With reimbursement cuts back, the sector is reaching a breaking point.

In February, Congress failed to include an extension of the current reimbursement rates for Medicare doctors performing dual-energy X-ray absorptiometry, or DXA, the standard test for bone mineral density, and the most accurate way to detect osteoporosis, a disease that affects an estimated 80 million women, according to the National Osteoporosis Foundation. Effective March 1, Medicare payments for DXA were reduced by almost 50 percent, down from $98 to $56.

“56 is just a silly number, it’s not even in the ballpark for people buying new machines,” says Donna Fiorentino, legislative counsel for the International Society for Clinical Densitometry.

Supporters of DXA, like Fiorentino, have been frustrated for some time as they witnessed a constant back and forth from Congress over Medicare reimbursement for DXA.

When the Bone Mass Measurement Act passed in 1997, it introduced uniform coverage under Medicare Part B for DXA screening. But in 2007, reimbursements in the office setting—where about two-thirds of DXA scans are performed—dropped. According to a recent study co-authored by Fiorentino in the journal Health Affairs, rates plummeted from $140 in 2006 to $62 in 2010. Consequently, office-based DXA scans dropped by 70 percent. In 2010, scans reached the lowest point in the study period. Congress intervened and included a provision in President Obama’s Patient Protection and Affordable Care Act of 2010 to encourage DXA testing, and reimbursement rates were increased to $98 from 2010 through 2011.

But according to industry consensus, cuts introduced in March will have a significant impact on the bone densitometer market going forward.

The end of an era
Even before the latest round of cuts, private practices offering bone density testing never made much money from DXA scans to begin with.

According to Fiorentino, a new DXA machine will set small practices back anywhere from $45,000 to $90,000.

Laura Gustavson, skeletal health business leader for GE Lunar, says most private physicians lease their machines for roughly $650 to $850 a month, depending on product and software configuration.

Hologic, Inc. offers options to practices where they can expect to break even at about one patient per day.

But questions still remain about what doctors will do about DXA given the latest news from Washington.

“I think the smaller clinics won’t be doing bone density testing anymore because it’s going to cost them money,” says Jeff Rubinoff, vice president of Complete Medical Services, Inc.

David Denholtz, CEO of Integrity Medical Systems, Inc. predicts a similar market impact.

“When this hits, they [doctors] are going to say forget about this bone density stuff. They’ll get rid of their DXA machine, or when it breaks, they’ll just get rid of it.”

This could mean sellers will have to drop their prices.

“There will be more used machines out there and we’ll have to sell them for less,” says Denholtz.

At the same time, he thinks service and part sales will increase because private practices who hold out won’t buy a new machine if their current one breaks. Instead, they’ll be more likely to fix it.

Denholtz also speculates that if prices for machines come down low enough, due to the glut on the market, a bounce back could occur.

“People might say, you know, I thought those DXA machines were $30,000, I’m seeing them for $7,000. I think I’ll go out and get one.”

DXA migrates to hospitals
Many private practice physicians have already given up on DXA screening in their offices.

“People I’ve dealt with for years are either giving away their machine or not maintaining their contracts,” says Fiorentino. “We see a collapse of the folks that care for these patients, that whole structure is imploding.”

But a new structure is slowly forming in hospitals, which have not been affected by the same reimbursement cuts that private practices have been subjected to through the years.

“I think CMS wanted to see a shift, they wanted to pull the machine out of the doctor’s office and put them in the hospitals. The idea would be that machines would be used more,” says Fiorentino.

Complete Medical Services’ Rubinoff says that at one time, the bone densitometer side of his business was primarily focused in doctors’ offices. Today, it’s a combination of private practice, hospitals and imaging centers.

Hologic, a top manufacturer for bone densitometers along with GE, sees an increasing number of customers coming from hospitals as well.

“It used to be more private practices, but it’s probably 50-50 now,” says William Clarke, product marketing manager for skeletal health at Hologic. At the same time, Clarke says he sees more OB-GYN doctors in the private practice space offering DXA scans to patients.

“There’s a trend where a lot of women see their OBGYN as their primary care doctor; that’s where they go, that’s who they trust,” he says.

However, if a woman’s OB-GYN or primary care doctor doesn’t offer the service, it’s likely she’ll have to make a special trip to a hospital to get a scan, making it more difficult, particularly for elderly and disabled women, to get screened.

Rubinoff says this is likely to reduce the number of women getting scans to a further degree.

