Steering patients to freestanding imaging facilities will benefit the many patients who will have lower out-of-pocket costs for their imaging services, but it may have a negative impact on the continuity of care for some patients.

Anthem, the nation’s second largest health plan, is implementing a new policy in which it will deny most claims for computed tomography (CT) and magnetic resonance imaging (MRI) studies performed in hospital outpatient radiology departments. Instead, its members will be pointed to freestanding imaging centers or outpatient clinics, where the imaging is less expensive.

The imaging site-of-care policy launched in several states this year and will roll to all but one of the states that Anthem serves by spring 2018.

That policy serves as a red flag to all hospitals that offer outpatient imaging, even if they are not affected by Anthem’s policy. The Advisory Board cites a 2016 Medicare analysis showing that, on average, freestanding facilities that conduct advanced imaging studies are paid at about 45 percent of the hospital rate.

Payers and patients are increasingly unwilling to pay such differentials, says Lea Halim, senior consultant at Advisory Board’s Research Division. “Hospital-based imaging centers are not going to go away but they are going to become less of a destination for outpatient imaging in many markets,” she says. “Anthem’s policy is not the only thing that is pushing that trend.”

Anthem’s Site-of-Care Policy

Anthem’s new policy for MRIs, CT scans, and certain other imaging tests is administered by AIM Specialty Health.

Citing the continued growth of diagnostic imaging volumes, Anthem says it can save money for employers by limiting the number of outpatient images performed in the outpatient hospital setting and directing patients to lower-cost freestanding centers or physician offices. The health plan says 80 percent of its high-tech imaging expenditures go for MRI and CT scans, which have high cost variability based on the site of service.

The process works like this:

  • When a provider orders an MRI or CT scan, AIM reviews the request for clinical appropriateness and determines whether the selected site of care meets the criteria for medical necessity.

  • A scan is considered medically necessary to be performed in a hospital outpatient department if it meets one of these criteria:
        -The service is only available in the hospital setting.
       -The individual requires an obstetrical observation or is receiving perinatology services
       -There is no other geographically accessible alternative site because a patient’s circumstances (e.g., documented claustrophobia requiring open MRI or the need for         anesthesia) cannot be accommodated by a freestanding imaging center.

  • If the scan is clinically appropriate but does have a “medically necessary” exemption, the provider is directed to a list of “preferred servicing locations.” In that case, Anthem will not issue payment if the scan is performed at a hospital outpatient department.

  • If a physician ignores the denial and the member receives the imaging service in a hospital outpatient setting, the facility will be responsible for the cost unless the member has signed a waiver agreeing to be financially responsible.

The new policy went into effect in Indiana, Kentucky, Missouri, and Wisconsin in July and in Ohio, Colorado, Nevada, Georgia, and New York in September. It will extend to California, Connecticut, Maine, and Virginia by March 1, 2018, with only one state in Anthem’s service territory—New Hampshire—not included.  The policy applies to all Anthem members covered by individual or employer-sponsored fully insured commercial plans; self-funded employers can adopt the policy if they choose.

Mammograms and X-rays are not affected by the policy change.

See related tool: A Formula to Determine the Impact of Anthem's Imaging Policy

Will Others Follow Suit?

While Anthem’s imaging site-of-service policy is the toughest hospitals have seen, it is certainly not the first attempt to steer patients to lower-cost imaging providers.

Halim at Advisory Board points out that health plans have been encouraging their members to choose freestanding or physician-owned imaging centers for years, offering incentives such as gift cards and coaching them about the lower out-of-pocket costs they will incur.

Beyond that, high-deductible health plans by design incentivize patients to seek out lower-cost options. “More and more patients share very significant exposure to costs,” she says. “There are more patients out on their own free will looking for opportunities to get imaging off the hospital campus because it is cheaper.”

Whether other health plans follow Anthem’s decision remains to be seen. Richard L. Gundling, HFMA’s senior vice president for healthcare financial practices, encourages hospital leaders to recognize that this situation reflects the value movement in healthcare. “Other health insurance plans will carefully look at Anthem’s experience and make their decisions accordingly,” he says.

Payers and purchasers are looking for the highest value, which includes price, quality, and patient experience. To succeed in this environment, hospitals must be able to demonstrate that the quality and patient experience they offer justify the higher cost of their imaging services.

