024 - Money Tree #5 - Diagnostic Centers and How You Can Save Money

February 10, 2022 Coach JPMD Season 1 Episode 24
024 - Money Tree #5 - Diagnostic Centers and How You Can Save Money
Show Notes Transcript

In this Money Tree Series Episode #5, Coach JPMD talks about the role played by Diagnostic Centers and their influence on the Money Tree. He discusses how they impact the flow of funding within the insurance and within the IPA. He talks about the relationship between radiology centers and various providers of care. The Money Tree Series Podcast episodes are geared toward helping physicians and other healthcare providers with the ins and outs of running a successful Medicare Advantage practice.  You can download the money tree diagram at

Don’t forget that Coach JPMD helps physicians go from overwhelmed to confident while increasing their income and their time in 90 days or less. Book a call using this link to learn how you can decrease your stress and earn more.

Show Notes 

Intro  0:00  
Welcome to the practice impossible podcast where your host Jude A Pierre MD, also known as Coach JPMD discusses medical practice topics that will guide you through the maze that is the business of medicine, and teach you how to increase profits and help populations live long. Your mission should you choose to accept is to listen and be transformed. Now, here's your host, Coach JPMD.

Coach JPMD  0:25  
Thank you so much for listening to the Practice Impossible Podcasts and we're happy to be back I'm happy to be back after a brief COVID pause as you heard last week, and I'm resuming the episodes with the money tree as I promised, and today's Money Tree episode is going to be on radiology and or and or. You could say diagnostic centers, not just radiology, but diagnostic centers and how it affects the payment tree. And for those of you who have not already downloaded the money tree diagram, you can do so at And the money tree is basically a diagram that details how insurances, IPAs, MSOs, and primary care physicians get paid, and how different specialties or different providers affect that payment tree. And a lot of this is discussed in the Llama course. In addition, you can book a call with me if you're interested in learning more and how we can decrease your stress and increase our revenue. By learning more about Medicare Advantage. I'm happy to have a call with you guys for 30 minutes. So you can kind of understand what I do and how I can help you decrease your stress. So when we talk about radiology costs, we really speak about how diagnostic centers and sending your patients to the diagnostic centers can affect the revenue and your bottom line in your managed care panel. It's about patient population management, right? And we talked about how the insurance is pay the IPAs, or I should even start before then. But how the government CMS pays the insurance companies the HMOs and Medicare Advantage companies, those IPAs that contract with the managed care organizations contract with different facilities and different providers of care. And the diagnostic centers obviously provide services like mammograms, X rays, CAT scans, MRIs and hospitals can also do the same right to hospitals have radiology centers and radiology diagnostic facilities at their, at their facilities. But these things these procedures performed at hospitals can cost a lot more than diagnostic centers or outpatient diagnostic centers. And I have a I have an example of that with my son who is not on Medicare Advantage, but he needed an MRI of his lower extremities. And it was ordered by his orthopedic doctor, and the orthopedic physician or the sports medicine physician wanted the MRI to be done at one of his hospital based facilities. And the hospital actually owns or employs that physician and as well as owns the hospitals and the diagnostic center. So we because of our deductible plan or high deductible plan and an insurance plan that we have through our insurer through our company, we actually received an estimate for outpatient services. And this was actually pretty interesting because when I looked at the estimate, it was an estimate for the MRI pre being performed without contrast without die at a hospital facility. And the deductible amount was $1,471 with a coinsurance of $90, which is I guess I paid 10% coinsurance, so trying to figure that out. So the estimated patient responsibility for that MRI at the hospital was going to be $1,569. Now, right next to that estimate was the estimate for a facility owned by the hospital system, which is a freestanding outpatient imaging center. And that deductible amount which really equates to how much the facility's charging and for that procedure was $544 with no 10% coinsurance, so my essay responsibility was $544. 

So in my mind, I'm thinking why would I ever want to go to the hospital and have an MRI of my lower extremity done for my son, rather than have it done at an outpatient imaging center? I mean, the quality there is going to be the same. There's really no difference. But yet because the facility at the hospital, they can charge more for those services. So how does that apply to the Medicare Advantage world? Well, in the Medicare Advantage world, the insurance company the Medicare Advantage company will contract with a diagnostic center and for a certain percentage of Medicare allowable and so that same Medicare Advantage company will also contract with the hospital system in that particular location or that particular county. And as a primary physician, and as specialists, if we don't manage that bottom line, then there's going to be less money in our pockets. It's basically what it boils down to. And so, it behooves us to understand that if we send our patients in a Medicare Advantage plan to a hospital, that hospital may end up charging that insurance company $1,500 for an MRI versus $500 That could be charged at a freestanding diagnostic facility. So that is a very important point that I can't emphasize enough. Because we as physicians and primary care physicians need to understand how to manage our patient population, how to get them the best care, but also how to provide the most cost effective care for that patient in your patient population. 

So that's one way to save money. Another way that you can save money is by doing procedures in your office. So for a while I actually used to perform carotid ultrasounds as well as vascular studies in my office, and those procedures were performed at no cost to the patients, because I knew that if I were to send those patients for those procedures, at a diagnostic center, the diagnostic center would be charging the insurance company. And those monies would be removed from my pool of money to care for my patients. So again, these things are really discussed in detail in my Llama course, that allows us to actually look at the reports look at the reimbursements look at the the differences and facilities where these tests have been performed, to be able to help you manage your population best. And so performing tests at a having tests performed at an outpatient imaging center will save your money having tests performed in your office, like having a bone density machine or having a carotid echo, carotid ultrasound or an echocardiogram, all these tests are performed better performing with your office are performed, and are not reimbursed the same way that it would be reimbursed at a diagnostic center. So the only cost that you would have is the cost for the technician, the cost to have the actual machine in your office, as well as the cost for reading those tests by the specialist. So that's another thing that I wanted to bring up during this Money Tree series. Because all these things have an effect on your capitation has has an effect on your managed care monies. And the more you know about this, the more potential you have to save money and eventually also make additional funds or have surpluses in your managed care population funding. 

Now, if you look at the office procedures, you know, you may not only have managed care patients in your practice, so you may have fee for service patients, you may have BlueCross BlueShield, or a United or some of the other payers in your community, you may have Medicare in your practice and those procedures that are performed on those patients that are fee for service would actually be reimbursed whatever the Medicare allowable rate is. And that's a great opportunity for you to increase your revenue and your practice by performing those tests in your office, rather than having those tests on a diagnostic center at the hospitals. So that's something that I used to do routinely. And now we have a centralized testing facility at our current practice, so we don't have to do that. But again, it's another way of potentially increasing your revenue in your practice. So I know this was a short episode, but that's what the money tree series is, are they're not long episodes, they're episodes that can provide you the nuggets that you need to improve your managed care population funding to and also manage your patient population more effectively. And I encourage you to download the money tree series, one pager that details the different aspects of the payment tree. And you can do so at As well as remember, you can always sign up for the online course at And the introductory course is free and allows you to get ahead of the game in understanding Medicare Advantage if you don't have any knowledge of it at all. And as always, we always invite feedback and want you to  share this episode with your friends and anyone that you think might benefit from it. Add it to that feedback allows me to understand what you guys want to hear more about. And I really thank you for listening to this episode and keep practicing impossible.