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WASHINGTON, (Reuters) - A Democratic Party push to find money to expand U.S. health insurance coverage threatens future sales of MRI machines, CT scanners and other high-tech imaging equipment that detects cancer and other conditions.
Legislation in the House of Representatives would cut payments for the tests by an estimated $4.3 billion over 10 years. If the lower rates take effect, doctors may be less willing to buy pricey equipment or to upgrade to newer models made by General Electric Co, Siemens AG and Philips Electronics NV, analysts say.
"If you're not going to get reimbursed as much, you are not going to spend $1 million on a new machine," said Capitol Street analyst Ipsita Smolinski.
Doctors, patient advocates and equipment makers are lobbying to try and defeat the cuts before Congress resumes work in September on a broad, $1 trillion healthcare overhaul. They argue that patients will suffer with less access to tests and up-to-date technology, particularly in rural areas.
While there is broad support for expanding insurance coverage and improving the nation's healthcare system, "we certainly don't want to do it on the backs of patients who rely on early detection and these tests," said Tim Trysla, executive director of the Access to Medical Imaging Coalition, a group of doctors, equipment manufacturers and patient advocates.
The industry has drawn scrutiny in recent years after a sharp increase in scans using magnetic resonance imaging (MRI), computed tomography (CT) and positron emission tomography (PET), the most advanced and more expensive technology. Critics say many scans are unnecessary.
"Radiology is an area where the volume of procedures has been steadily increasing. So when people talk about health reform and taking costs out of the infrastructure, the industry is one in particular that has a target on its back," Morningstar analyst Bill Buhr said.
In a report in June, the nonpartisan Medicare Payment Advisory Commission said use of imaging scans grew nearly twice as fast as other care between 2002 and 2007. Medicare is the government's health insurance for the elderly and disabled.
While the growth rate slowed between 2006 and 2007, the commission said it worried that, "some of the increased use in recent years may not be appropriate, which contributes to Medicare's growing financial burden on taxpayers and beneficiaries."
The level of Medicare payments also might encourage doctors who own the equipment to order more scans, the report said.
In 2006, Medicare paid $1,118 for the most commonly billed MRI test, a scan of the brain, according to the Government Accountability Office, the investigative arm of Congress.
Manufacturers say the industry already took a sharp hit when payment cuts were imposed in 2007 as part of a U.S. deficit-reduction law and the spending has declined.
Imaging services are under fire based on an "outdated perception" that use of expensive tests is growing rapidly, said Ilyse Schuman, managing director of the Medical Imaging and Technology Alliance, an industry group. "It's just not the case anymore."
Medicare payments to doctors for advanced imaging services fell 19.2 percent to $11.8 billion in the first year after the 2007 payment cuts took effect, Schuman said.
The House legislation would cut payments to doctors who perform the tests by altering the reimbursement formula. The Senate has not finished drafting its bill amid criticism from Republicans and moderate Democrats about the high costs of overhauling the entire system.
Some imaging cuts are likely to survive as lawmakers seek savings from nearly every sector of the healthcare industry, analyst Smolinksi said. The Centers for Medicare & Medicaid Services also has proposed imaging payment cuts that could take effect next year if Congress fails to act.
Medicare rates often influence private insurers' payments.
If lawmakers scale back the overall cost of the healthcare bill, imaging services may not be hit as hard, Smolinksi said.
Cancer patients and other advocates are lobbying lawmakers and officials at the Department of Health and Human Services and the White House to try to defeat the cuts.
The groups argue the high-tech scans are critical for early detection of diseases that can improve care and help bring down costs. If payments get cut, some imaging centers may close, forcing some people to drive longer distances to hospitals for the tests, said Andrew Spiegel, chief executive of the Colon Cancer Alliance.
Or, "if you keep cutting back, these imaging centers aren't going to have money to buy updated machines ... we're going to be stuck with decades-old technology," he added
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