It’s that wonderful time of the year when the medical imaging community unwraps its package from the Centers for Medicare and Medicaid Services (CMS of Washington DC) and learns what’s in store for them for the next year.

To date, certain geographical pockets have made out comparatively well. Reimbursement tends to be higher in the Northeast and Texas than in other parts of the country. And reimbursement for single-source providers in rural areas is reasonably healthy. Thomas Dehn, MD, chief medical officer of National Imaging Associates (Hackensack, NJ), says single-source providers can name their own price because there’s no competition.

Despite these highlights, radiologists and administrators are invariably disheartened and disappointed by their paltry CMS bounty. Gerald Kolb, president of Breast Health Management Inc (Bend, Ore), explains, “There is a growing perception among radiologists that whenever they gain in one area of reimbursement, they lose in another.”

The (Sad) State of Breast Imaging Reimbursement
Are radiologists correct in their assumption? Perhaps. Consider mammography, which continues to stand out as a reimbursement disaster site. “Mammography continues to be underreimbursed,” Kolb says. “The APCs are still far too low and don’t adequately reimburse hospitals for the technical portion of the exam.”

Dehn concurs and adds, “Mammo-graphy is grossly underpaid. A good radiologist can read a brain MRI faster than a mammogram, and yet reimbursement for a brain MRI is 12 times the amount of a mammogram.”

To add insult to injury, sites across the country have reported problems receiving payment from Medicare for full-field digital mammography and CAD. In some cases, Medicare has denied payment for full-field digital and CAD. Kolb says Medicare usually corrects the problem and pays for the exams, but it creates an extra burden on the health care provider.

In one sense, digital mammography has fared better than analog. Nationally, the rate for screening analog mammography sits at $82.77; the corresponding national rate for a full-field digital mammogram is approximately $132. Most of the difference, however, is on the technical side; radiologists receive less than one additional dollar per digital mammogram. Presumably the increased payment for digital mammography rewards hospitals for their hefty capital investment in digital technology. Unfortunately, some radiologists suspect that analog mammography may have seen a healthier increase if digital had not reaped its relatively generous allotment.

While the digital and analog camps may continue to wage their battles, there is a consensus that some breast imaging technologies are decently reimbursed. Jim Clayton, medical imaging research analyst for Frost and Sullivan (San Jose, Calif), says CAD for mammography procedures has fared well under current reimbursement schemes.

Reimbursement was first introduced for CAD in 2001 at a rate of $15. Today, that rate stands at about $19 nationally. Clayton says the increase in rates provides a powerful economic incentive for providers to adopt CAD. In some parts of the country, CAD has already become the standard of care. And when Kolb looks into his crystal ball, he sees CAD becoming the standard of care nationally. This, of course, has reimbursement implications.

Kolb predicts, “At some point in the future, CAD and mammography will be tied together. The mammography rate will be adjusted up to include CAD. There won’t be separate CAD and mammography rates.” In fact, some managed care organizations have taken this position and pay a single rate for CAD and mammography. Regardless of whether mammography and CAD are eventually linked together, the good news is that many private payors have accepted CAD and do reimburse for it.

Other news in breast imaging is at least somewhat heartening. Breast MRI is being used and reimbursed more frequently; 3D breast MRI reconstructions are also reimbursed under CPT code 76375. Screening breast MRI is reimbursed for women with the BRCA 1 or 2 genes. And, ultimately, CMS may be forced to open the doors to screening breast MRI for other high-risk women.

However, before screening breast MRI reaches CMS review, there is another hurdle to cross—screening breast ultrasound. Currently, CMS pays for breast ultrasound only when there is an indication for it. However, research is beginning to show a substantial yield in the number of cases when screening breast ultrasound is used in conjunction with screening mammography in patients who have dense breast tissue. This has created some demand for screening ultrasound among patients. Kolb points out, “The cost per life-year saved with screening breast ultrasound is relatively inexpensive.” He predicts, “We will see discussions about how to reimburse for screening breast ultrasound.”

On the Brighter Side–PET Reimbursement
Mammography is, without a doubt, something of a reimbursement horror story for radiologists and administrators. Fortunately, not all modalities suffer such a tragic fate. Take PET, for example, which has fared quite well since gaining reimbursement. Current approved indications include breast cancer, colorectal cancer, esophageal cancer, head and neck cancer, lung cancer, lymphoma, melanoma, cardiac viability, seizure disorders, and solitary pulmonary nodules. The latest approved indication (as of October 1, 2003) is thyroid cancer.

Still it’s not all good news. CMS did drop the 2003 rates a bit from its 2002 rates and separated the payment for FDG. Payments stand at approximately $1,375 for the PET scan and about $400 for FDG. This move may clear the way for reimbursement of other tracers. Currently, only FDG and rubidium for cardiac imaging are reimbursed.

Of course, the threat of a large cut in reimbursement always looms. But even if CMS snips PET reimbursement, it may not have a negative impact on the market. “With a new modality such as PET, new indications are being approved,” says Monali Patel, industry analyst with Frost and Sullivan. “Reimbursement for PET still seems favorable. Hospitals can break even [on the purchase of a PET scanner] in a reasonable amount of time. When new indications are approved, utilization increases, which may balance out any small decrease in reimbursement.” Drastic cuts, on the other hand, would be disastrous.

