Oct 20, 2017 | Digital Pathology, Laboratory Management and Operations, Laboratory News, Laboratory Pathology, Laboratory Testing, Managed Care Contracts & Payer Reimbursement
New study analyzes the dramatic decline in the utilization of imaging diagnostics between 2008 and 2014 and suggests that reductions in imaging use could be the result of changes in federal policy, increased deductibles, and cost-cutting focuses
Anatomic pathologists have experienced sustained cuts to reimbursements for both technical component and professional component services during the past eight to 10 years. But what has not happened to pathology is a 33% decline in the volume of biopsies referred to diagnosis. Yet that is what some studies say has happened to imaging reimbursement since 2006.
Using Medicare data for Part B imaging procedures covering the years 2001 to 2014, researchers at a major university identified that, beginning in 2006, the total reimbursement for imaging procedures declined at a steady rate throughout the following eight years covered by the study. It is unclear what implications the finding of this study of imaging utilization might predict for the utilization of advance anatomic pathology services.
Routine Use of Imaging in Diagnostics is Slowing Down
The research into imaging utilization was conducted at Thomas Jefferson University and published in the journal Health Affairs. Led by David C. Levin, MD, Emeritus Professor and former Chair of the Department of Radiology at Thomas Jefferson University Hospital, the researchers examined imaging data from Medicare Part B (2001-2014) to determine the reason and rate of “slowdown” in routine use of imaging in diagnostics.
The researchers calculated utilization rates for “advanced” imaging modalities and component relative value unit (RVU) rates for all imaging modalities. They determined that trends in imaging rates and RVU rates rose between 2000 and 2008, but then sharply declined from 2008 to 2014. The researchers theorized that the reduction might have been due to changes in federal policy, increasing deductibles, and focus on cost-cutting by hospitals and healthcare providers.
Levin, along with Thomas Jefferson University associates Vijay M. Rao, MD, FACR, current Chair of Radiology, and Laurence Parker, PhD, Associate Professor of Radiology; and University of Wisconsin-Madison statistics Professor Charles D. Palit, PhD, argue that the decrease in imaging orders might reduce diagnostic costs, but also could negatively impact surgical pathologists, radiologists, medical researchers, and patients themselves.
In a Modern Healthcare article, Levin states that the reduction in utilization of imaging and radiology could be a slippery slope leading to decreased access to life-saving diagnostic tools that could leave patients “not getting the scans they probably need.”
What’s Fueling the Multi-Year Decline in Utilization of Imaging and Radiology?
In the Journal of American College Radiology, Levin, Rao, and Parker, attempt to “assess the recent trends in Medicare reimbursements to radiologists, cardiologists, and other physicians for non-invasive diagnostic imaging (NDI).”
Using data acquired from Medicare part B databases, the authors reported that total reimbursements for NDI peaked at $11.9 billion in 2006, but saw a steep decline of 33% to just over $8 billion in 2015. They attribute some of this decline as a result of the Deficit Reduction Act of 2005, which went into effect in 2007, as well as other cuts to NDI reimbursement funding. Reimbursement to radiologists, according to Levin et al, dropped by more than 19.5%, and reimbursement to cardiologists dropped nearly 45% between 2006 and 2015.
Surgical pathologists may see parallels in the total reimbursement for imaging during the years 2002-2015 compared to pathology technical component and professional component reimbursement during those same years. Taken from the Thomas Jefferson University study, the graphic above shows “total Part B payments for non-invasive diagnostic imaging to all physicians under the Medicare Physician Fee Schedule, 2002 to 2015. Vertical axis shows billions of dollars. The abrupt decline in 2007 was due to the Deficit Reduction Act. The declines in 2009, 2010, and 2011 were due largely to code bundling in, respectively, transthoracic echocardiography, radionuclide myocardial perfusion imaging, and CT of the abdomen and pelvis.” (Caption and image copyright: Thomas Jefferson University.)
In different Journal of American College Radiology article, Levin and Rao outline their concerns over another suspected cause for the decline in imaging utilization—the American Board of Internal Medicine Foundation (ABIMF) Choosing Wisely initiative.
