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The Dose

Welcome to The Dose, which tackles the business and economics inside the turbulent world of health care and life sciences in Indiana. Your host is John Russell. To contact me call 317-472-5383.

Anthem to hospitals: No more MRIs, CT-scans for outpatients without preapproval

August 28, 2017

For years, many hospitals have been able to count on CT scans, MRIs and other advanced imaging services as a profit centeroften as a way to help cover other money-losing operations.

But now Indianapolis-based insurer Anthem Inc. wants its members to avoid expensive hospital imaging services for outpatient needs and use lower-priced facilities instead.

MRI, or magnetic resonance imaging, and CT, or computerized tomography, scans are high-tech imaging services that let doctors see the inside of a patient’s body, as a tool for diagnosing a medical condition.

Anthem says it will no longer pay for MRIs and CT scans delivered on an outpatient basis at hospitals, which can often cost several times more than the same services at a freestanding imaging center.

MRIs and CT scans can vary from $350 to $2,000, depending on the region and type of facility, Anthem said.

In a note to health providers, Anthem said it will require hospitals to submit precertification requests for MRIs and CT scans for patients.

“If it is NOT medically necessary for the member to receive the service in a hospital setting, the request for authorization will be denied as not medically necessary for that site of care,” according to a Q&A on Anthem’s website.

Anthem is the largest health insurer in Indiana, and its policy is sure to take a hit on hospitals' bottom line. The new policy went into effect July 1 in Indiana, Kentucky, Missouri and Wisconsin. It will go into effect Sept. 1 in Ohio.

The policy does not apply to members enrolled in Medicare Advantage, BlueCard, Medicaid or Medicare Supplement.

The Indiana Hospital Association said requiring busy physicians to get a precertification approval while trying to diagnose a patient creates an unfair burden.

Physicians will now be required to spend time fighting for reimbursement rather than in treating patients, said Brian Tabor, president of the association, which represents more than 100 hospitals and health systems in Indiana.

In some cases, he said, physicians will have good reasons for wanting to order an image in-house, rather than sending the patient down the road to an independent imaging center.

“A physician may believe the image is best done in the hospital, for various reasons,” Tabor said. “It could be the quality of the machinery. It could be the continuity of care, having that image be part of the patient’s electronic medical records, rather than referring the patient out to a standalone imaging center.”

He added: “In this case, under the new policy, that would be denied. If the physician feels it is important, there is an appeals process, but that could be very lengthy and create a lot of additional cost.”

If the hospital loses the appeal, it could wind up having to swallow the cost of the MRI or CT scan, Tabor said.

Rural hospitals could feel a bigger impact, because there aren’t as many nearby independent imaging centers in remote counties. Many of those hospitals already have low profit margins, said Elizabeth Walker, an Indianapolis hospital consultant and chief strategy officer with Quorum Health Resources.

“This trend will disproportionately impact the razor-thin margins at community and rural hospitals,” she said.

Anthem did not respond to IBJ's request to answer questions about what prompted the policy change or how much it expects to save.

The company has been taking a harder line in recent months on trying to hold down health costs. It recently warned members not to visit the emergency room unless they are having a true emergency, or they would be responsible for the cost.

Several hospitals in the Indianapolis area did not respond to requests from IBJ about the profitability of their imaging services, and whether Anthem’s new policy would affect patient care or their bottom line.

According to Diagnostic Imaging, a website that takes frequent surveys of radiology services, radiology is still considered a profit center at many hospitals.

In recent years, patients insured by Anthem who have seen their doctor to get an MRI sometimes have received a phone call from Anthem pointing them toward the lowest-cost MRI facilities in the Indianapolis area.

The people who do heed the advice have saved Anthem a chunk of money and, in the process, forced health care providers—especially hospitals—to sharply cut their prices, a 2014 study in the medical journal Health Affairs has found.

Anthem patients in five U.S. cities, including Indianapolis, spent $220 less per MRI scan after receiving those phone calls, compared with patients in nine other Anthem markets that received no phone calls.

 

 

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