benefit managers, who undercut existing contracts.
Palmer explained, “The benefit management companies of some providers will offer to do imaging at a lesser dollar. If you’re not part of the network, even though you’re contracted with a particular insurance, these high-dollar exams will be steered away from you because you haven’t joined them.” Palmer has declined these offers because he has seen these new network reimbursement rates be even lower than Medicare’s reimbursement.
Being Treated Like a Commodity. While one imaging provider may buy the latest and greatest CTs and MRIs and have fellowship-trained radiologists and subspecialists, the imaging provider down the block may have much older equipment with general radiologists with no fellowship training.
Imaging companies believe that they should be compensated for these quality differences, but many payors reimburse at the same fees to both facilities, despite any qualitative differences.
“Unfortunately, I don’t think [quality] is recognized by the benefits management people. They tend to view radiology as a commodity. A CT is a CT,” Palmer said.
The above challenges will most likely exist for some time, or at least until there is a major restructuring by the next national health care reform. In the meantime, there are some general strategies and new technology solutions that may help manage managed care.
Lessen the Red Tape Through RBM Software
Self-referral concerns may prevent radiologists from directly helping physicians order the exam, but there are a number of new proprietary and homegrown Web-based solutions that can help referring physicians with ordering and possibly streamlining the paperwork.
In general, these programs take referring physicians through a list of questions about levels of care, making sure the conservative treatments have been addressed before ordering a radiology exam. The program then gives the physicians some type of score or metric about whether an exam should be cleared—or not—or whether further treatment should be considered first. If given the go-ahead, programs typically provide physicians with evidence-based decision guidelines for ordering the correct exam. Best of all, the programs usually incorporate some kind of automatic precertification from a participating insurer or their benefits manager. The authorization is then sent to the imaging facility, and the exam is scheduled.
Medicalis Corp, Kitchener, Ontario, is one proprietary Web-based solution that works with physicians, imaging centers, and RBMs, but there are others. As for cost burden, radiology practices and the referring physicians must work that out between them. Developing a homegrown solution may be initially expensive, but savings can be found in the long run through reducing time and labor, and not losing exam slots through error.
In the Minnesota market, several large insurers, including HealthPartners, Bloomington, and Blue Cross/Blue Shield of Minnesota, St Paul, have recently signed on to working with imaging companies that have an approved proprietary solution or an internally developed program.
You Are Not a Commodity
One reason why managed care companies keep placing pressure on reimbursements is that radiology is increasingly being seen as a commodity. As a result, a practice that has the latest 1.5 Tesla scanner and fellowship-trained radiologists receives the same reimbursement fee as the imaging facility with a .3T magnet and less experienced radiologists. (For the Mayo Clinic’s answer for those who see radiology as a commodity, look at our article, Making Quality the Differentiator in a Flat World.)
To counteract this perception of equality among imaging providers, some radiology practices are now measuring their own performance, hiring quality managers, and becoming accredited by the ACR and/or other prominent accreditation programs. The hope is that if they can show themselves to have high standards, managed care companies will be less willing to make reimbursement cuts, and perhaps even award them a premium for making the investment in high-quality equipment.
CMS is also testing quality with its Medicare Physician Quality Reporting Initiative and Physician Voluntary Reporting Program. Moreover, payors are increasingly mandating that imaging centers have ACR or some other accreditation in order to be on their panels at all.
Palmer’s imaging centers measure their performance in a number of ways, including the time it takes to schedule a patient, waiting room times, exam times, and turn-around times for radiology reports. In addition, he has hired a quality manager who is responsible for implementing these measurements, as well as conducting annual physician surveys and patient surveys. “We believe that if it’s not measured, you don’t get anything done,” Palmer said.
Bigger Is Better
In the age of post DRA, it seems progressively apparent that size does matter. Not only does owning multiple facilities allow imaging companies to achieve economies of scale and reduce their costs, but also their size serves them well at the managed care negotiating table. Grossman said, “I think the larger you are and the broader your market penetration is with a diversified portfolio of outpatient imaging and hospitals, the more leverage you have with managed care to negotiate.”
If a group radiology practice is not large enough to own multiple imaging centers, then radiologists often look to a physician hospital organization (PHO) to negotiate on their behalf. However, PHOs do not exist in many hospitals, and even when they do, some payors refuse to negotiate with them, instead dealing directly with individual groups or imaging operators.
Consequently, if you are currently a small fish in a big pond, negotiating with managed care is just one more reason to consider joining forces with another group practice or similar-sized imaging operator.
Whatever size you are, if you have made efforts to improve and measure your quality and obtain accreditation by the ACR or other respected body, it is important to communicate those accomplishments to your managed care providers throughout the year—not just at the negotiation table.
Grossman said, “We’re constantly in communication with the insurance companies. We’re constantly talking to them about reviewing medical policies and the impact of reimbursement. The key is consistent dialogue. You can’t just show up at contract time and expect to negotiate a win-win agreement. You’ve got to be dialoguing with them throughout the whole year.”
Furthermore, both Palmer and Grossman have given walk-throughs of their facilities to insurance company medical directors and their financial people.
As a result of their quality initiatives and dialogue—and size—Grossman said that he has had success with actually increasing some rates with some carriers, while Palmer reports that he has been able to hold the line on reimbursement cuts.
But Palmer also realizes that managing managed care is only one part of being successful. He said, “We can’t just stay on the rock of quality and say that there’s no way to reduce our expenses. That’s why we have a focused effort in the coming year to look at each process. What does it take to get a patient in and out of here in an efficient manner? Can we identify some opportunities where we can increase our throughput and our productivity?” He also notes that the operation has increased its overall throughput with longer operating hours and other efficiency measures.
Meanwhile, CMS is reviewing its own experiment with measuring quality in four areas:
- MRI Lumbar Spine for Low Back Pain
- Mammography Follow-up Rates
- Abdomen CT—Use of Contrast Material
- Thorax CT—Use of Contrast Material
For more information on this program, go to www.imagingmeasures.com.
Tor Valenza is a staff writer for Axis Imaging News. For more information, contact .