Tripp Baltz, Bloomberg

Hospitals in states where Anthem Blue Cross Blue Shield operates will likely take a financial hit due to the plan’s decision to pay for outpatient MRIs and CTs only when members get them at freestanding imaging centers.

Health advocates have also said Anthem’s policy—which it rolled out in nine states in fall 2017 and four more states in 2018—will put a worrisome onus on health consumers.

Anthem’s policy with respect to imaging takes aim at a service that is priced much higher at hospitals than at ambulatory care centers, and raises questions as to the repercussions when carriers—faced with ever rising health-care expenses—steer members toward lower-cost providers for health care.

‘Material’ Impact

“It’s hard to give a sense of the magnitude, but I do think it’s going to be material” in terms of the effect on hospitals’ bottom lines ultimately, Christopher Stanley, director in the health-care practice at global consulting firm Navigant, told Bloomberg Law May 31.

Imaging services are among the more profitable services that hospitals perform, he said. Meanwhile, prices for imaging services at hospitals is two to three times higher than at freestanding centers.

National average hospital charges before negotiation of discounts for advanced imaging services such as MRIs and CT scans ranged from 1.7 to 2.49 times higher than prices for such services at freestanding centers, according to data published in spring 2017 by the Healthcare Financial Management Association. For standard imaging services, hospital prices were 1.85 percent to 3.08 higher, and for echography/ultrasonagraphy, 2.65 percent to 2.92 percent higher.

‘Medically Necessary’

Given those price variations, under the new Anthem policy, unless a doctor enters information into an online system saying the procedure is “medically necessary” at the hospital, the patient is directed to a freestanding center, Tony Felts, spokesman for the company in Indianapolis, told Bloomberg Law May 25.

The policy pertains to outpatient imaging services only, he said. Rural areas that don’t have free-standing imaging centers for consumers are exempt, he said. Other exceptions include when the patient is under 10 years old or when the imaging is preoperative and surgery is occurring in the hospital, he said.

Felts said he did not have information about how much the policy is saving the company or patients.

Direct and Indirect

Hospital’s margins could be affected directly and and indirectly, Stanley said. There will be a direct impact when outpatient imaging services are provided by hospitals but denied by Anthem, he said. An indirect impact will occur when doctors divert patients to ambulatory centers or patients choose to go to them, bypassing hospitals, when they might be covered under an exception to the plan’s policy, he said.

Some physicians might say, “I don’t want to send some of my patients over there and have the rest treated here,” so they might start sending everybody to freestanding centers, not just those covered by Anthem, he said.

Additionally, if a patient were to receive services at a freestanding center, and then need additional testing, they are less likely to get those additional tests at a hospital even if the service is covered.

“They tend not to go outside the original facility,” Stanley said. “They tend to remain within the same health system.”

Consumer Protection

Adam Fox, director of strategic engagement for the Colorado Consumer Health Initiative in Denver, told Bloomberg Law he’s concerned about the Anthem policy from a consumer protection perspective.

“There may be situations where a consumer may feel like they have to leave the hospital to receive those services,” he told Bloomberg Law May 29. “It puts the consumer in the bad position of having to make a clinical decision when they don’t have the medical knowledge to do that, necessarily.”

Felts said freestanding imaging centers are safe and provide a quality of care comparable to similar services performed in a hospital, Felts said. They’re also more cost-effective, saving consumers nearly $1,000 in out-of-pocket costs compared to a hospital, he said.

More Affordable Care

“Consumers and employers are concerned about health-care affordability,” Felts said. The lower cost of service allows the plan to keep premiums more affordable, he said.

Anthem’s policy also opens “the door for their members to be on the hook” when reimbursement for imaging services is denied, Fox said.

“An important question to ask is, if these services are so much more expensive at hospitals, why aren’t plans negotiating for prices that are more competitive?” Fox said. “Hospitals tends to charge more, but what are insurers doing to combat that? If they are just going to shift costs, that means they’re not doing their jobs of trying to control costs for their members.”

‘Balance’ Billing

“Balance” or “surprise” billing, the practice of billing patients for the difference between what a hospital charges for a service and what a plan reimburses for it, is illegal in many states, including Colorado, Vince Plymell, spokesman for the state Division of Insurance, told Bloomberg Law in an email May 30.

Ultimately, the patient is on the hook for unreimbursed services, but the reality is, few will pay, and hospitals will end up writing off the bill, Stanley said.

Michael Conway, interim commissioner of the Colorado Division of Insurance, told Bloomberg Law May 25 the plan did not need to secure division approval before implementing the policy, he said, although if the state felt a policy change rendered a network of providers inadequate it would “have a conversation with them,” he said.

He said the division had not heard any complaints from consumers about the change.

Other Plans

Conway said he wasn’t aware of other plans in Colorado with an imaging policy similar to Anthem’s, but added he “wouldn’t be surprised if other companies tried to control costs in a similar fashion.” Stanley, Felts, and Fox said they were also unaware of other plans with the imaging policy.

Other plans will probably watch carefully to see what happens with Anthem, Richard Gundling, vice president of HFMA, told Bloomberg Law May 30. “They’ll probably want to see how health plan members react.”

More price-sensitive members, like those in a $2,500 deductible plan who are going in for a diagnostic scan for a sports injury, are much more likely to turn to a free-standing center now that Anthem has put out its policy, Gundling said. “Now if I had a chest scan or a scan of my brain, I’d prefer to go to a hospital,” he said.

Large plans tend to be cautious with any kind of change like this, Stanley said, adding it was more likely smaller carriers would follow Anthem’s lead than the other large plans.

“It’s unlikely this is the start of a groundswell,” he said, “but more of a reflection of the trend toward multiple tactics plans are using to reduce costs, such as high deductible plans, pricing transparency, and ways to direct the more price-sensitive members to lower cost care.”

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