CMS Preps New Payment Models
Health systems and imaging providers are being warned to prepare for a new wave of CMS payment and innovation models. Policy briefings indicate these models will continue to push procedures to lower-cost outpatient and mobile settings. This will intensify competition and force providers to differentiate on efficiency and quality reporting.
The push for "site-neutral" payments is gaining significant bipartisan momentum, aiming to equalize Medicare reimbursement for services whether performed in a hospital outpatient department or a freestanding clinic. The Congressional Budget Office estimates that broader site-neutral reforms for services like diagnostic imaging could save Medicare up to $157 billion over ten years, creating a powerful incentive for CMS to accelerate this shift. This payment pressure is fueling massive consolidation among radiology providers. From 2014 to 2023, the number of practices affiliated with radiologists fell by 14.7% even as the number of radiologists grew 17.3%. During that same period, the number of practices with 100 or more radiologists exploded by nearly 350%, shifting market power to larger, often multispecialty, corporate entities. The site-of-care shift is already well underway, with approximately 40% of all radiology volume now performed in outpatient centers rather than hospitals. Projections show standard outpatient imaging growing by 10% and advanced imaging—particularly PET, ultrasound, and CT—growing by nearly 14% over the next decade. The U.S. mobile medical imaging market is directly benefiting from these trends, valued at over $424 million in 2023 and projected to reach nearly $549 million by 2029. The growth of some 6,000 Ambulatory Surgical Centers (ASCs) is a key driver, as these facilities often rely on mobile imaging to support procedures pushed out of the hospital setting. Hospitals are not standing still; many are aggressively expanding their own freestanding imaging footprints through acquisitions, joint ventures, and new construction to capture this migrating volume. This strategy allows health systems to compete directly with independent centers and mobile providers while retaining referrals within their network. While imaging volumes are growing, radiologists face significant financial strain. Even as they performed more services, inflation-adjusted Medicare reimbursement for radiologists fell by nearly 34% between 2005 and 2021, forcing practices to prioritize efficiency and seek lower-cost service delivery models. To cope with financial pressures and staffing shortages, outpatient providers are the earliest adopters of efficiency-focused technology. This includes AI-driven workflow automation and teleradiology platforms, which are becoming essential for managing larger, geographically dispersed networks created by consolidation.
