Radiology Benefits Managers Offer Medicare Cost-Saving Option For Imaging

From the July 2, 2007, issue of "The Gray Sheet"

An insurance company strategy to rein in perceived overuse of imaging services has gained traction in Congress for its potential as a Medicare cost-saver.

The approach: private payers contract with third parties to act as "gatekeepers" for imaging coverage. Radiology benefits managers (RBMs), as they are called, review physicians' imaging study orders, excluding inpatient services, for prior authorization before allowing coverage.

RBMs argue that inappropriate use of high-cost imaging services like computed tomography (CT), magnetic resonance imaging (MRI) and positron emission tomography (PET) happens too frequently and reducing it can increase quality of care and save significant money.

"All of these kind of technological advances from the device standpoint are helping to drive more use, more indications, and frankly more inappropriate use of the studies because physicians really aren't catching up as quickly as the technology is evolving," said Gregg Allen, chief medical officer of MedSolutions, a Tennessee-based RBM.

Physicians and imaging equipment makers refute claims of rampant overuse and are skeptical about taking too much decision-making power out of doctors' hands. But key members of Congress are clearly intrigued.

Imaging In Government Crosshairs

The RBM industry estimates that more than half of all commercially insured lives are covered under some form of radiology benefits management.

According to MedSolutions, the radiology management sector has seen annual growth of about 60% over the past five years.

About 60%-65% of requests are easily approved by the nurses who receive them at MedSolutions' call centers, Allen said, while others are denied or referred to the company's medical directors for further analysis.

Other major RBM players include Magellan Health Services/National Imaging Associates, American Imaging Management and CareCore National.

The RBM industry growth comes as the Medicare Payment Advisory Commission (MedPAC) and Congress seek to curb Medicare imaging spending using two different strategies: cutting payments and implementing standards to reduce utilization volume.

A proposal in the former category for capping Medicare imaging payments for physicians at hospital outpatient levels was approved by Congress in last year's Deficit Reduction Act and went into effect in January.

The payment cuts have met strong resistance from radiologists and manufacturers.

Meanwhile, RBMs offer an imaging utilization-based cost-cutting option.

Last fall, Rep. Nathan Deal, R-Ga., circulated draft legislation that would have exempted physicians from the DRA cuts if they enrolled in a three-year pilot study requiring preauthorization of imaging services by an RBM.

While no legislation has been introduced yet this year, both the Senate Finance Committee and the House Ways and Means and Energy and Commerce committees are actively looking at the potential of using RBMs to cut costs in fee-for-service Medicare.

Stanford Group health care analyst David Blaszczak says he believes legislation mandating a Medicare demonstration program could be passed as early as this year.

MedSolutions' Allen agrees. "I think they're going to be forced to do some form of management over and above just cutting rates," he said.

"The issue here now, especially in the high-tech area, is not so much how much these studies cost," he said. "It's really much more about how often they're being used, and today fee-for-service Medicare has no particular constraints on that."

GAO Report Pending

Another sign that imaging legislation including RBM provisions could show up in the near term is that the Government Accountability Office is working on a report, due out in November, analyzing trends of imaging utilization under Medicare.

Sens. Gordon Smith, R-Ore., and Jay Rockefeller, D-W.V., requested the GAO study last August.

According to GAO Health Care Director Bruce Steinwald, the report will examine strategies CMS, private payers and others have used to address quality and growth of imaging services, including the use of RBMs.

Steinwald told "The Gray Sheet" that the study will consist of two arms: a quantitative arm analyzing hard numbers from Medicare claims data to track services and spending, and an interview-based qualitative arm.

As part of the latter effort, GAO staffers are interviewing stakeholder groups, including MedPAC, physicians, manufacturers, patient groups and radiology benefit management firms on issues of imaging quality, physician credentialing and other policy initiatives.

American Imaging Management VP-strategic services Paul Danao says his firm has been providing information in response to questions from congressmen and others involved in Medicare policy. According to Danao, the questions are sophisticated and all focus on prior authorization.

A spokesperson for Rockefeller noted that the senator would wait for the results of any such report before taking a public position on RBMs.

Meanwhile, Stanford Group analyst Blaszczak said he has received signals that the Congressional Budget Office might analyze proposals for using RBMs with Medicare within the next two or three months, which, if true, would be a strong sign that a bill is in the offing.

A CBO spokesperson said that the office does not release scoring plans until a bill is sent to committee.

An RBM demonstration project proposal would not likely move through Congress on its own, but there are some larger pieces of legislation expected to be introduced this fall that it could latch onto.

The first is a bill to mediate a large cut scheduled for physician payments next year and another will be aimed at preserving the State Children's Health Insurance Program, or SCHIP. Both bills would require Congress to find offsetting savings, and RBMs could fit that role.

Physicians, Industry Push Back

MedSolutions' Allen acknowledged, however, that physicians do not like being second-guessed and in response have offered resistance to the RBM model.

The American College of Cardiology, in particular, has lobbied against an RBM cost-containment approach for Medicare. ACC points out that RBMs often use general radiology guidelines, rather than specialty-specific guidelines, to drive utilization review decisions. A guideline for radiologists may not appropriately manage a patient in cardiac care, a group spokesperson explained.

ACC also argues that RBMs can hinder timely access to diagnostic imaging and add a significant and costly burden to physician practices.

In a November 2006 letter to Deal in response to his draft legislation, ACC urged a "pilot program utilizing practice guidelines and appropriateness criteria developed by national specialty societies" as an alternative to RBMs.

The Access to Medical Imaging Coalition (AMIC), formed in 2006 by imaging manufacturers and physician and patient groups to lobby against the DRA cuts, is also expressing concerns about the reach of benefits management firms.

"Structuring a system that pays people to say no, denies coverage, sounds like a physician hassle factor rather than something based on science," AMIC Executive Director Tim Trysla told "The Gray Sheet."

- Chloe Taft

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