According to Levin and Rao, the Choosing Wisely initiative was intended “to reduce the use of tests and treatments that were felt to be overused or often unnecessary.” Imaging examinations were included in the list of tests that were deemed to be “of limited value” in many situations. Levin and Rao suggested that there might have been a need to curtail testing pushed by payers, policymakers, and physicians at the time, but that the Choosing Wisely initiative could have added to a decline in imaging testing spurred on by the confusion physicians felt when attempting to access unclear scenarios and recommendations for the 124 imaging tests listed.
Imaging Decline Could Have Unintended Consequences for Providers and Patients
In a Radiology Business article, Levin outlined some of the unintended consequences facing healthcare due to the reduction in imaging utilization. He states that “private imaging facilities are starting to close down” and “MRI and other advanced imaging exams are beginning to shift into hospital outpatient facilities.” He predicts that the shift from private facilities to hospital facilities could cause imaging costs to increase for customers and healthcare providers.
Levin suggests that Medicare could “raise the fees a little and make the private offices a little more viable.” The profit margins, Levin argues, “are so low right now that you basically can’t run a business.” Medicare as a program might be seeing huge savings, Levin notes in several articles, but physicians, laboratories, and patients are feeling the pinch as a result.
In an interview with Physicians Practice, Rao echoed Levin’s concerns. “Policy makers lack understanding of the value of imaging and spectrum of the services provided by radiologists,” he declared. “On an institutional level, under the new payment models, radiology is transitioning to a cost center and radiologists often don’t have a seat at the table.”
Rao points out that this devaluing of radiologists’ work affects not only healthcare facilities, but patients themselves. Radiologists provide “major contributions to patient care by making accurate diagnoses, and doing minimally invasive treatments given many technological advances leading to appropriate management and improved outcomes,” he argues. How long before Pathology follows a similar track?
Balancing Cost and Quality in Testing Without Sacrificing Patient Needs
The fear seems to be that the push to lower costs by eliminating unnecessary imaging is inhibiting radiologists and diagnosticians from providing necessary imaging for patients. And that delaying diagnoses affects the ability of healthcare providers to provide adequate and timely patient care. Rao suggests, however, that physicians’ use of medical imaging could simply be evolving.
“There were other factors that also helped limit the rapid growth, such as greater attention by physicians to practice guidelines, concerns about radiation exposure to patients, and the Great Recession of 2007 to 2009,” Rao noted in a Thomas Jefferson University news release. “However, we expect that additional changes, such as the advent of lung cancer and other screening programs, and the use of computerized clinical decision support, will continue to promote and support appropriate use of imaging technology.”
The drive to reduce healthcare expenditures should not be dismissed. We may soon see parallels in the rise and fall of imaging utilization for genetic testing, surgical pathology, and other new and expensive clinical laboratory technologies as policymakers attempt to balance increased spending against the clinical value of these diagnostic tools.
— Amanda Warren
Related Information:
The Overuse of Imaging Procedures on the Decline Since 2008
After Nearly a Decade of Rapid Growth, Use and Complexity of Imaging Declined, 2008–2014
Reducing Inappropriate Use of Diagnostic Imaging Through the Choosing Wisely Initiative
The Recent Losses in Medicare Imaging Revenues Experienced by Radiologists, Cardiologists, and Other Physicians
Five Minutes with David C. Levin, MD: Outpatient Imaging Cuts and Unintended Consequences
Ten Questions with Vijay M. Rao, MD, FACR
Diagnostic Imaging Transitions from Volume to Value
Imaging Use Plunges as Coding, Reimbursement Tightens Up
Has the Time Come for Integration of Radiology and Pathology?
Reference Pricing and Price Shopping Hold Potential Peril for Both Clinical Laboratories and Consumers
Sep 13, 2017 | Coding, Billing, and Collections, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing
While multiple studies show reference pricing is an effective approach to reduce the cost of testing and procedures, medical laboratories and consumers alike must continue to focus on quality to ensure positive outcomes
The Dark Report in its September 2016 issue highlighted how reference pricing is positioned to become one of the biggest contributors to price erosion medical laboratories and pathology groups have faced in more than a decade. The issue featured details of a 2016 study published in JAMA Internal Medicine outlining how Safeway’s use of reference pricing for clinical laboratory tests decreased laboratory spending for itself and employees by 32% between 2011 and 2013—a total savings of more than $2.5-million.