And there is an array of possible new indications for PET. Patel says, “Over the next 2 to 3 years, we can expect a few additional indications to be approved every year. New tracers could also open additional doors.” Reimbursement for Alzheimer’s disease, for example, remains a possibility. Patel predicts, “If that happens, it would be huge for PET.”

While the reimbursement future for PET appears bright, prudence is probably warranted. Patel concludes, “Reimbursement for PET has been positive so far, but you always have to be cautious because reimbursement can make or break a market.”

Multimodality and Intermodality Scanning
Some radiologists and advocacy groups are preparing to lobby for dual payments for screening mammography and ultrasound (or MRI). This may be just the beginning of a long-term trend toward intermodality scanning. Kolb explains, “Radiology has a lot of tools in its bag. It’s just starting to figure out how to use them together.”

For example, some companies are beginning to integrate full-field digital mammography and ultrasound. The next challenge will be to figure out how to get paid for them.

That may take some time. After all, CMS has not completely worked out reimbursement for PET-CT, which has been on the market for approximately 2 years. Dehn explains, “Right now, reimbursement for PET-CT is quite scattered. Some plans don’t reimburse at all for the second exam, and some reimburse fully for both.”

This dichotomy stems, in part, from opposing views about the value of fusion imaging. One camp insists there are genuine benefits to fusion imaging. The other side is not as enthusiastic about PET-CT. It actually questions whether the exams are duplicative. Dehn concludes, “The real value of PET-CT remains unproven, and this is a problem for radiologists.” In fact, the American College of Radiology (ACR of Reston, Va) recognizes that relatively little advanced technology is evidence-based.

Ultimately, reimbursement for PET-CT may look remarkably similar to eventual reimbursement for mammography and CAD. That is, in all likelihood there won’t be complete reimbursement for both scans. There will be a modifier to the PET code with some additional reimbursement for CT.

Looking Into the Crystal Ball
Intermodality scanning and its unavoidable reimbursement issues are just one of several items that may cross the CMS’ (and consequently radiology’s) agenda in the next few years. Dehn explains, “Scanning technology has evolved to the point where it takes 4 seconds longer to do an abdominal and pelvic CT than it does to do an abdominal CT, yet reimbursement is generally double.” Naturally, radiologists are well acquainted with this phenomenon. Now, however, people outside of radiology have taken notice of it. The implications are less than rosy for radiology.

Dehn predicts, “Inevitably, there are going to be graduated payments.” This is analogous to certain surgical procedures, such as double hernias, in which the second hernia is reimbursed at half the rate of the first. It is quite likely that radiologists will see a reduction in reimbursement for the technical component for contiguous exams. The professional component should remain steady, however, because radiologists still need to read two studies.

PET-CT is not the only PET issue on the reimbursement radar. Dehn says, “Another issue is the use and value of cardiac PET. The sensitivity and specificity of cardiac PET versus SPECT is marginal. Whether cardiac PET will continue to be a covered benefit is questionable.”

Miserable mammography reimbursement, the prospect of reduced payment for contiguous scans, and the uncertain state of payment for PET-CT and cardiac PET could be enough to bring a radiologist to tears. There are, however, a few bright spots on the horizon. Dehn explains, “Another hot item is reimbursement to nonradiologists for non-OB ultrasound.” For years, radiologists and payors have recognized (and paid for) OB ultrasound completed by obstetricians and other practitioners. In recent years, however, the relatively low acquisition cost of ultrasound has lured some nonradiologists into the field. They’ve picked up an ultrasound system for just about a song and dance and started scanning patients and billing for it. Dehn says, “Their capabilities are clearly in question. There is going to be a long hard look at whether nonradiologists should be reimbursed for non-OB ultrasound.”

The ABCs of Managed Care
Although CMS definitely sets the tone for reimbursement, it is not the only player in the game. Private payors do account for a significant amount of business. Their take on medical imaging may be a bit different from that of CMS. John Swanson, administrator for managed care and reimbursement at Children’s Memorial Hospital (Chicago), explains, “From a managed care perspective, payors have focused very little on imaging at this time. Usually it’s rolled into the outpatient other category.”

For the most part, managed care organizations negotiate multiyear agreements, which allows hospitals and imaging centers more predictability than annual Medicare and Medicaid fluctuations. It also lets them analyze trends by imaging service and payor over time. Fees can then be decided in a fairly rational manner. Still multi-year agreements can be a mixed bag, says Swanson. A contract at 80% of billed charges is great, but the same language with the clause “not to exceed $600” can be disastrous. Swanson concludes, “You have to look at each contract individually and decide.”

This type of vigilance is undoubtedly warranted because reimbursement may be the ultimate measure of a modality’s success. Take mammography, where poor reimbursement is a factor in the number of radiologists and practices abandoning the field. On the other hand, PET operates in a relatively favorable reimbursement environment, which has, in part, fueled the proliferation of PET scanners. Patel attributes PET’s fairly rapid acceptance to advocacy efforts on the part of organizations such as the Society of Nuclear Medicine (Reston, Va). Vendors can also have a positive effect on reimbursement. CAD pioneer R2 Technology (Sunnyvale, Calif), for example, lobbied quite extensively for CAD reimbursement. The result? CAD is fairly reasonably reimbursed.

Whatever the scenario, it pays to pay attention to reimbursement.