How Managed Care Targets Imaging Centers—and How to Fight Back

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With the cost of advanced imaging technology always on the rise and reimbursement continually declining, now, more than ever, it is crucial that imaging centers negotiate optimal managed care contracts. Unfortunately, managed care is currently targeting imaging centers, owing to concerns about overutilization and escalating costs. How can imaging center businesses emerge from negotiations unscathed?

To put it bluntly, imaging centers cannot afford to accept managed care negotiators’ opening offers. Contracts must reflect the realities of doing business in the post-Deficit Reduction Act market, including the price of advanced technology, high staffing costs, the need to remain profitable, and, ideally, the fiscal flexibility to grow the business through new partnerships and ventures. Center negotiators must arm themselves with a new set of negotiating tactics in order to engage effectively with payors.

The Campaign

As the cost of outpatient imaging exceeds $100 billion annually, increasing at a rate of around 20% a year, managed care organizations have an incentive to target imaging providers, and they are attacking imaging centers on all fronts: pay for performance, tiered networks, radiology utilization management, and accreditation are all platforms that, sensible as they may sound, work in service of the company’s interests—not the imaging center’s.

Pay-for-performance programs ostensibly provide financial incentives to radiologists for meeting specific benchmarks in terms of quality, satisfaction, efficiency, and patient safety. In reality, they put imaging centers at a disadvantage by creating the optimal circumstances for tiered network arrangements, under which patients are given incentives to visit imaging centers with cheaper copayments (that is, imaging centers with highly rated radiologists).

When radiologists are rated well for efficiency, patient care and equipment quality sometimes fall by the wayside. The simple truth is that these managed care ratings are often only a reflection of the cost billed per CPT code and do not reflect quality of equipment, training of the radiologists, or skill of the technologists. As a result, they can serve to direct patients to lower-cost centers that may be unable to produce a diagnostic scan; this can lead to having scans redone at another facility or to unnecessary surgeries or other invasive procedures.

Early operational examples of this tiered network arrangement include the Aexcel program (Aetna, Hartford, Conn) and CIGNA Care Network (CIGNA Healthcare, Philadelphia). Blue Cross/Blue Shield (BCBS), Chicago, offers tiered networks in California and Washington, and the Massachusetts Group Insurance Commission introduced the Select and Save plan.

Accreditation is another potential landmine. Some insurers—including BCBS and Highmark Blue Shield—require imaging centers to obtain credentialing or certification to be part of their networks. In the case of Highmark Blue Shield, all providers of diagnostic imaging services performed outside of a hospital setting have been required to adhere to new privileging guidelines for two years now.

Again, on the surface, it sounds harmless enough, even advisable. What Highmark requires of its network, though, goes beyond reaching professional benchmarks: centers must be open 40 hours per week, one weeknight until 8 PM, and two Saturdays per month for at least four hours; they must always have an on-site radiologist available; five modalities are required at each location; and PET is only permissible in hospital settings.

Accreditation was just phase one for Highmark, which, in subsequent years, enacted utilization-management measures including requiring providers ordering outpatient, nonemergency advanced imaging tests to provide notification when they order certain MRI, CT, and PET examinations. Highmark providers must also request preauthorization when ordering selected advanced diagnostic imaging procedures. The hazards of utilization management gone awry are well known to the imaging community: channeling to lower-cost centers, scan brokering, and administrative denials, including contrast denials and retrospective denials.

What can imaging centers do to fight back? They must be ahead of the curve on credentialing, watch for the early signs of tiered networks, and develop a strategy in advance. They must foster relationships with referring physicians, work to gain market strength, and, of course, negotiate excellent