If you were among those closely listening in on site-neutral reimbursement news in Fall 2018, you heard the near silent bombshell dropped on the radiology industry. Imaging reimbursements were shaken to the core when UnitedHealthcare ever so quietly announced that as of January 1, 2019, they would be adding a new site-of-care review to their pre-authorization process for MRI and CT imaging. Under this policy, outpatient MRI and CT imaging sent to hospital departments receive an additional review for medical necessity and may not be covered under commercial plans.
While these guidelines may feel aggressive to some, it’s business as usual for others. For more than a decade, payers have deployed strategies to steer patients needing MRI and CT imaging to lower cost providers, with the help of RBMs (Radiology Business Managers) deploying clinical decision support and pre-authorization. More recently, the shift has been from patient/member to provider – specifically, hospitals.
Here’s the timeline leading up to today:
- Medicare’s Site-Neutral Payment Policy requires any new HOPD built after November 2, 2015 (with few exceptions) to be paid under a physician fee rather than HOPPS payment methodology – a 60% reduction.
- Anthem’s 2017 expanded Place-of-Service Guidelines within its clinical decision support system launched a new level of action targeting outpatient MRI and CT imaging done in hospital in- or outpatient departments.
- UnitedHealthcare’s Site-of-Care Medical Necessity introduced guidelines to its outpatient MRI and CT pre-authorization process – for hospitals only. The new policy went into effect nationwide January 1, 2019.
Demonstrated by the evolution from late 2015 to today’s imaging marketplace, payers are now targeting patients and their providers—including hospitals—with more aggressive cost-reduction tactics than we’ve ever seen before. Point being; this is not new, it’s just more widespread. UnitedHealthcare was actually the third major payer to institute changes related to hospital outpatient reimbursements (which also include Anthem’s policy change and CMS’s HOPPS rate reduction). Faced with our current reality, what we know is this: system leaders must make a choice*.
- Protect current reimbursements: Stay away from off-campus investments, steer patients toward the hospital and hope independent competitors do not take any market share.
- Focus on meeting the demands of payers and patients: Invest in lower-priced outpatient settings while focusing on cost management to preserve sustainable margins.
- Work on a hybrid approach: Work with payers to retain hospital outpatient volumes through contract negotiations, while exploring freestanding imaging options alone or in partnership.
Where does your leadership team stand?
*In 2018, Advisory Board contended that hospitals must choose between the first two options, above. As a partner to hospitals across the country, Alliance Radiology sees a third option at play.