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Rachel Grande
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A 8 minute read
doctor holding up sheet of brain scan images in front of MRI machine
September 11, 2017

Updated April 2020

In 2017, Indianapolis-based health insurance provider Anthem, Inc. — a Blue Cross Blue Shield company—made headlines when it announced changes to its reimbursement policy for diagnostic imaging scans. The new policy encouraged patients to visit freestanding imaging centers for their MRIs and CT scans by removing coverage for non-emergent imaging services performed at all hospital-owned facilities.

The changes were made as part of a cost-cutting program intended to reduce expensive out-of-pocket payments for hospital imaging services, which can sometimes cost patients hundreds—or even thousands—of dollars more than scans at a freestanding imaging center. By early 2018, the program was rolled out to all but one of Anthem’s 14 member states and impacted as many as 4.5 million Anthem customers.

Anthem’s outpatient imaging policy receives backlash from hospitals

Despite the insurer’s praiseworthy intention of making MRI and CT scans more affordable for patients, hospitals initially raised concerns about the changes to outpatient imaging reimbursements. Why? In large part because imaging services provide significant hospital revenue.

Historically speaking, many hospitals have relied on revenue from imaging services to make up for lost revenue in other departments or to offset lower Medicare and Medicaid reimbursement rates. Some hospitals, reportedly, have received as much as half of their overall profits from imaging services.

With this new policy in place and other cost-cutting measures being implemented throughout the healthcare industry, hospitals became increasingly concerned about their ability to maintain financial health.

Many facilities also questioned how the restrictions around MRI and CT scans at hospital-owned imaging centers would impact their care delivery. In cases where a scan is required but deemed non-emergent, a physician would instead be directing their patient to eligible freestanding imaging centers in order to receive their scan. Some worried that this process would create inconvenience for the patient and would disrupt care coordination at the hospital.

Value-based care impacts growth in the outpatient market

Though Anthem’s new policy was a seemingly radical one, it came at a time when the U.S. healthcare industry was already beginning to move away from traditional fee-for-service payment models and transition to a value-based care system.

When Anthem announced the policy change in 2017, providers had just begun reporting their quality, cost, and interoperability performance to the Centers for Medicare and Medicaid Services (CMS) as part of a new quality payment program. This program, called the Merit-Based Incentive Payment System (MIPS), set in motion many of the healthcare industry trends that we’re just now beginning to see—including growth in the outpatient market.

Many different factors have influenced this growth in the outpatient market, but lower costs are a driving force. For this reason, the number of imaging centers in the U.S. has more than doubled since 2015.

Map of freestanding imaging centers in the U.S.

2020 map of active freestanding imaging centers across the u.s.
Fig 1 This map is a screenshot from the Definitive Healthcare Imaging Centers database. Map shows clusters of all 10,126 freestanding imaging centers across the United States by imaging center type, including: portable x-ray (red), independent diagnostic testing facility (yellow), mammographic screening center (pink), and clinic/center (green). Accessed April 2020.

According to Definitive Healthcare data, there are currently 13,258 imaging centers across the United States. Of those, more than 10,000—or 76 percent—are freestanding imaging centers not part of a hospital or other facility.

The success of these outpatient facilities is not only due to their lower operating costs. Many people find imaging centers to be a faster, more convenient alternative to in-hospital scans. This efficiency is due, in part, to the singular nature of these facilities. With one function to perform and sufficient resources to carry it out, outpatient imaging centers can complete patient scans more quickly than a busy hospital.

Top 10 imaging centers by total number of procedures in 2017

Rank Imaging Center Name Definitive ID State Total Medicare Payments Total Number of Procedures
1

Gamma HealthCare - Tyler

939618

TX

$3,733,349

1,492,361

2

Northwell Health Imaging at the Center for Advanced Medicine

580609

NY

$22,250,117

1,481,129

3

Gamma HealthCare - St Louis

939613

MO

$2,387,356

889,587

4

Mayo Clinic Health Systems - Gate Parkway Primary Care Center

931821

FL

$5,969,096

614,156

5

Wisconsin Health Fund Medical and Dental Center - Mammography

935000

WI

$2,907,284

441,793

6

Saint Francis Imaging Center

580461

OK

$5,170,288

425,668

7

Carolinas Imaging Services - Huntersville

580246

NC

$1,752,380

337,797

8

Mayo Clinic Building - Scottsdale Diagnostic Imaging

1003868

AZ

$3,086,667

309,793

9

Cotton Oneil Garfield Clinic

1005374

KS

$3,902,163

291,626

10

Southwest Diagnostic Imaging Center

803325

TX

$1,764,279

258,351

Fig 2 Information available on Definitive Healthcare’s Imaging Centers database. Data is sourced from the CMS Public Use File (PUF) for the 2017 calendar year, the most recent available. Data for the 2018 calendar year is scheduled to be released in July 2020. Accessed April 2020.

More than that, continuing advancements in radiology and diagnostic imaging make it faster and easier for physicians to diagnose, understand, and treat a variety of health conditions.

Artificial intelligence is one area that has been offering considerable improvements to the field of diagnostic imaging. Many AI-powered solutions are increasing efficiency by triaging and identifying high-priority patient scans, and some even diagnose certain diseases and conditions with up to 99 percent accuracy.

Learn more

In an industry that’s constantly changing, new policies like the one that Anthem announced in 2017 or other adjustments to reimbursement rates can impact healthcare providers in a variety of unpredictable ways. In spite of these things, hospitals have adapted to new protocols and continued to evolve as further cost-cutting measures and value-based initiatives were put in place.

To learn more about how your peers in the industry are responding to these changes, watch our on-demand webinar about the impact of value-based care adoption in high-cost specialties.

One of the webinar panelists, Dr. David Rosman, speaks about his experience with value-based care as a service chief of outpatient imaging at Massachusetts General Hospital.


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