“It’s always had a low compliance rate. So if you can get patients to do it, the best way is to offer it in your office,” he says.

New recommendations for testing
Knowledge about osteoporosis as a disease, and the toll it can take on an individual’s life, has increased significantly in recent years.

Doctors who do prescribe a DXA scan for their patients 65 and older require it every 23 months since Medicare reimburses it on that schedule (younger women can be tested if they have certain risk factors). However, like many recent debates regarding recommendations for preventative screenings, medical experts have been locked in debate over just how frequently women should receive DXA scans.

A new study published by the New England Journal of Medicine in January offers a different set of recommendations from those currently endorsed by the U.S. Preventive Services Task Force.

The NEJM study suggests that if a woman’s initial scan came back healthy, she can wait 15 years before returning for a second exam. The study followed about 5,000 white women age 67 and older, some with healthy bone density and some with moderate to advanced osteopenia. Over a 15-year period, doctors tested the woman’s bone mass regularly to monitor how the disease developed, and found that it progressed slowly, leading researchers for the first time to scientifically reason how frequently women’s bone density should be tested.

OEMs focus on diversity
While there’s not much incentive to alter the technology for DXA, OEMs are looking to other opportunities within bone density screening to expand their portfolios.

Case in point: GE Lunar offers the Achilles quantitative ultrasound technology
in addition to its DPX and iDXA bone densitometry systems. It’s a low-cost, portable and non X-ray-based device that assesses a person’s risk for fracture, and GE has married it with DXA’s scoring system—the Tscore set by the World Health Organization based on bone density levels—to identify women who are high-risk and therefore prime candidates for a full DXA scan.

In addition, OEMs are keen on expanding DXA’s capabilities outside of bone health.

“I think you’re going to see growth in the use of DXA for other applications,” says Hologic’s Clarke. He’s talking about considering a whole new patient base for DXA screening, away from post-menopausal women. For instance, younger patients and men who have been prescribed certain drugs and therapies directly linked to decreased bone density. The company has also been assessing aortic calcification on DXA scans.

Although no scoring system has been established for this yet, doctors can refer patients to a cardiologist after seeing indications of calcification on the DXA scan. But the biggest opportunity for DXA outside of skeletal health, according to OEMs, lies in total body composition studies.

Hologic’s whole body DXA systems incorporate the National Health and Nutrition Examination Survey’s whole body composition reference data, and most recently, the company has received FDA clearance for additional body composition evaluations of visceral tissue, which measures inner body fat.

“It can give you an idea about how fat can affect your body, especially with obesity, diabetes and heart disease on the rise,” says Clarke.

Similarly, GE offers software called CoreScan, which can quantify visceral fat on its Lunar iDXA machine.

As OEMs fight for market share by adding new features and capabilities, one big question remains: how much will they be reimbursed for these new applications, if at all?

As for the latest round of Medicare reimbursement cuts for DXA screening, there will be another opportunity to address bone density after elections this fall, when Congress takes up the next Medicare physician payment cut, which is scheduled to take effect January 1, 2013.

DOTmed Registered Bone Densitometer - May 2012 Companies

Names in boldface are Premium Listings.
Domestic
Rick Ebling, Ebling Imaging LLC, FL
Tim Zoellner, Health Tech Solutions, FL
Moshe Alkalay, Hi Tech Int'l Group, FL
DOTmed Certified
Ed Ruth, Managed Medical Imaging, FL
DOTmed Certified
Jailyn Primus, Primus Xray, FL
Mark Forcier, JD Honigberg International, IL
John Gladstein, Medical Device Depot, MD
DOTmed Certified
Leon Gugel, Metropolis International, NY
DOTmed Certified
DOTmed 100
John Pereira, United Medical Technologies, FL
David Denholtz, Integrity Medical Systems, FL
DOTmed Certified
DOTmed 100
Olga Karagiannis, MHologic, MA
DOTmed Certified
DOTmed 100
Mark Piening, MEC Inct, OH
DOTmed Certified
Desmond Johnson, DEXAScanners, Inc., TN
Ben Williams, DEXA Solutions, LLC, WI
Don Settergren, IO Sales, WI

International
Haitham Khoury, MEDMACK, United Arab Emirates
Ricardo Tejada, RT Medical System Support, Dominican Republic
Kaushik Shah, K S BIOMED SERVICES, India
Gautam Sehgal, Ads diagnostic limited, India