“I think health systems need to be prepared that, if their imaging services aren’t differentiated from the stand-alone imaging centers, then price can be the differentiator,” he says.

How Will Patients Be Affected?

In a written statement, Anthem cites two benefits to its members:

  • More affordable premiums as a result of Anthem’s lower expenditures for high-tech images.
  • Lower out-of-pocket responsibility as Anthem estimates that members who have not met their deductibles and must pay the entire cost of high-tech scans may save close to $1,000 by avoiding hospital-owned imaging centers, while those who are responsible only for co-payments may save up to $200.

The American College of Radiology (ACR) sees a different side to the policy. It issued a statement saying it is “gravely concerned” about the effect it will have on patient care. It cited two big worries:

  • Timely access to advanced imaging services, particularly for patients in rural areas who do not have easy access to freestanding imaging centers.
  • Interruption of pre-existing relationships between referring physicians and radiologists that are based on the skills of radiologists who perform and interpret imaging studies.

James Rawson, MD, chair of ACR’s Commission on Patient- and Family-Centered Care, is also worried about continuity of care for two groups of patients: those who are discharged from the hospital with orders for post-discharge imaging and those with chronic diseases that are monitored over time.

For recently discharged patients, the information in hospitals’ electronic health records and the images obtained during hospital stays might be valuable in interpreting subsequent images performed on an outpatient basis. “If [the radiologist at a freestanding center] is looking for any type of interval comparison, the prior studies that are here would not be available, so from a continuity of care on a post-hospital discharge patient, that’s a concern,” he says.

Similarly, patients with chronic diseases like cancer or multiple sclerosis may have serial imaging studies over several years. “If you fragment the care, you end up with a radiologist who is able to read the current study but can’t give you an assessment of interval change, which is often needed to make treatment or management decisions for the patient’s care,” Rawson says.

He also thinks sending patients to freestanding imaging centers will affect patient experience. For example, if patients are being treated for cancer, a scan performed in hospital outpatient departments can be read and reported to oncologists via electronic health records, and the information is available for patients’ appointments.

But if images are taken at freestanding facilities, patients have to hand-carry CDs to oncologists’ offices, and typically, oncologists ask another radiologist to re-read scans to compare them to prior studies. “So the patient leaves the appointment with no answer about next steps and has to wait for a phone call from the oncologist,” he says. “And you’re creating work for the patient that was already built into the infrastructure of the health system.”

What To Do Now

Gundling encourages health plans to consider the price and quality of imaging services in total, rather than basing coverage policy only on the setting of the services. “It may be beneficial to consider the clinical integration and transformation that is going on in the healthcare delivery system and the costs that may be saved from care coordination and reducing unnecessary variations in care,” he says.

Meanwhile, hospitals and health systems must recognize they can no longer rely so heavily on cross-subsidization—charging enough for certain services, such as imaging, to cover the costs for low-profit services, such as burn centers—to balance the books.

He points to recommendations from HFMA’s Value Project report—in particular, Strategies for Reconfiguring Cost Structure—for creating value for care purchasers. For most health systems, this means both optimizing the efficiencies of existing services and investing in new technologies and infrastructure to improve the value of care delivery in the future.

Perhaps the most important recommendation: Face reality and take action. “Embrace the likelihood of disruption in health care by investing in innovation,” the report reads. “An organization is better off disrupting its own business model than having it disrupted by others.”

Lola Butcher is a freelance writer and editor based in Missouri.

Interviewed for this article:

Richard L. Gundling, FHFMA CMA, is senior vice president-healthcare financial practices, Healthcare Financial Management Association, Washington, D.C.

Lea Halim is senior consultant, Research Division, Advisory Board, Washington, D.C.

James V. Rawson, MD, chairperson, American College of Radiology Commission on Patient- and Familyt-Centered Care, Augusta, Ga.

Discussion Starters

Forum members: What do you think? Please share your thoughts in the comments section below.

  • How do you expect your organization to be affected by Anthem’s site-of-care imaging policy?
  • What is your organization’s strategy for addressing this policy change or for addressing other pressures to move services to lower-cost settings?

Publication Date: Tuesday, November 21, 2017