RadNet Announces the Estimated Impact on 2014 Revenue From Changes in the
Recently Announced Medicare Fee Schedules
LOS ANGELES, Dec. 16, 2013 (GLOBE NEWSWIRE) -- RadNet, Inc. (Nasdaq:RDNT), a
national leader in providing high-quality, cost-effective, fixed-site
outpatient diagnostic imaging services through a network of 251 owned and
operated outpatient imaging centers, today announced that it completed an
initial analysis of changes for 2014 in the Medicare Physician Fee Schedule
and the Hospital Outpatient Prospective Payment System (HOPPS) rates as
determined by the Final Rule as released by the Centers for Medicare &
Medicaid Services (CMS) on November 27^th.
Based upon the recently released Medicare reimbursement schedules, RadNet
estimates its 2014 Medicare revenue will be reduced by between $20 million and
$22 million ^(1).
Dr. Howard Berger, President and Chief Executive Officer of RadNet, noted,
"Medicare reimbursement, particularly for frequently performed MRI exams, was
reduced more severely than in CMS' initial proposal released during the
summer. At that time, as discussed on our second quarter financial results
conference call, we estimated as much as a $15 million impact on our Medicare
Revenue in 2014 based upon CMS' initial proposal.In the final rule, CMS more
drastically cut the reimbursement of some of the more frequently performed MRI
procedures as compared with CMS' initial proposal."
Dr. Berger added, "Although we are disappointed with the increased negative
impact on our revenue from CMS's Final Rule, we previously announced a cost
savings initiative designed to reduce our operating expenses by approximately
$30 million on an annual basis.The opportunity for these cost savings comes
about because of the relative scale of our operation and our ability to
capture operating efficiencies as we grow.This is unique in our industry,
which is mainly comprised of smaller operators and "mom and pop"
competitors.We believe that over time these reductions in Medicare
reimbursement will cause more of these smaller operators to close, effectively
consolidating procedural volumes with the remaining imaging center owners that
are able to withstand these pressures.We expect to ultimately benefit from
this consolidation and contraction in industry capacity."
(1) RadNet's estimates exclude any impact from changes in the Medicare
Sustainable Growth Rate (SGR) formula.RadNet's analysis assumes the same
conversion factor in 2014 as was applicable in 2013.This conversion factor
is applied to Medicare Relative Value Units (RVUs) in the determination of
About RadNet, Inc.
RadNet, Inc. is the leading national provider of freestanding, fixed-site
diagnostic imaging services in the United States based on the number of
locations and annual imaging revenue.RadNet has a network of 251 owned and/or
operated outpatient imaging centers.RadNet's core markets include California,
Maryland, Delaware, New Jersey, New York and Rhode Island. Together with
affiliated radiologists, and inclusive of full-time and per diem employees and
technicians, RadNet has a total of approximately 6,300 employees. For more
information, visit http://www.radnet.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
include, but are not limited to, statements related estimation of changes in
Medicare reimbursement and its impact on RadNet. These forward-looking
statements involve known and unknown risks, uncertainties and other factors
discussed in RadNet, Inc.'s filings with the Securities and Exchange
Commission (the "SEC"). Any forward-looking statements speak only as of the
date of this press release and, except to the extent required by applicable
securities laws, RadNet, Inc. expressly disclaims any obligation to update or
revise any of them to reflect actual results, any changes in expectations or
any change in events. If RadNet, Inc. does update one or more forward-looking
statements, no inference should be drawn that it will make additional updates
with respect to those or other forward-looking statements. For additional
information concerning risks, uncertainties and other factors that may cause
actual results to differ from those anticipated in the forward-looking
statements, and risks to RadNet, Inc.'s business in general, please refer to
its SEC filings, including its Annual Report on Form 10-K for the fiscal year
ended December 31, 2012, as amended.
CONTACT: RadNet, Inc.
Mark Stolper, 310-445-2800
Executive Vice President and Chief Financial Officer
RadNet, Inc. Logo
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