That issue of The Dark Report also highlights a similar use of reference pricing by CalPERS (California Public Retirement System) that involved hip and knee replacement surgeries. CalPERS saw a 30% reduction in the cost of these surgeries after 12 months.
These highly publicized efforts have fueled interest in how reference pricing might work for other businesses, insurers, and the US government. The 2014 Protecting Access to Medicare Act (PAMA) is already collecting private payer rates paid to laboratories for tests. This data will then be used to create new rate-based fee schedules in 2018.
Speaking with Joseph Burns, Managing Editor of The Dark Report, about the outcome and potential rise of reference pricing, study author James C. Robinson, PhD, of University of California Berkeley noted that, “Any discussion about how to contain inappropriate healthcare utilization is challenging. By contrast, significant price variation is the low-hanging fruit. Employers would much rather save money by having patients travel to cheaper clinical labs than get into some esoteric discussion about whether a clinical procedure is appropriate or not.”
Quality is Key to Both Avoiding Price Erosion and Improving Patient Outcomes
There’s no question that reference pricing has forever changed the landscape of clinical laboratory pricing. Paired with increased pricing transparency and easier access to pricing information through platforms such as Castlight Health, Healthcare Blue Book, and Change Healthcare Corporation, consumers and businesses can quickly compare prices across a range of service providers.
However, in April, Leah Binder, President and CEO of The Leapfrog Group, published an article in Forbes that highlights the potential downsides to price shopping for laboratory testing and medical care.
“Differences among providers in quality can eliminate any cost advantages,” stated Binder in the Forbes article. “Some purchasers assume they can get around this problem by targeting reference pricing only for procedures that don’t vary in quality. When quality is all the same, decisions can pivot on price alone. Unfortunately, no such procedures exist. Extreme variation is the hallmark of our healthcare system.”
As reference pricing continues to force more consumers to shoulder a portion of medical laboratory testing costs, prices for more expensive laboratories are likely to continue eroding unless they can convince consumers that their services are higher quality or produce better results. (Graphic copyright: California Public Retirement System.)
Binder cites a study in Spine Journal’s April 2017 issue regarding diagnostic error rates for magnetic resonance imaging (MRI). The study involved a 63-year-old woman seeking relief from low back pain. Over a three-week span, she received 10 different scans. These scans resulted in 49 different findings. Of these findings, none were repeated across all 10 scan reports provided to her physician.
“As a result,” the study’s authors concluded, “where a patient obtains his or her MRI examination, and which radiologist interprets the examination, may have a direct impact on radiological diagnosis, subsequent choice of treatment, and clinical outcome.”
Binder reinforced this, stating, “Purchasers should still pursue reference pricing and try to incorporate considerations of utilization and quality to the extent they have the data. Never assume any procedure is like a commodity—largely the same quality everywhere.”
High-Cost Medical Laboratories Likely to Face a Decision Between Volume or Price Erosion
A 2016 study by Health Care Cost Institute found the average pricing of 240 common medical services varied by as much as 200% between states. Within states, prices fluctuated as much as 300%.
Thus, for pathology groups and medical laboratories in the upper percentiles for their region, referencing pricing is likely to impact volume. Even if adoption of reference pricing by payers or self-insured business groups remains stable, price cuts due to PAMA loom on the horizon. As reported by Dark Daily in December 2016, price cuts to the Part B clinical laboratory fee schedule could add up to $400 million in reduced Medicare payments in 2018 alone.
This is particularly troublesome for hospital laboratory outreach programs, where Medicare patients commonly represent 40% to 70% of outreach lab volumes. The combination of reduced volume and reduced Medicare pricing could have dire financial consequences.
It will remain essential for medical laboratories to differentiate their services from those of lower-cost competitors to avoid volume and price erosion. Continuing to optimize test utilization, improving laboratory efficiency, and emphasizing the value of services rendered will help to further strengthen lab positions and reduce the impact of coming change.
