Gaschen's network includes 17 imaging centers and seven radiation oncology centers serving a northern California megalopolis of 2.1 million, so they're a big player that can negotiate from a position of considerable strength. Not all independent imaging centers are so lucky, particularly since some private insurers use Medicare as a benchmark for rates.

"The legislation doesn't [affect private insurers] but the reality is that Medicare puts something in and if the insurance companies can figure out a way to pay less money, they're going to jump on it," said John Ising, CRA, administrator, Medical Plaza Imaging Associates, Kansas City, Missouri.


"[DRA] is Medicare but it's also that many of our contracts are tied to Medicare rates," added Adrian Riggs, CRA, MBA, operations manager at Solano Diagnostic Imaging, an outpatient imaging company in Roseville, Calif., between San Francisco and Sacramento. "So what happens with Medicare eventually will translate into some of our contracts as well with the commercial insurers. We don't have huge margins to begin with and this just cuts into our expense management. [We are] making sure we're getting the best operational efficiency so we can try to offset some of it."

SURVIVAL STRATEGIES
In our reporting for another story about CT imaging service, DOTmed News asked professionals from several independent service organizations what impact they thought the DRA cuts would have. Many said "devastating" particularly for those in a weaker financial position or in more competitive markets such as Florida.

"The key to survival and success in the face of cuts will be efficiency. A lot imaging centers have been run very loosely without much oversight as to costs, procedures, and capital equipment procurement," said Hazel Hacker, business manager, Edison (N.J) Imaging Associates. "Now everything must be put on the table and assessed, including personnel." She also said it's an advantage to have a radiologist on site at all times in case a referring physician has a question. (State regulations vary.)

Other strategies to compensate for lost reimbursement might include increasing administrative efficiencies in scheduling and reducing operational costs for equipment maintenance. It might help to diversify into other imaging modalities as a hedge against declining payment.

"We were anticipating a 10 to 15 percent cut [in collections] and that's relatively low [compared to other providers]. Because we have such a wide variety of modalities here at the imaging center, we are able to deflect some of that," said Ising. He suggested that centers offering just a few high-end modalities might feel government cuts more acutely. For example CT imaging is highly likely to be performed on contiguous body parts, which are subject to special reimbursement reductions.

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