Forsyth healthcare providers compete to operate new MRI scanner

Two Forsyth County healthcare providers are competing for permission to operate a new MRI scanner as a lawsuit challenging the arrangement moves through the courts.

The two major healthcare players in Forsyth County are competing for state approval to operate an additional magnetic resonance imaging, or MRI, scanner, while a lawsuit by a Winston-Salem surgeon challenging the law regulating the devices wends through the court system.

The 2019 State Medical Facilities Plan prepared under the direction of the state Department of Health and Human Services finds a need for an additional fixed-location MRI scanner in Forsyth County, in addition to the 17 that are already in place.

Wake Forest Baptist Outpatient Imaging, a joint venture between Baptist Hospital, Wake Forest University Health Sciences and Tennessee-based Outpatient Imaging Affiliates, is seeking approval to operate an MRI scanner in Kernersville, where it has operated a mobile scanner since March. Rival Novant Health Imaging Piedmont wants to add the new MRI scanner to its facility in southwest Winston-Salem, where it already has two scanners.

The two applicants made their presentations during a hearing on Monday morning at Kernersville Town Hall. Representatives of Cone Health monitored the short hearing.

“Our proposal to install this new, fixed MRI scanner in Forsyth County will greatly improve local access to high-quality, cost-effective services for all patients, especially here in eastern Forsyth County,” said Dena Webb, the radiology administrator at Wake Forest Baptist Outpatient Imaging (pictured left in feature photo), “and will establish a new, cost-effective provider of fixed MRI services in Kernersville.”

Novant Health representatives argued that there’s a greater need for the new scanner in Winston-Salem.

“When you look at the MRI data, one thing is perfectly clear: The MRI scanners in Winston-Salem are operating at extremely high capacity,” said Michael Reese, a regional vice president for MedQuest Associates (pictured right in feature photo), speaking on behalf of Novant Health Imaging Piedmont.

Reese also said that residents across the county “have easy access to MRI services,” noting that there are 13 MRI scanners in Winston-Salem, and Novant operates two already in Kernersville and one in Clemmons.

North Carolina is one of 36 states, along with the District of Columbia, that requires healthcare providers to get state approval before expanding facilities or services like MRIs, according to the National Conference of State Legislatures.

The purpose of so-called certificate of need laws, according to the conference, is “to control healthcare costs by restricting duplicative services and determining whether new capital expenditures meet a community need.”

But Dr. Gajendra Singh, a Winston-Salem surgeon, argues in a lawsuit against the state Department of Health and Human Services that the law creates exactly the opposite outcome, driving up costs for healthcare consumers.

Singh’s lawsuit says he “discovered that patients in his geographic areas were struggling to afford the often exorbitant cost of diagnostic scans charged by local providers — and more, that patients were finding it almost impossible to determine their out-of-pocket costs upfront.”

In 2017, he founded Forsyth Imaging Center, which currently utilizes an X-ray machine ultrasounds and computerized tomography “to offer patients a way to obtain scans at cheaper, more transparent rates than local providers were willing to offer.” He also operates a mobile MRI scanner, but contends it isn’t cost effective.

Singh’s lawsuit argues that North Carolina’s certificate of need law violates the North Carolina Constitution’s prohibition against monopolies.

Novant Health currently operates 10 out of 17 of the fixed MRI scanners in Forsyth, while Baptist Hospital operates six, and Wake Forest Baptist Outpatient Imaging, which is part of a partnership with radiologists in the Baptist Hospital system, operates one.

The office of the state Attorney General argued in a motion to dismiss the lawsuit that Singh was free to apply for a certificate of need to operate the new fixed MRI cited in the 2019 State Medical Facilities Plan. Since he did not make an application, the state argued that he lacked standing to sue. Singh countered that “the total cost of pursuing an MRI-CON application to completion often exceeds $400,000, with no guarantee (and for small providers like Dr. Singh, little hope) that the applicant will obtain a CON.” Singh’s lawsuit cleared the first hurdle on Nov. 20 when a superior court judge denied the Department of Health and Human Service’s motion to dismiss.

David Meyer, a consultant who helped Wake Forest Baptist Outpatient Imaging prepare its application for approval to operate the new MRI, said surgeons who want to bypass established providers to operate their own MRI scanners also have a financial stake.

“Mostly the people you’ll find really pushing for [overturning the law] are surgeons,” he said. “Surgeons want to develop their own surgery centers because it’s very lucrative. Physicians get paid their professional fee, but there’s also a facility fee that’s paid to the facilities.”

Both of the applicants for the new fixed MRI argued their proposals present the best options for containing costs.

“Our proposal is an effective alternative for extending access to the medically underserved,” said Webb, speaking for Wake Forest Baptist Outpatient Imaging. “Specifically, we project the highest Medicaid payer mix and the greatest percentage of charity care and self-pay write-offs as a percentage of gross revenues.”

In a table comparing Year 3 projections by both applicants, submitted to the state by Novant Health Imaging Piedmont, Wake Forest Baptist Outpatient Imaging anticipated that 6.7 percent of its patients would be on Medicaid, 1 percent would be charity care and 0.5 percent would be self-paying. In contrast, 5.0 percent of Novant patients would be Medicaid, 0.4 percent would be charity care and 3.6 percent would be self-paying. Novant projects that 35.3 percent of its patients would be on Medicare, compared by 11.4 percent by Wake Forest Baptist Imaging.

Novant Health Imaging Piedmont argues that its proposal to add a third scanner to its facility in Winston-Salem will best serve residents because 65 percent of the county’s residents live in the city and a higher proportion of uninsured residents live there.

Wake Forest Baptist Imaging counters in a written commentary submitted to the state: “There is no enhanced geographic benefit achieved by the Novant proposal. In sharp contrast, WFBI proposes to develop a fixed MRI scanner in Kernersville, and specifically in a facility that does not currently have a MRI scanner. Therefore, the WFBI proposal provides the greatest benefit to Forsyth County residents from the perspective of improved geographic access.”

Novant’s written commentary heaps ridicule on Wake Forest Baptist Imaging’s argument.

“Considering the population size of Kernersville with approximately 25,000 residents and the existing resources — two fixed MRI sites and three mobile MRI sites currently available, the approval of another MRI scanner in this geographic area is not warranted,” the commentary states.

“To put this in perspective, Yadkin County, which borders western Forsyth County, has a total population of 38,729 and does not have access within the county to either fixed or mobile MRI services.”

Celia Inman, a project analyst with the state Healthcare Planning and Certificate of Need Section, is assigned to produce an agency finding determining which of the applicants will be granted permission to operate the new scanner. Meyer, the consultant assisting Wake Forest Baptist Imaging, said the review started on Nov. 1 and takes 150 days, so a decision can be expected by the end of March.