Published by Imaging Biz
Nationwide, imaging operators are beginning to feel the impact of reimbursement cuts from the 2014 Medicare Physician Fee Schedule (“MPFS”) primarily associated with Computed Tomography (“CT”) and Magnetic Resonance Imaging (“MRI”) modalities. The reimbursement changes reduce the technical component of imaging reimbursement in 2014 for MRI and CT from approximately 25 percent to 30 percent and 8 percent to 11 percent, respectively, depending on the types of scans performed.
For Single Site Operators (“SSO”) and Multi-Platform Operators (“MPO”) which rely heavily on government payors, these reimbursement changes have the potential to adversely impact profitability and sustainability in 2014 and beyond. As a result, it is conceivable to predict the number of acquisitions of the SSO, and potentially MPO, will accelerate over the next 12 to 18 months as operators are challenged with maintaining margins with a high fixed cost, high capital business model.
The following discussion highlights the potential risks each of these operators face in the changing landscape and illustrates the potential impacts to profitably and the likelihood of consolidation.