Obama Budget Seeks Prior Authorization For Medicare Imaging
Full article reprinted from "The Gray Sheet" - March 2, 2009
Find out how President Obama's budget proposal for fiscal year 2010 includes a plan for Medicare to contract with private third parties to pre-review and approve imaging payments on a scan-by-scan basis.
The Feb. 26 budget 1overview projects $70 million in savings through 2014 and $260 million through 2019 under the line item, "Ensure that Medicare makes appropriate payments for imaging services through the use of radiology benefit managers."
The budget documents provide no additional details on the item, which is one of several savings measures intended to generate an approximately $634 billion reserve fund over 10 years to help pay for broader health care reform.
A senior administration official, however, identified a report put out by the Congressional Budget Office in December, entitled 2"Budget Options, Volume 1: Health Care," as the source of most of the savings proposals. The report discusses using radiology benefit managers for prior authorization of imaging services, though it projects significantly more savings than the administration's proposal does ($220 million over five years and $1.1 billion by 2019).
RBMs Credited With Curbing Private Payer Spending
"Under the option, the Medicare program would hire radiology benefits managers (RBMs) to make decisions on its behalf about whether to approve payment for a specific imaging service ordered by a physician," CBO explains. "Those decisions would be based on criteria formulated from recommended guidelines for clinical practices, including guidelines developed by medical specialty societies, and Medicare would not pay for services that were not approved."
A similar protocol is already applied by many private health insurers to slow growth of spending on imaging services, and some in Congress have expressed interest in transferring the process to Medicare (3"The Gray Sheet" July 2, 2007, p. 8).
The federal government says that Medicare outlays for imaging doubled between 2000 and 2006; there is a strong belief among many policy-makers that part of the increase is due to inappropriate use of the expensive - and potentially profitable for physicians - technologies.
The Government Accountability Office 4recommended last July that CMS consider implementing prior authorization or a similar gatekeeper policy to help curtail the rapid growth (5"The Gray Sheet" July 21, 2008, p. 3).
Bob LaGalia, president of radiology benefit manager firm National Imaging Associates, says inclusion of the provision in the budget request is the result of several years of education efforts in Washington, D.C.
"We spent a lot of time raising awareness around the issue," LaGalia said in an interview. "The idea here is to use the right type of imaging for the patient at the right time given their symptoms and their need, and what we've found in our business is that you can do that."
He expects the savings generated for Medicare from prior authorization to be closer to CBO's estimates than to the administration's more conservative figures.
Manufacturers, Doctors Push Appropriateness Criteria
Imaging equipment makers and radiologists, meanwhile, strongly disagree with the approach, charging that it inappropriately takes medical decisions out of the hands of doctors.
"It would really be a precedent-setting change to the Medicare fee-for-service program, where beneficiaries and physicians decide what is medically necessary, not a private company looking over their shoulder," said Madeleine Smith, senior VP for payment and health care delivery policy with AdvaMed.
In an interview, Smith pointed out that there has been no independent analysis to validate the savings claimed by radiology benefit managers. The only data comes from the RBMs and private insurers. Also, she notes that although RBMs say they apply clinical criteria developed by specialty societies such as the American College of Radiology, the RBMs do not tend to make their review processes public, so it is hard to confirm their validity.
"There is a big black box out there, both in terms of what they are doing and in terms of ... their claims for savings," she said.
A coalition of imaging companies, radiologists and patient groups to which AdvaMed belongs is pushing CMS to focus instead on implementing provisions enacted last year in the Medicare Improvements for Patients and Providers Act, which they say address the goal of curbing inappropriate imaging use without taking medical decision-making away from doctors.
That law requires facilities that provide advanced diagnostic imaging services to become accredited, and calls for testing the feasibility of implementing clinical appropriateness criteria for physicians who refer patients for advanced imaging (6"The Gray Sheet" July 14, 2008, p. 18).
"We urge Congress to incentivize the use of expert physician-developed appropriateness guidelines, which when combined with computerized physician order-entry software, will educate physicians about ordering and performing the proper imaging studies for patients presenting with specific conditions," said Tim Trysla, president of the Access to Medical Imaging Coalition.
Budget Highlights Comparative Effectiveness, FDA
The documents issued by the administration Feb. 26 are billed as a "budget overview" and are short on program-level details. A complete budget request for fiscal year 2010 will be submitted to Congress in April.
The Department of Health and Human Services would get $78.8 billion under the proposal. An unspecified portion of those funds are for "building on" the $1.1 billion for health care comparative-effectiveness research included in the recently enacted economic stimulus package (7"The Gray Sheet" Feb. 16, 2009, p. 3).
The budget also includes more than $6 billion for the National Institutes of Health for cancer research, including for development of innovative diagnostics.
FDA is also highlighted in the overview. The agency should receive "a substantial increase to strengthen FDA's efforts to make food and medical products safer," the overview notes. The administration, however, provides further details only for food safety, where it plans to invest more than $1 billion to help prevent and control foodborne illness.
- David Filmore and Monica Hogan
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