CT, MRI Payments Plummet at Private Practices

In January 2020, the Journal of the American College of Radiology published the results of a study which concluded that Medicare reimbursement to both non-radiologist physicians (NRPs) and radiologists for their in-office MRIs and CT scans has decreased significantly since 2006.

The researchers analyzed data they obtained from the U.S. Centers for Medicare and Medicaid Services (CMS) Medicare Part B master files from 2004 to 2016. They used the specialty billing codes for MRI and CT and the place-of-service codes to identify payments made to private offices.

Payments to NRPs for 2016 were less than one-third what they were in 2006. Cardiologists were paid the most, followed by primary care physicians, internal medicine specialists, urologists, and medical oncologists. Orthopedists were the highest paid group of NRPs.

As for radiologists, payments have also continued to diminish for their in-house MRIs and CTs. Payments for 2016 were almost half what they were in 2006.

The researchers noted there were limitations to their study:

• NRPs often have side-agreements with radiologists who they ask to interpret the results. The database could not capture payments made pursuant to these side agreements.
• There is possible confusion about independent diagnostic testing facilities (IDTFs). These entities are not related to hospitals or doctor’s offices. They are owned and operated by individual entrepreneurs or companies. Under Medicare reimbursements, IDTFs are considered a “medical specialty, not a place of service.
• There is confusion about how to categorize “hospital-based specialists” such as pathologists, psychiatrists, and hospitalists. This group is one of the six physician groups that receives the highest payments for ownership of MRI units even those these groups are not generally associated with MRIs.

Self-Referral of Medical Imaging is Abating

Laws passed in the 1980s made it illegal for physicians to refer patients to imaging centers in which the doctor had a financial interest. A loophole in the law called the “in-office ancillary services exception” (IOASE) allowed physicians to refer patients for imaging studies if they had CT and MRI scanners in their own office even if diagnostic imaging was outside the scope of their regular practice.

Many studies indicate that the ability of physicians to self-refer patients for imaging studies resulted in increased utilization with a great potential for overuse and inappropriate imaging as opposed to physicians who refer patients directly to radiologists. Some insurance companies, for example, Anthem and United Healthcare are now declining to pay for nonemergent imaging examinations at hospital outpatient departments and are now pushing for patients to be treated at freestanding imaging c

This trend in insurance reimbursement strategy may push imaging services back to private radiologists. It is a trend the researchers suggest should be followed.

The payment reduction for imaging seems to have inspired NRPs to close their private imaging office resulting in the merging of these facilities into hospital outpatient imaging departments.

Takeaways From the Research

The researchers summarized their findings by identifying five “Take-Home Points.”

1) Since peaking in 2006 and again in 2008, payments to private offices for MRI and CT have drastically declined.

2) NRP specialty groups with MRI ownership who received the highest MRI payments through the years are orthopedists, neurologists, primary care physicians, and hospitalists.

3) NRP specialty groups with CT ownership who received the highest CT payments through the years include cardiologists, primary care physicians, internal medicine specialists, urologists, and medical oncologists.

4) The decline of payments to NRPs indicates that self-referrals for imaging studies are declining which many believe is a change to the health care system that is positive.

5) Recent changes in coverage by commercial insurers indicate that payments to private offices for MRIs and CTs may rebound.

According to Dhruv Chopra, Chief Executive Officer of Collaborative Imaging, “We will continue to offer innovative solutions. By streamlining operations our radiologists will be allowed to maintain their independence and flourish in spite of reimbursement cuts.”