Today, independent imaging centers are facing everything from continuous reimbursement cuts to intense competition with hospitals. Fortunately, some centers have discovered ways to overcome those challenges. DOTmed HealthCare Business News spoke with Arun Jethani, CEO of Medical Imaging Specialists, about the biggest challenges standing in independent centers’ way and what they can do to stay in the game.

HCBN: How does the medical imaging business today compare with how it was 10 years ago?
AJ: A lot of radiologists who had hospital- based contracts started their own independent imaging centers and the hospitals really didn’t mind it 10 years ago. The reimbursements were continuing to rise — if we look at 2002 to 2005 they kept going up. The reimbursements for outpatient imaging and technology was continuously advancing. There was a lot of growth, for independent centers and physicians who wanted to own their own imaging equipment as well.

HCBN: What are some of the biggest challenges independent imaging centers face today?
AJ: I think today there are a few. One is that there’s a lot of concern on overutilization — for the people who are being ordered imaging [exams], is the study appropriate for that patient? Two is that the cost of imaging has gone up for patients. Insurance companies have increased the patient responsibility through increases in co-pays and deductibles. Three, the reimbursements to the centers have significantly decreased since 2007, since the Deficit Reduction Act and they continue to decrease. We were actually shocked a little this year to see that Medicare dramatically lowered the technical reimbursement on certain MRIs, for example. Doctors, owning independent centers, have to do a lot more at a much lower price.

Another thing that’s going on is that hospitals are purchasing both independent centers and acquiring referring physician doctors — so primary care doctors, cardiologists, orthopedic surgeons, neurologists, many specialties. The people that would typically refer to an independent center, the hospitals are buying those practices and are insisting or suggesting that those doctors refer to hospital-owned imaging, creating significant competition and lower volumes for the independent centers.

It’s much more competitive for an independent center. Also, where an independent center is owned by a radiologist or radiology group and that group also provides services for a local hospital, the hospitals are asking those groups to either partner with the hospital or sell outright their imaging centers to the hospitals. What may have been acknowledged and approved by a hospital before is now looked at as competition. If a radiology group has the contract with the hospital and has its own imaging center, those are competitive forces and a lot of times the radiology group will surrender its outpatient center to that hospital to maintain a strong contract with that hospital. If the partnership is done correctly, this can be a benefit to both the hospital and radiology group.

HCBN: What effect have reimbursement cuts had on independent imaging centers?
AJ: I think there are two things. One is that the reimbursement cuts primarily have happened to independent centers and not as much yet to hospitals. I think what we’ve seen is a constant reduction since 2007 — it’s gotten a lot greater over the last few years. This is both government payors and private insurance companies because many of the insurance companies follow what Medicare does.

What you’re seeing on the hospital side is a lot of hospitals have kept healthy reimbursement contracts. They have purchased independent centers and therefore are able to keep some of those rates. Again, for the independent center it’s becoming harder to compete because their reimbursements have gone down. The other part of it is the expectation of services continually increases, which I think is a good thing in health care and for the industry, but you’re faced with purchasing new technology, you’re faced with electronic health records and continuing to be able to provide patients and referring physicians with multiple avenues on how to get the reports and images via iPad or Droid. All this costs money. Turnaround times and getting the information back to the patient and physician is very important.

We’re hoping that [independent imaging center reimbursements] will stay somewhat neutral over the next few years and then with quality incentives, they’ll begin to rise again.

HCBN: What sorts of things are independent imaging centers doing to try to weather the cuts?
AJ: They need to definitely be ahead with respect to new programming. Being proactive, working with the referring physicians to show them how other new technology or new laws or new pieces of care can really help improve the patient situation.

I think coordinating care in a very timely fashion. If a woman gets a mammogram —making sure that if there are some suspicious findings, an ultrasound can be done immediately and potentially a breast MRI and if there is a suspicious mass, having the ability to do a biopsy within a few days. That still keeps competitive spirits and it’s best for patient care.

Independent groups could help one another with learning new programs. We find that a lot of times when independents get together in forums — they can share ideas, and learn from one another on how to increase their utilization and their identity.

The other thing is —imaging centers typically have a good team. An imaging center usually has between 10 and 20 employees and using that team and their knowledge, imaging centers and radiologists have typically been at the forefront of technology. What we’re seeing is that they can aggregate other doctors and work on things such as accountable care organizations or even work with insurance companies to help improve care to their population and in return, imaging centers can get greater utilization and potentially an increased reimbursement with quality incentives.

HCBN: Why is customer satisfaction so important today, especially for independent imaging centers?
AJ: I think that’s where they compete and have an advantage. First of all, patients are much more educated and knowledgeable about imaging today. What we’re finding is that patients ask their doctors to send them to a specific imaging center versus a doctor telling them where to go. You’re starting to see that trend in the major cities and it’s starting to get into the suburbs and other communities. Making sure that you’re taking care of the patient is very important. If the patient isn’t happy and complains to their doctor, you don’t only lose that patient, you actually potentially lose that doctor’s group of patients.

There is a big difference between being in an outpatient center that coordinates care effectively versus going elsewhere. Being able to have multiple studies done within a day or so really eases the concern of a patient and helps them indentify any issues they have and if they don’t, then it gives that patient peace of mind. A woman who gets a mammogram, ultrasound and breast MRI, if needed, all in one day, that’s much more powerful than having that happen over a four to six week timeframe when the woman would be extremely nervous or concerned about her situation during that time.

HCBN: What one piece of advice would you give independent imaging centers that are still in the game?
AJ: I’m very optimistic for independent centers so I think the piece of advice is to create as much runway financially as you can because it going to be tough for the next two years or so. Good imaging centers offer a lower cost, better quality solutions and I think they’re the ones that are going to succeed in the long run no matter who’s paying.