Affordable Care Act: Radiology Payment Models Emerging

This is the first in a four-part series on the Affordable Care Act’s impact on radiology. The second, next week, will address accountable care organizations.

Wheels are already in motion to implement the Affordable Care Act, and radiology - like all specialties - is bracing for change. One of the most significant shifts will be in how providers are reimbursed for their services. However, to date, it’s not clear which one of the many possible payment models will prevail.

For several decades, radiology has received reimbursement through the fee-for-service model, an unbundled payment system that pays for services individually. This reimbursement method has been criticized by leaders both inside and outside radiology for driving up the overall cost of healthcare, as well as pinning emphasis on the quantity of health services rendered rather than the quality.  It’s a system providers are largely comfortable with, though.

“This will be quite a significant shift. Living in fee-for-service has been favorable for radiology, so getting our membership to think differently is a big initiative in the American College of Radiology,” said Geraldine McGinty, MD, chair of the ACR’s Commission on Economics. “However, most radiologists are very much on board, knowing they will be paid differently for different things and that they’ll need to demonstrate value.”

Regardless, she said, change is difficult - especially in the wake of previous reimbursement cuts that have left many providers worrying about paying their bills.

Payment Model Possibilities

Healthcare’s reimbursement system has been overhauled before, most memorably with the emergence of health maintenance organizations, entities that were intended to, but did not, curb expenditures in the long-term. This time around, cost control is again the motive, and it’s gained momentum thanks to healthcare reform, said Keith Chew, a healthcare business consultant with McKesson.

“The move to another payment model has been accelerated by the Affordable Care Act,” said Chew, who specializes in radiology consulting and is the president-elect of the Radiology Business Management Association (RBMA). “And, we know there are certain things that the government is already looking at.”

For example, he said, bundled payment systems - ones that group services usually performed together into one reimbursement amount - are already moving to cover inpatient imaging services within the next two years. CMS is also considering whether to expand the value modifier program currently applied to primary care services to radiology, as well. Under this program, beginning in 2015, practitioners in groups of more than 100 eligible providers are required to submit their 2013 performance data through a physician quality reporting system (PQRS).

According to Charles McRae, chief executive officer for Columbus Radiology Corporation in Ohio, some radiology groups, including his own, are using gain sharing as a reimbursement strategy. If the practice reaches a target set for selected imaging services, it receives a portion of the savings earned by the insurance provider.

“Gain sharing is a reward for good quality and outcomes. If we meet our goals around certain imaging studies, the money saved at the health insurer level, say from Aetna or other companies, comes back to us,” he said. “Working with this system isn’t very intrusive into our daily activities. It’s actually a minor piece of our day.”

Although the industry has been experimenting with bundled payment systems for a longer period of time, a large portion of the reimbursement conversation has turned to the accountable care organization (ACO), a system in which providers share the responsibility for patient care and outcomes, as well as the reimbursement. And the ACR, through its Radiology Integrated Care Network (RICN) is keeping close tabs on how practices and departments nationwide are working within ACOs and the associated payment methods.  

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Already, many practices and groups are participating in utilization management in shared-savings models in the more than 250 ACOs or pioneer ACOs under Medicare’s Shared Savings Plan.  The hope is, she said, that others will see the value in doing so and begin to provide decision support, as well. The fact that radiologists see patients only through referrals could potentially make it challenging for practitioners to receive credit for any cost savings.

In an effort to solve this problem, the ACR’s Harvey L. Neiman Health Policy Institute is partnering with the Brookings Institution to determine what a radiology episode-of-care would look like. In fact, the institute released a policy brief last month, discussing how cost-savings payment models can be implemented without stifling access to specialty care.

Even though the ACO model is the most talked-about payment model, there are still uncertainties surrounding how it would be implemented, Chew said.

“To me, the likely driving factor and force will be the quality metrics that come into play as we move forward,” he said. “The biggest question mark is who will decide the quality metrics. One camp feels it should be decided on a national basis, and others believe that, since healthcare is provided locally, then the vast majority of metrics should be, also.”

For example, certification maintenance and board eligibility should be determined nationally, he said, while turnaround times for reading images could depend on more local circumstances. Whatever the case, he added, it’s incumbent upon radiologists to join - and take leadership roles in - these quality metric conversations.

The Impact of Change

Overall, radiology and its practitioners have fared well under the fee-for-service model. Consequently, it’s likely under any new cost-curbing payment system that many groups might feel some degree of a financial pinch. How well they rebound will depend on how they manage the number of reimbursement denials they receive, Chew said.

