DRA fall out hits rads, staff and vendors
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James W. Moser, PhD, of the ACR, and Dawn M. Hastreiter, MD, PhD, of the Mallinckrodt Institute of Radiology, Washington University in St. Louis, conducted a random sample survey of ACR radiologist members and practice leaders in May and June of 2007 to obtain information regarding the impact of the DRA and upcoming anti-markup legislation. Radiation oncologists were excluded, as were trainees and retirees.
The DRA placed a cap on technical-component payments from Medicare for non-hospital imaging services beginning in January 2007. The authors said that the primary survey topics related to the effect of the DRA included the professional and technical components of income, income derived from Medicare patients, practice changes resulting from Medicare payment cuts and outside readings.
In total, 601 responses were received from currently practicing radiologists. The results revealed that an average of nearly 63 percent of income was derived from the professional-component billing of radiologic services provided in hospitals and another 10 percent from the professional-component billing at non-hospital imaging centers and physicians' offices. Global billing of both the professional and technical components accounted for 20 percent of radiologists' income. Less than 3 percent came from technical-component-only billing.
In all, an average of 18 percent of radiologists' income is from technical-component sources. Radiologists whose percentages of income derived from the technical component were above average and included those aged 47 to 54 years, owners of outpatient imaging facilities, radiologists in the Northeast and radiologists at nonacademic practices.
The surveys revealed that the reductions (compared with what would have been paid absent the DRA) averaged 18.5 percent and varied by imaging modality, with up to 34 percent for MRI.
"Clearly, the vulnerability of radiologists' income to the DRA's technical-component payment caps is related to the portions of their incomes that come from technical-component sources and to the particular imaging modalities from which they derive their incomes," the authors wrote.
To determine the effect of the DRA on radiologists' practices, respondents were asked whether they were aware of which imaging procedures experienced Medicare payment reductions and how their practices had adapted to Medicare payment changes for imaging services since Jan. 1, 2007, with regard to specific areas. They found 77 percent of radiologists were aware of the imaging procedures for which Medicare cut payments.
Also, two-thirds of radiologists noted reduced revenue from Medicare relative to what was expected, the researchers reported. Strikingly, 55 percent of radiologists observed that private payors adopted Medicare's payment cuts. Forty-one percent laid off staff members or altered hiring plans, which they attributed to the reimbursement cuts. Nearly half canceled, postponed, or reduced plans for imaging equipment or office expansions. Fewer than 20 percent of those surveyed cut back on providing imaging procedures for which payments decreased, reduced hours of service, or performed other changes.
Moser and Hastreiter noted that the average reduction in a radiologist's total income from medical practice resulting from the DRA caps and cuts is estimated to be approximately 1 percent. However, they wrote "that small percentage belies the potentially larger percentage cut for the minority of radiologists whose incomes depend a great deal on technical-component billing, who have large Medicare patient shares and who perform a lot of imaging of the type that was severely affected by the DRA (such as MRI)."
They also noted that since half of radiologists also perform outside interpretations for imaging entities that are not directly part of their practices, contract arrangements in 40 percent or more of these cases may result in radiologists’ not being reimbursed for the entire professional component--contracts that could potentially be affected by federal anti-markup regulations that took effect on Jan. 1.