Imaging charges vary among states

February 12, 1992

A survey of group health charges in the capital cities of 17 statesdisclosed huge variations in the 1991 reimbursement rates forMR and CT procedures. Information on charges was gathered fromthe files of the Group Health Insurance Association of America,a

A survey of group health charges in the capital cities of 17 statesdisclosed huge variations in the 1991 reimbursement rates forMR and CT procedures. Information on charges was gathered fromthe files of the Group Health Insurance Association of America,a trade group representing indemnity insurers.

Usual and customary charges peaked at $1515 for an MRI lumbarspine scan with contrast in Albany, NY. The usual charges forthe same procedure in Denver averaged $977, or 55% lower. Denver'srate was the lowest among the 17 cities.

Boston topped the list for the highest charges for MRI lumbarspine scans without contrast. The average $1027 charge there was24% more than the average charge of $822 in Denver.

The average indemnity insurance charge for a CT lumbar spineseries with contrast varied by $312 among the sites surveyed.Insurance companies' fee-for-service plans were billed an averageof $877 in Albany, while the typical bill for the same procedurein Denver was $565, excluding contractual deductions.

These variations reflect flaws in the nation's billing systemfor high-tech diagnostic services, said Joseph J. Shaute, a researcherwith Crawford & Company, an Atlanta-based risk managementfirm.

Shaute compiled the data for Risk Review, a magazine distributedto Crawford's insurance company and self-insured corporate clients.

"The data tell me that someone needs to reassess how weare determining these rates," he said.

The charge pattern in the selected capital cities for indemnitycompanies bears little relation to the pattern of workers' compensationrates charged for the same procedures performed in those states,Shaute said.

The widest variation between customary insurance charges andthe workers' compensation rate was found in Lansing, MI, whereMRI providers typically charged fee-for-service insurers $1001for an MRI lumbar study without contrast. That's about twice the$497 rate allowed by the state workers' compensation system.

Like the indemnity claims, workers' compensation rates variedwidely from state to state, Shaute said. The approved rate fora lumbar MRI scan without contrast ranged from $497 in Michiganto $1215 in Nevada.

Crawford and Company compiled the data to help its health-carepayer customers comprehend inconsistencies in the payment forhigh-tech diagnostic procedures, according to Shaute. The firmunderwrites a preferred provider organization that includes about17,000 health providers and advises some of the nation's largesthealth-care payers about cost-containment.

"We believe bringing this information to the attentionof our readers will cause them to reflect on how they are administeringtheir MRI claims," Shaute said. "The question we areposing is whether they are delivering services as well as theycan. The answer is obviously no, considering the wide range ofcost that exists for MRI."