WASHINGTON (AP)--Medical-imaging equipment makers are lobbying to overturn Medicare cutbacks after weathering some of the worst sales numbers in recent memory.
Congress made the cuts following criticism that some health-care providers were performing more tests than necessary simply to boost revenue. But equipment makers such as General Electric Co. (NYSE:GE) (GE), and providers of diagnostic tests such as Alliance Imaging Inc. (NYSE:AIQ) (AIQ), are waging a campaign to convince federal lawmakers that the six-month-old policy is having a negative impact on public health.
The cuts took effect in January and reduce how much doctors are paid for running X-rays, medical resonance imaging and other tests on patients enrolled in the government-run health program for seniors. The Medicare payment changes, which are expected to save $2.8 billion over five years, sent sales of scanners made by GE, Siemens AG (NYSE:SI) (SI), Toshiba Corp. (Tokyo:6502) (6502.TO) and others tumbling more than 20% last quarter, according to data provided by an industry group.
Opponents argue that if fewer doctors offer in-office imaging, patients will have to travel further and wait longer for medical scans that detect cancer, heart disease and other ailments.
"When you see legislation like this that retards and restricts the availability of diagnostics, it's just a bad long-term decision that can negatively affect people's health," said Joe Hogan, president of GE's health- care business.
Medicare officials say they are monitoring whether patients are having trouble getting access to imaging. And they point out that payment reductions do not affect hospitals, where the majority of imaging services are performed.
For now, it appears there is little sympathy on Capitol Hill for the imaging industry, which had close to $25 billion in revenues last year, according to Kalaroma Information. There are no hearings on the issue scheduled, and Democrats and Republicans have vowed to trim Medicare spending further this year.
Imaging advocates have formed a lobbying group in Washington, dubbed the Access to Medical Imaging Coalition, which they say represents more than 75,000 patients and health-care professionals.
The group's public policy arguments aside, at least part of the motivation for their efforts is the impact Medicare cuts are having on the industry's bottom line. GE, which dominates the U.S. imaging market, said the payment cuts hurt its first-quarter sales by $150 million.
The company's health-care division spent nearly $250,000 lobbying Congress last year, according to public records cited by opensecrets.org.