—Jon Stone
Related Information:
Price Shopping Could Cut Employer Health Costs by 20%, but There’s a Catch
Variability in Diagnostic Error Rates of 10 MRI Centers Performing Lumbar Spine MRI Examinations on the Same Patient Within a 3-week Period
The Striking Variation of Commercial Healthcare Prices
Some States Pay Twice the Price for Health Care, Finds New Report
Association of Reference Pricing for Diagnostic Laboratory Testing with Changes in Patient Choices, Prices, and Total Spending for Diagnostic Tests
Coming PAMA Price Cuts to Medicare Clinical Lab Fees Expected to Be Heavy Financial Blow to Hospital Laboratory Outreach Programs
Volume XXIII No. 12 – September 6, 2016
Consumers Now Use Medical Cost Websites to Price Shop for Clinical Pathology Laboratory Tests and Other Medical Procedures
Jun 30, 2017 | Laboratory Management and Operations, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
Researchers note medical laboratories uniquely qualified to help doctors optimize lab test utilization, and to educate physicians on testing trends and improvements
Automation and informatics have revolutionized the modern medical laboratory. These same technologies also are powering the next generation of healthcare through precision medicine, genomics, and an increased ability to assess and leverage population health trends. In fact, exciting work is being done to use these technologies to help physicians and clinical laboratory professionals better work together.
When it comes to how physicians order and use medical laboratory tests, changing their long-standing habits can be a lengthy process. By using dedicated systems to define proper lab test usage, track lab orders and patient outcomes, and share data between clinical laboratory and healthcare environments, pathologists, medical laboratory scientists, and physicians could seamlessly access the knowledge needed to improve decision making.
Low-Value versus High-Value Care Ordering
Research published recently in the Journal of the American Medical Association Internal Medicine (JAMA Internal Medicine) investigated the order rates and utilization of low-value medical laboratory services and other diagnostic tests associated with headaches, respiratory tract infections, and back pain.
Their findings indicated that physicians in hospital-based practices ordered more “low-value care” than physicians in community-based practices. According to the research, low-value care includes:
The researchers found similar patterns in specialty referrals when comparing hospital-owned community practices and physician-owned practices.
The study authors noted, “Visits with a generalist other than the patient’s primary care provider were associated with greater provision of low-value care, but mainly within hospital-based settings.”
Medical Laboratories Critical to Increasing Care Value/Reimbursements
According to the study, physicians often develop routines and habits when ordering diagnostic testing and when utilizing clinical laboratory services. By taking a proactive role in educating physicians and managing lab test utilization, laboratories could assist physicians in shifting these habits and reduce the number of low-value or outmoded tests ordered.
Avoiding low-value or unwarranted testing:
- Reduces order load on the laboratory;
- Improves efficiency for healthcare providers; and
- Improves the quality of care for patients.
This is particularly critical as value-based care continues to change the way both laboratories and healthcare facilities get reimbursed for services.
In a press release, Janet B. Kreizman, CEO of the American Association for Clinical Chemistry (AACC) stated, “The changing Medicare payment paradigm creates new opportunities for health systems to advance patient care while more efficiently and effectively utilizing their resources. Laboratory medicine experts are uniquely positioned to ensure this is achieved by working with physicians to devise optimal diagnostic and therapeutic protocols, leading to better health outcomes and reduced costs.”
Graphic above from the Institutes of Medicine (IOM) report, “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America.” (Graphic copyright: National Academy of Sciences, Engineering, and Medicine.)
A study published in the American Journal of Clinical Pathology (AJCP) noted that among 32,000 primary care physicians surveyed:
- 7% were uncertain about which diagnostic tests to order;
- 3% were uncertain on how to interpret results; and
- Respondents only consulted with pathology or laboratory experts 6% of the time.
Thus, an important opportunity exists for laboratory experts to work with PCPs—both within hospitals and outpatient settings—to further improve understanding of the ever-shifting menu of testing options and how to best utilize available lab services.
Optimizing the Cost and Safety of Care through Cooperation
In “‘Choosing Wisely’ Program Wants to Encourage Better Utilization of Clinical Pathology Laboratory Tests,” Dark Daily reported on a program created by the American Board of Internal Medicine Foundation (ABIMF) and Consumer Reports that sought to identify overused diagnostic procedures and medical laboratory testing.
The program asked nearly 400,000 physicians to name five diagnostic test and procedures related to their specialty that offered questionable value to patients and outcomes. In a Kaiser Health News (KHN) article, Daniel Wolfson, COO at ABIMF, attributed the “Choosing Wisely” campaign to launching a national conversation on unwarranted and low-value care.
