Desperately Seeking Leadership
By Curtis Kauffman-Pickelle

I have visited some 40 radiology practices or imaging center organizations in the past six months, and a recurring theme in the questions that I am asked regarding business strategy relates to the somewhat elusive notion of leadership in this profession of ours. That is, leadership within these organizations themselves at the imaging center level, leadership at the state, regional, and national level from the various societies and organizations that represent the profession, and leadership from those national opinion and thought leaders whom we admire and aspire to emulate.

The bottom line is that we are in a profession under siege while at the same time facing a true leadership crisis. I sense a yearning for true industry leadership, and I intend to focus quite a bit of attention this year on the development and articulation of the type of leadership model that I believe we need in order to inspire, motivate, and challenge this entire profession to rally around a new level of positive activity—legislative, regulatory, payor, business and internal.

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Readers Respond:
Denial, Disbelief, Anger

We have had many readers respond to last month’s editorial on the failure of our elected officials to grasp the malfeasance of the imaging cuts contained in the Deficit Reduction Act and to institute a moratorium. Here, we publish the comments of Kirk Lawson, executive director, River Radiology and Mark Newton, CFO, Hudson Valley Radiologists, who decided to partner last fall on working together to regain some sense of control over their destiny. — editor

Mark and I manage large full-service outpatient imaging centers in the Hudson Valley and are proud of the important services we provide our communities. Our facilities provide outstanding patient care, have large market shares in our respective communities, and are well run. Considering the negative impact these Medicare cuts would have on our practices and staff, and the even more frightening impact these cuts would have on our patients and practices once they get rolled out to private health plans, we decided to regain some control by collaborating together and meeting with our local representatives.

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Legislative Report:
CMS Transmittal Rocks IDTF World

Just as imaging center operators thought they had a handle on the inhospitable reimbursement and regulatory environment for 2007, the Centers for Medicare and Medicaid Services (CMS) issued a last-minute transmittal on January 26 that added significant changes to the 14 new compliance standards independent diagnostic testing facilities (IDTFs) must meet in order to bill Medicare.

The changes, made to the Medicare Program Integrity Manual used by local Medicare carriers to enroll and administer the Medicare program for IDTFs, erects new roadblocks for new or newly purchased IDTFs seeking to image the Medicare population. The scope, extent, and timing of the transmittal took many experts in the imaging field by surprise.

The single-most onerous aspect of the new standards pertains to the instructions to carriers on when an IDTF may begin billing for Medicare patients. Previously, newly enrolled IDTFs could collect retroactively for all Medicare patients imaged from the time their application was received by the local Medicare carrier. Beginning February 26, IDTFs cannot begin billing Medicare until their applications have been approved by the contractor.

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Flying Blind
By Elsa Ozuna-Richards, MSA, CMPE

Many health care providers fall into the trap of spending big dollars on marketing without knowing their customers. A well-structured strategic marketing plan requires a mechanism for identifying the needs and wants of your customers.

Thoroughly understanding the market one operates in is tantamount to the strategic process. Research, as the prelude to strategic planning, supports decision- making processes and financial investments involved in growing a radiology business. Without understanding the market and specific customer demands, the radiology business cannot be effective in truly delivering value to its customers and differentiating itself from competitors. To effectively develop corporate or marketing strategies, there are key segments that require thorough understanding

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More than a Can of Paint:
The Digital Dilemma
By Pamela M. Harlem, MBA

A disturbing trend is clearly visible in the marketplace: too many new imaging facilities are out-of-date by the time they are initially operational. Two key factors can make the best intentions go awry. First, despite the proliferation of PACS, very few health care facility planners have experience with building a new filmless facility once, let alone extensive experience gained from previous trials and knowledge of the latest trends in equipment and clinical care. While filmless is the rule in revitalizing a current footprint or undertaking new construction, the following considerations in designing a digital facility may be news for your planners

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The Year of Utilization Management

While Congress hacks away at imaging reimbursement, radiology benefits management companies are chipping away at volume, and outpatient imaging has a bulls-eye on its side. An article in Managed Care Week reports Blue Cross and Blue Shield of North Carolina will begin requiring prior approval for for non-emergency CT, MRI, magnetic resonance angiography, PET scans, and nuclear cardiology studies performed in all locations this month. In Minnesota—where MRI use is growing at twice the national average rate and CT and PET, three times as quickly—the state’s three largest insurers announced plans to require pre-authorization of outpatient CT, MRI, and PET scans. Medica began its program last month, HealthPartners this month, and Blue Cross and Blue Shield of Minnesota will begin in July.

In addition to controlling imaging costs, utilization management companies are moving into patient-centered services such as measuring radiation exposure and providing patients with provider price transparency, as patient co-pays for advanced imaging can be as high as 20%.

“You can see a swing
[in patients’ out-of-pocket costs]
of $200 to $400.”

— Pat Courneya, MD, medical director,
American Imaging Management

But clearly the primary attraction of RBMs for insurers is the ability to slow the growth of imaging. The North Carolina Blues introduced an RBM program in 2002 that tracked without trying to control utilization, according to the article in Managed Care Week. Between 1999 and 2004, the insurer saw a nearly 160% increase in CT and MRI rates and also recognized wide variation in the cost of services, with CT unit costs ranging from $593 to $1,453.

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The Flat World Imperative

In a world where a radiologist in Bombay can interpret an x-ray from Buffalo, the Mayo Clinic’s Stephen Swensen, MD, maintains that quality is the only way to distinguish a radiology service. In the February issue of Imaging Economics, Swensen makes the business case for quality and describes the Mayo Clinic approach. Why does a continuous quality improvement initiative make financial sense? First, radiology is vulnerable to commoditization not only because of low-cost providers abroad, but it is also threatened from within by teleradiology companies and cross-town competition.

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Illinois Takes Action
in Lease Lawsuit

All players in the imaging space are well-advised to closely scrutinize all lease arrangements on their books. An Illinois lawsuit has targeted eleven MRI companies operating 19 imaging centers—including MIDI LLC, Golf Diagnostic Imaging, Northwest Corporate Imaging and Rand Imaging—claiming that their equipment lease arrangements are an elaborate cover-up for kickback payments to referring physicians. The case was originally filed last February on behalf of the state by the owner of several imaging centers in Illinois, but it gained a higher profile on Jan. 17 when the Illinois state attorney general intervened. According to Benjamin Weinberg, chief of the attorney general’s public interest division, the state will seek an injunction to stop the alleged kickback schemes and pursue restitution and damages related to the insurance payments for the scans.

Federal authorities in Florida are investigating a similar arrangement, and Louisiana lawmakers have notified physicians that analogous leasing arrangements are considered illegal.

>> click on the link below to read the complaint >>

Complaint for Damages, Injunction and other Relief (pdf)