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MRI backlash: Crackdown on costs of imaging

Physicians are finding imaging machines to be worthy sources of ancillary revenue, but health plans and governments are tightening the reins on scans in the name of cost control.

By Mike Norbut, amednews staff. Dec. 6, 2004.

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Ancillary revenue has become a key to financial survival for many physicians in a world of declining reimbursements. For some larger groups, the strategy has revolved around MRI machines and other imaging equipment -- high-ticket items that carry the potential for profitability.

While it has a hefty price tag, in-office imaging equipment has proven to be a convenient option for patients and a positive investment for physicians, so it's no wonder that many groups would want to add that service to their repertoire.

The revenue stream, however, is not without its share of dams, as insurers and government agencies look to rein in costs. Overutilization, especially when it comes to imaging, has become a hot-button topic in health care, and physicians are finding the decision to purchase an MRI machine to be about more than whether they can afford it.

They also have to consider if they'll get paid for the tests.

"In the whole debate of imaging equipment in offices, whether you agree or disagree, ultimately [insurers] have the trump card," said James Borgstede, MD, a radiologist in Colorado Springs, Colo., and chair of the board of chancellors of the American College of Radiology. "If they see it as a problem, they're going to solve the problem."

The problem, as defined by insurers and the Medicare Payment Advisory Commission, is the rapid growth of diagnostic imaging tests. In a March report to Congress, MedPAC said imaging utilization grew faster than any other physician service, at 9.4%, between 2001 and 2002. Some types of imaging, such as nuclear medicine and advanced MRI, grew more than 17%, according to the report.