Depending on geographic location, a practice can receive a denial for up to 10 percent of its claims due to medical necessity or appropriateness issues, he said. Under a cost-savings model, this denial rate could be severely damaging. But, if practitioners get involved in educating referring physician about the right time to order various studies, practices and departments could see a substantial decline in the amount of work for which they don’t get paid.

“Ultimately, we can see where the impact of a new payment model may not be as drastic as people think it will be,” he said. “But, it’s a transition period, and that means things will be schizophrenic for a while.”

The effect of changing healthcare’s payment system will stretch beyond the bottom line. According to McGinty, it will open the door for radiology to become a more visible player in the care delivery process, as well as their professional environments.

“We already contribute so much to the healthcare delivery system, and as we become more involved with colleagues and patients, we can continue to increase value because we’ll create better patient histories and clinical information,” she said. “We’ll be able to have the conversations with referring physicians about whether they’re ordering the wrong test or the right one because they’ll know and trust us.”

Surviving the Payment Model Change

Although a shift away from the fee-for-service payment model is now a legal mandate, radiologists aren’t relegated to watching from the sidelines how Congress and the CMS implement the law. According to Chew, providers have the power to strengthen the industry’s position during this change. He called it a “raise all boats” philosophy.

[[{"type":"media","view_mode":"media_crop","fid":"15596","attributes":{"alt":"","class":"media-image media-image-right","id":"media_crop_664678420543","media_crop_h":"0","media_crop_image_style":"-1","media_crop_instance":"732","media_crop_rotate":"0","media_crop_scale_h":"0","media_crop_scale_w":"0","media_crop_w":"0","media_crop_x":"0","media_crop_y":"0","style":"float: right; margin: 5px;","title":"Keith Chew","typeof":"foaf:Image"}}]]“I tell all the groups I work with that they have to be better corporate partners with hospitals and health systems,” Chew said. “By working with the facility to improve imaging services, they are able to demonstrate higher quality and value in the market, likely leading to an increased utilization of their services.”

Rather than maintaining an adversarial or purely transactional relationship, radiology and hospitals must work as partners, he said, to transition from the commodity-based, fee-for-service model to one grounded in value-based reimbursement.

To nurture these relationships, radiologists must make themselves accessible to clinicians and technologists. For example, Columbus Radiology Corporation’s McRae said, practices could launch 24-hour call services that are staffed by radiologists who can answer questions from referring physicians in real time.

Radiologists can also individually increase the industry’s influence in payment model decisions, he said.

“Providers must participate in continuing medical education events, they must write white papers, and they must find ways to educate their colleagues about imaging services, such as the circumstances surrounding low back pain that would indicate the need for an MRI,” said McRae, who is also the chair of the RBMA’s new Radiology Integrated Models Task Force. “They must be part of utilization management efforts, and look at how to best partner software packages with their hospital systems.”

Practitioners can also add value by working with hospital administrators to develop algorithms that best support computerized physician order entry systems. Identifying ways to accurately track - and anticipate - a referring physician’s ordering pattern can help control costs and positively impact reimbursement levels.

McGinty also recommended radiologists participate in medical societies for other specialties. These organizations present opportunities to network with other physicians and educate them about the role radiology can play in big strategic decisions. In addition, connecting with the patient is paramount.

“One of the easiest ways to demonstrate accessibility,” she said, “is for radiologists to simply walk into work through the waiting room rather than through the back door.”

ACR’s Radiology Leadership Institute

With the payment landscape around radiology set to change dramatically, the ACR has moved to make sure providers’ voices are heard during budgetary conversations. Through its five-level Radiology Leadership Institute (RLI), the ACR offers radiologists the business and financial knowledge needed to shape the specialty’s future through improved quality and service.

“The institute will give radiologists that basic tool kit of finance and accounting skills that allows them to speak the language of the people who develop budgets for facilities,” McGinty said. “It helps radiologists be credible in these discussions.”

RLI not only teaches radiologists the fundamentals of leadership, but it also gives them ample opportunity to test and hone this new skill set. Practitioners will use this knowledge, she said, to secure a place in discussions around shifting healthcare to a more integrated system. Ultimately, such capabilities will help radiologists side-step being lost in the shuffle and being considered an ancillary service.

“I think it’s really important to keep an eye on the local healthcare arena, as well as what’s happening nationally. The worst thing we could do is to put our heads in the sand and wish we could be back in the fee-for-service model of 2005,” McGinty said. “It’s not going to happen, and it prevents us from embracing a position of being more integrated into the healthcare delivery process. There’s a bright future for specialties that know how to deliver value, but radiology must get better at telling our story to the rest of the healthcare system.”