The KHN report also noted the impact of “Choosing Wisely” on Cedars-Sinai in Los Angeles, one of the largest hospitals in the nation. Harry Sax, MD, Executive Vice Chairman for Surgery at Cedars-Sinai explained how the hospital avoided $6-million in spending in 2013 alone by implementing program recommendations, and by being more selective regarding tests and procedures utilized at the hospital.
Using Lab Utilization Management Technology to Improve Testing Value
A study published in the American Journal of Clinical Pathology (AJCP) highlights how combining expert laboratory advice with a dedicated electronic laboratory utilization management system might shape the future of testing and help educate healthcare providers on the diagnostic options available to them.
The authors of the AJCP study compared testing costs at the Richard L. Roudebush VA Medical Center in Indianapolis before and after implementing an electronic laboratory utilization management system. They attributed six-figure savings to a reduction in high-volume large-panel testing and redundant tests. Savings were realized without increasing length-of-stay or adversely effecting patient care.
Dark Daily recently reported on the value to clinical laboratories of implementing utilization management systems in “Biggest Opportunity for Clinical Laboratory Industry is Utilization Management of Lab Tests, But Only If It Is Done Well.”
As big data continues to shape the future of healthcare, and clinical laboratories continue to implement lean laboratory routines to maintain growth, these systems could offer increased opportunities to help physicians become better at ordering the right test at the right time for the right patient, while helping the clinical laboratories performing these tests to further trim waste, increase the value of care, increase reimbursement, and improve outcomes for patients.
—Jon Stone
Related Information:
Hospital-based Physicians Provide More Unnecessary Services
Association of Primary Care Practice Location and Ownership with the Provision of Low-value Care in the United States
Lab Experts Help Providers Reduce Low-value Resource Use, Costs
Laboratory Medicine Experts, Physicians Must Team up to Improve Use of Lab Tests, Advance Patient Care, and Cut Healthcare Costs
Primary Care Physicians and the Laboratory: Now and the Future
Reduction in Unnecessary Clinical Laboratory Testing Through Utilization Management at a Us Government Veterans Affairs Hospital
Putting a Lid on Waste: Needless Medical Tests Not Only Cost $200B—They Can Do Harm
“Choosing Wisely” Program Wants to Encourage Better Utilization of Clinical Pathology Laboratory Tests
Physicians and Pathologists at Atrius Health Collaborate to Reduce Unnecessary Clinical Laboratory Test Orders and End up Saving $1 Million Annually
As Medical Laboratory Test Utilization Grows, Health Insurers Develop Programs to Manage Rising Costs
Biggest Opportunity for Clinical Laboratory Industry is Utilization Management of Lab Tests, But Only If It Is Done Well
Sep 16, 2015 | Coding, Billing, and Collections, Digital Pathology, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Pathology
Experts believe compressive sensing could find wide application in medical laboratory and pathology testing, particularly where large amounts of data are generated
Pathologists and medical laboratory managers may soon be working with a new tool in their labs. It is called “Compressive Sensing” (CS) and it is an innovative mathematical approach that quickly and efficiently gets an answer by sampling large volumes of a data.
Currently compressive sensing is used in medical imaging technology. CS reduces radiation and speeds up imaging diagnostics. Some experts familiar with this technology believe that it can be used in those clinical laboratories that are working with new diagnostic technologies that generate large volumes of data. CS could dramatically reduce times to analyze results and lower the cost of expensive tests like whole-genome sequencing. (more…)
Feb 25, 2015 | Digital Pathology, Instruments & Equipment, Laboratory Hiring & Human Resources, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Pathology
Researchers at Imperial College London report that their new nanoparticles make it possible for cancer to be visible in magnetic resonance imaging
Even as pathologists are working to develop more sensitive and accurate diagnostic tests for cancer, similar efforts are underway in radiology and imaging. In fact, one research team has developed a self-assembling nanoparticle that can adhere to cancer cells, thus making them visible in MRI scans and possibly eliminate the need for invasive tissue biopsies.
Clinical pathologists and medical laboratory managers will be interested in this research, which is being done at Imperial College London (Imperial). Researchers there have developed a self-assembling nanoparticle that targets cancer cells and makes them visible on magnetic resonance imaging (MRI) scans. (more…)
