The Dynamics of Reimbursement and High-quality Care

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Access to high-quality patient care is a cornerstone of customer-focused service delivery, Michael A. Silver, PhD, says. In turn, that goal is supported by technology that enhances performance and allows the imaging provider to do more with less. Part of making less go further is maximizing reimbursement through better management, he adds, ensuring that the work performed yields as much as it should. Silver, vice president of Sg2 (a health care research, consulting, and education company based in Skokie, Ill), presented The Outpatient Imaging Market: 2008 Market Update at Beyond™, the Third Annual GE Healthcare Outpatient Imaging Center Conference, in Washington, DC, on July 24, 2008.

imageMichael A. Silver, PhD

In the current environment, health care policy decisions are driven less by clinical considerations and more by political and economic factors, especially as the payment system for health care in the United States becomes less workable, Silver observes. Payors, regulators, and some lawmakers are attempting to resolve distinct issues, rather than address underlying causes, and too few politicians understand the issues. With the subprime mortgage crisis negatively affecting access to capital and the cost of credit, it is little wonder, Silver says, that market pressures are being heavily felt by all imaging providers, yet rising consumer expectations demand attention to performance and customer service.

What is required, Silver advises, is a keen attention to margin and sophisticated management expertise.

“In the near future, the most important ingredient for profitability and survival will be management skills. Just like any other business has to manage margins, outpatient imaging and even imaging in the hospital is going to have to learn to manage its margins.”
—Michael A. Silver, PhD, Sg2, Skokie, Ill

Reimbursement and Regulation

With total Medicare Part B payments for imaging doubling between 2000 and 2006, regulators want the growth of imaging to parallel the growth in overall health care costs, Silver notes, and because of that, both regulators and payors are playing multilevel strategies to control imaging growth. Strategies are likely to become more granular and include removing incentives for self-referral, requiring site accreditation, bundling payments for episodes of care, expanding radiology benefit management programs to Medicare, cutting reimbursement for fast-growing applications, and reducing professional payments. For example, the Government Accountability Office has recommended the use of imaging preauthorization and utilization controls by CMS. Although the ACR opposes the recommendation, Silver is not sure that it will prevail.

The Medicare Improvements for Patients and Providers Act of 2008 supports the ACR position on accreditation for credentialing for imaging providers, creating enormous administrative challenges for the college and the Intersocietal Commission.

It is clear, Silver says, that many payors and regulators simply fail to understand either the technology of imaging or its value. They do not see the impact of new CT applications on patient management, nor do they know that new platforms improve productivity. “There is a huge opportunity for you to work on educating payors on the value of imaging,” Silver advises. “Opportunity also lies in integrating your services with the market needs to drive business and clinical growth. For example if you are in a given market where breast imaging is not being performed terribly well, if you can provide better integrated service you stand a better chance of growing your business. It comes down to having a real strategy for adding value to the market.”

Defining Quality

Performance will be driven by data transparency, with pricing and quality information soon to be made widely available. Providers who are proactive in defining and measuring quality will be ahead of the curve, Silver says. The core definition of quality throughout health care delivery, in the eyes of both payors and referring physicians, is changing to reflect evidence-based practices as more data accumulate, Silver says. Radiation dose is an important quality indicator, and CMS plans to include dose levels for CT and fluoroscopy in the 2008 Physician Quality Reporting Initiative.

“Radiation dose is not just a safety issue or a quality issue; it is going to be a marketing issue, which will translate back into revenue,” Silver says. “It will also become a credentialing