How Anthem and Medicare control MRI prices

Need An MRI? Anthem Directs Most Outpatients To Independent Centers

By Michelle Andrews
Kaiser Health News, September 26, 2017

Tightening the screws on pricey imaging exams, health insurer Anthem will no longer allow many patients to get MRIs or CT scans at hospital-owned, outpatient facilities, requiring them to use independent imaging centers instead.

Anthem says the change is aimed at providing high-quality, safe care while reducing medical costs.

But critics say that imposing a blanket rule that gives preference to freestanding imaging centers is at odds with promoting quality and will lead to fragmented care for patients.

Imaging tests are generally subject to preapproval by Anthem to confirm that they’re medically necessary. Under the new policy, AIM Specialty Health, an Anthem subsidiary, will also evaluate where they should be performed. Doctors who request non-emergency outpatient MRI or CT scans that can be done at an independent imaging center rather than one owned by the hospital will be given a list of centers eligible for patient referrals.

Hospital imaging is indeed pricier than imaging at freestanding centers. Average prices for MRI and CT scans ranged from 70 percent to 149 percent higher at hospitals, according to an analysis by the Healthcare Financial Management Association, a membership group for health care finance professionals.

But price isn’t the only important variable, and the perception that all imaging studies conducted by qualified providers generally yield comparable results is wrong, (said Leah Binder, president and CEO of the Leapfrog Group).

This is Anthem’s second coverage change this year attracting attention. Earlier, the company came under fire for a new policy under which it will no longer pay for emergency department visits that it determines after the fact weren’t emergencies. That decision raised concerns it could discourage people who might need emergency treatment from  seeking care.

Patient advocates and health care providers have also expressed concerns about the new imaging rule’s potential impact on patients.

Cancer patients who often are being treated at cancer centers within hospitals would feel the effect, noted Dr. J. Leonard Lichtenfeld, deputy chief medical officer for the American Cancer Society.

“They have to go to a new outpatient facility, get the film, get it read and transmitted back to the cancer center,” Lichtenfeld said. If, as often happens, the hospital and the imaging center’s computer systems don’t talk to each other, the patient may have to bring the results back to the doctor on a CD. “For that patient who’s in a lot of stress to begin with, it adds another level of stress,” he said.

Anthem isn’t the only insurer trying to find a way around hospitals’ steeper outpatient imaging costs, said Lea Halim, a senior consultant at the Advisory Board, a health care research and consulting company. The Medicare program is taking steps as well, although its approach doesn’t directly influence patient care in the same way.

In recent years, hospitals have been snapping up independent physician practices, outpatient imaging and testing facilities and then charging Medicare higher hospital outpatient fees for their services. In a bid to equalize payments, in January the Medicare program reduced by 50 percent the amount it pays some hospital-owned outpatient facilities, including imaging centers, that are located away from a hospital’s campus. A further reduction is proposed for 2018.

“So Medicare is doing something that’s in a way very similar to what Anthem’s doing,” Halim said.


CMS Finalizes Hospital Outpatient Prospective Payment System Changes to Better Support Hospitals and Physicians and Improve Patient Care, November 1, 2016

Focusing Payments on Patients Rather than Setting

CMS is finalizing policies to implement section 603 of the Bipartisan Budget Act of 2015, which requires that certain items and services furnished by certain off-campus hospital outpatient departments will no longer be paid under the OPPS beginning January 1, 2017. Currently, Medicare pays for the same services at a higher rate if those services are provided in a hospital outpatient department rather than a physician’s office. This payment differential has provided an incentive for hospitals to acquire physician offices in order to receive the higher rates. This acquisition trend and difference in payment has been highlighted as a long-standing issue of concern by Congress, the Medicare Payment Advisory Commission, and the Department of Health and Human Services Office of Inspector General. This difference in payment also increases costs for the Medicare program and raises the cost-sharing liability for beneficiaries.

This final rule with comment period describes which off-campus hospital outpatient departments are subject to this requirement and which items and services are “excepted” from application of these payment changes and will continue to be paid under the OPPS.

CMS is issuing an interim final rule with comment period (IFC) in conjunction with this final rule with comment period to establish new payment rates under the Medicare Physician Fee Schedule (MPFS) for the items and services provided by certain off-campus provider-based departments for CY 2017.

These new interim final rates being adopted in the IFC will permit hospitals to be paid for the furnishing of items and services that may no longer be paid under the OPPS, and we believe will reduce incentives for hospitals to acquire independent physician practices and convert the same service into more highly paid OPPS services.



By Don McCanne, M.D.

Prices charged for MRI scans in hospitals and outpatient departments are higher than those charged in freestanding facilities. Both Medicare and the private, for-profit insurer Anthem are taking measures to correct this imbalance. Health care consultant Lee Halim says that “Medicare is doing something that’s in a way very similar to what Anthem’s doing.” But are they really similar?

The problem to be addressed is that the prices are too high. What is not a problem is the location of the facility. Hospital and outpatient facilities are located conveniently, enabling them to provide services integrated with the mothership.

Obtaining MRI scans in unrelated freestanding facilities can be disruptive. Imagine a patient receiving outpatient care in a cancer center having to go across town to obtain an MRI from a radiologist that is not part of the integrated team. Imagine the confusion as to the precise imagining features desired, the transfer of the images to incompatible equipment, and the communication difficulties between the patient’s cancer team and an outsider. Yet this is Anthem’s solution to obtaining lower prices.

What does Medicare do? It does not change the location, but rather it uses administered pricing to reduce the costs to appropriate levels. As the Medicare release states, they are “focusing payments on patients rather than setting.”

Medicare made these patient-friendly changes almost a year ago, and now Anthem is following through in the most patient-unfriendly manner - disrupting health care to save a buck.

There really is a difference in the patient service culture of our Medicare program and the strict business ethic of the for-profit insurers, not to mention that Medicare is providing us with a better deal anyway.

Medicare still doesn’t have everything quite right, and that is why we need an improved Medicare. But then we’ll have a program that will be nearly ideal for all of us, and one that we can afford.

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