The disproportionate effects of the Deficit Reduction Act of 2005 on radiologists' private office MRI and CT practices compared with those of other physicians

Abstract

Purpose: The Deficit Reduction Act of 2005 (DRA) sharply reduced technical component payments for private office magnetic resonance imaging (MRI) and computed tomographic (CT) imaging. Although radiologists have no control over referrals, nonradiologist physicians (NRPs) can potentially make up for revenue shortfalls by self-referring more examinations. The purpose of this study was therefore to compare the effects of the DRA on the in-office MRI and CT practices of radiologists and NRPs.

Materials and methods: The nationwide Medicare Part B databases for 2002 to 2007 were studied. All MRI and CT codes were selected. Using Medicare physician specialty and place-of-service codes, examinations performed in private offices by radiologists were identified and compared with those performed by NRPs. Trends in procedure volume and payments were studied. The pre-DRA compound annual growth rates for 2002 to 2006 and the post-DRA one-year rates for 2007 are reported.

Results: For MRI, radiologists' private office volume increased by 8.4% yearly from 2002 to 2006 but then dropped by 2.0% in 2007. Nonradiologist physicians' office volume increased by 24.8% yearly, then increased by another 7.6% in 2007. Office MRI payments to radiologists increased by 11.2% yearly from 2002 to 2006 but then dropped by 30.1% in 2007. Nonradiologist physicians' office MRI payments increased by 25.7% yearly, then dropped by 23.5% in 2007. For CT imaging, radiologists' private office volume increased by 11.2% yearly from 2002 to 2006 but then increased by only 2.9% in 2007. Nonradiologist physicians' office volume increased by 31.8% yearly, then increased by another 18.1% in 2007. Office CT payments to radiologists increased by 13.4% yearly from 2002 to 2006 but then dropped by 5.2% in 2007. Nonradiologist physicians' office CT payments increased by 34.9% yearly, then increased by another 8.3% in 2007.

Conclusion: After the DRA took effect, office MRI volume dropped among radiologists but increased among NRPs. Payments for MRI to both dropped, but the percentage decrease to radiologists was greater. Office CT volume increased slightly among radiologists but increased much more among NRPs on a percentage basis. Payments for CT imaging to radiologists dropped, but they increased to NRPs. These results suggest that NRPs may be able to ameliorate the effects of the DRA by increasing self-referral. These trends are of concern and should be scrutinized in future years.