A CT scan in Miami, Florida does not cost the same as a CT scan in Columbus, Ohio. In fact, the cost of a CT can vary by hundreds of dollars even within the same city. This is also true of most diagnostic imaging including CT, MRI, and PET scans. While these advanced studies were originally performed only in hospitals, technology and patient convenience encouraged the emergence of freestanding imaging centers.
Many times the owners of freestanding imaging centers are the same radiologists that practice in hospitals. Why have hospital-based radiologists invested in free-standing facilities?
When a diagnostic imaging exam is performed in a hospital, the radiologist receives about 20% of the total fee for their professional interpretation of the exam. The remainder goes to the hospital to cover the costs of the equipment, office space, maintenance, etc. However, when a radiologist owns a freestanding facility, the radiologist receives 100% of the reimbursement.
This new business model increased competition within the medical imaging landscape; however, referring providers, those that order the diagnostic imaging exams, and their patients were not factored into the new model. Neither the orthopedist ordering a knee MRI nor the neurologist ordering a brain MRI had any idea what the study was going to cost based on where they sent the patient. The patient assumed that the studies would cost the same because the hospital and/or the freestanding facility were both in the patient’s health plan network. Unfortunately, this was not the case. In 2005, a year after CareCore began its study correlating diagnostic imaging costs to the facilities in which they were performed, Avalere Health LLC published a paper: “Pricing Variations in the Consumer Market for Diagnostic Imaging Services.”. As identified in their analysis (excerpt below), there was up to a 950% difference in the cost of care based on the service location.
The study highlights charges for a CT of the abdomen ranging from $300 to $3,150. And guess who charged the $3,150 for a CT of the Abdomen…a hospital. While 950% appeared to be unrealistic to any consumer of service in 2005, from 2005 to today it has only increased. Why? How could this be? New York Times blog writer Roni Caryn Rabin highlights in her article, The Confusion of Hospital Pricing, a study that confirms the overwhelming cost variances in medical services. She points out that consumers are encouraged to play an active role in their health care and to shop around for care; however, the current market does not support the consumer in the role. Hospital rates are increasingly ambiguous. Some hospitals may explain that rate variances are a function of uninsured non-payment. But, the bottom line is that they receive these rates because there is no oversight on what most hospitals charge, or said another way, because they can.
Faced with these facts, in 2005 CareCore launched a Member Scheduling Program. After medical necessity is confirmed through an evidence-based review by a licensed clinician, a CareCore scheduling agent places an outbound call to the member. The agent informs the patient of the exam approval and offers to assist in scheduling the requested imaging study. The agent offers guidance in determining the site of service explaining out-of-pocket costs and overall costs of care. While at all times CareCore honors the member’s selection of a health plan participating site, the prospective nature of the outbound call places the member at the core of the decision-making process. With the dramatic trend towards higher deductibles and out-of-pocket costs, members have a significant interest in the cost of outpatient non-emergent services. What about quality? In our programs, we make sure that the quality of the imaging center is held to a higher standard than those set by the American College of Radiology.
Today, CareCore makes about 1,700 scheduling calls per day to members to help schedule their imaging exams at a high quality facility that meets their needs. A recent independent survey conducted by Intelliscan, Inc. ranked members’ overall satisfaction with the scheduling program at over 96% percent by members contacted. Advanced geo access features are utilized to select sites based on the members home, office or where they are standing if they call using a PDA with geo locator on! Just this week, CareCore National’s Member Scheduling Program was recognized as a finalist in URAC’s 2012 Awards for Best Practices in Health Care Consumer Empowerment and Protection.
We are proud to have received this award and to have been the first in our industry to offer an innovative approach to involve patients in their care.