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Scanning for a solution: increased diagnostic imaging use and costs have health plans looking for new ways to lower those trends.


* State of the Market: Billions of dollars are wasted annually from inappropriate use or duplication of radiology studies.

* What's Being Done: Some health plans have implemented radiology benefits management programs to improve quality and cost-effectiveness of imaging services.

* How They Work: Many require prior authorization of scans to verify the necessity of procedures and ensure the right tests are being ordered.

With $100 billion in annual radiology costs expected to double over the next four years, it's no wonder diagnostic imaging scans are the second-largest and fastest-growing expense for health plans behind pharmaceuticals.

Advances in imaging technology, direct advertising to patients, defensive medicine and an aging population are driving that trend.

There's also concern that physician ownership of in-office imaging equipment or free-standing centers is spiking a rise in use.

In 2007, 662 million diagnostic radiology scans, such as computed tomography, MRI, ultrasound, nuclear exams and positron emission tomography, were performed in the United States, according to the American College of Radiology.

That burgeoning number has health plan executives scratching their heads as to how many of those tests are actually medically necessary.

Industry estimates say more than 30% of imaging procedures are inappropriate, resulting in $3 billion to $10 billion of additional annual costs.

Now payers are scanning for ways to radiate escalating diagnostic imaging costs and utilization, and many are finding the answer in radiology benefits management programs. The largest--and what experts say is the most proven--part of that process comes from prior authorization of procedures to verify the necessity of imaging tests, and to ensure the right scan is being ordered.

While the precertification process isn't sitting well with some ordering physicians, Jane DuBose, director of health plan analysis for health care business information company HealthLeaders-InterStudy, calls it "the new reality" in managing radiology costs.

Making the Diagnosis

Medical technology comprises approximately 20% of the total cost growth of America's $2 trillion health care bill, according to an America's Health Insurance Plans report.

The average per-patient, per-month total imaging cost, according to analysis by the University of California, San Francisco and the Group Health Center for Health Studies, doubled from $229 to $443 between 1997 and 2006.

That's no surprise, since the costs of CT and MRI scans range from a few hundred dollars to more than $3,000 each. But while the two modalities are the biggest drivers of radiology costs, they're also the most commonly misused, said Dr. Gregg Allen, chief medical officer for radiology vendor MedSolutions. Abdominal, pelvis and head CT scans and MRIs of the lumbar spine and the brain top that list, he said.

Health plans are feeling the ill effects of increased advanced imaging use.

In 2008, Blue Cross and Blue Shield of North Carolina spent $214 million on high-tech imaging services. Other plans see similar trends, with year-over-year utilization rates topping 15% to 20%. Many are relying on radiology benefits management programs to help lower that trend. Today, 90 million Americans are covered by those programs, according to radiology vendor National Imaging Associates.

The Magellan Health Services company works with health plans such as Highmark to administer prior authorization for studies such as MR (MRI and magnetic resonance angiography), CT and PET imaging.

The process begins with ordering providers calling in or logging on to a Web site to describe a patient and the proposed scan, said National Imaging Associates' Associate Chief Medical Officer Dr. Michael Pentecost. Plan managers then review evidence-based guidelines from the American College of Radiology, American College of Cardiology and other accredited organizations to decide whether the test is appropriate. Approvals are authorized in real time.

About 80% of tests are approved immediately. Those deemed clinically inappropriate or requiring additional information, however, generally go through another review process with a vendor's nurse or clinician. Physicians can issue an appeal, and are provided with guidelines indicating why the case wasn't approved, Pentecost said. They're also offered a peer-to-peer consultation with an on-staff clinician to discuss more-appropriate imaging services.


The goal of prior authorization isn't to arbitrarily decrease the number of studies being done, said Allen, "but to assure that services being rendered are consistent with evidence-based criteria about when and where to use them.

"We also look to eliminate redundant testing," he added. "We're aware of what previous imaging patients have had."

The Center for Information Technology Leadership at Harvard University estimates about 20% of hospital radiology tests are duplicates, resulting in nearly $20 billion annually of wasted spending nationwide.

Technology has a hand in the radiology management process. MedSolutions uses a prior authorization data engine called Predictive Radiology Intelligence to identify when requests are appropriate based on past observation and physician ordering trends. For instance, data can signal if a given provider is prone to inappropriately ordering certain studies for a given indication. "Those are the requests we'll want to review in our prior authorization process," Allen said.

Growing utilization led the North Carolina Blues plan to put a similar pre-certification program in place in 2007 for outpatient, nonemergency imaging scans. "We focus on performing the fight test at the right time for the right diagnosis," said Vice President Debra MacClennan.That's accomplished with the help of its radiology vendor, American Imaging Management.

In 2007, WellPoint took radiology benefits management to a new level when it acquired its own imaging provider. American Imaging Management offers WellPoint and other plans such solutions as its OptiNet application to manage imaging provider networks using cost and quality metrics, and Imasis, what it calls the industry's first fully functioning and customizable Web-based call center application that gives plans the ability to manage outpatient diagnostic imaging within their existing call centers.

Third-party radiology management companies aren't part of all plans' strategies. Medical Mutual of Ohio opted to review back, knee, foot and abdomen MRI and PET scans in-house. Along with concerns about additional expense, said Paula Sauer, vice president of care management, "We didn't want to make providers have somewhere else to call or another process to follow. They're accustomed to working with our team, and we do our best not to create hoops for them.

"We look to see if there is overutilization and decide which services require prior authorization. For instance, we may reject a CT of the lumbar back request in lieu of less-costly services, such as ultrasound or physical therapy. Clinical literature suggests conservative treatment is appropriate. Our protocol isn't to go immediately to an MRI but follow other steps, because more than 90% of cases are resolved in just a few weeks," she said.

However, cost isn't always a factor, according to MedSolutions' Mien. "Sometimes the precertification process suggests a patient get a more expensive MRI than a CT because it's more appropriate and proven to safeguard the best clinical outcomes," he said.

Quality and Safety

Precertification isn't the only part of radiology benefits management programs.

Many plans are educating providers about the appropriate use of diagnostic imaging by disseminating nationally recognized, evidence-based guidelines and posting them on their Web sites. "We want to make that information as transparent as possible," said Dr. Carey Vinson, vice president of quality and medical performance management for Pennsylvania-based Highmark.

The plan also requires providers to undergo a privileging process to be reimbursed for imaging expenses, and requires American College of Radiology accreditation for some procedures. "The process requires specific training and competency around imaging equipment and interpreting diagnostic scans." he said. Standards also address image quality, radiology technician qualifications and patient safety safeguards.

There are growing safety concerns associated with diagnostic imaging. "With free use of tools like CT. everyone is starting to pay more attention to cumulative radiation dosage" said Allen. "We're geared to look at medical necessity to outweigh risks of exposure."

A CT of the chest, for instance, exposes a patient to 80-to-400 times the radiation of a chest X-ray. An abdominal CT results in a radiation dose 50 times greater than an abdominal X-ray, according to AHIP's report.

Before implementing their programs, many health plans faced average annual diagnostic imaging cost growth rates of 12% to 20%. Those numbers now are dipping into the low single digits. Aetna saw its imaging costs for its fully insured, traditional business drop from the mid-to-high teens to a 4% average increase from the first quarter of 2007 through the end of 2008.

MedSolutions' health plan clients are enjoying anywhere from $1.50 to more than $3 in per-member, per-month savings on imaging services, said Allen. In fact, one plan cut more than $2 million off MRI and CT costs in under a year, he said.

Learn More

Aetna Health and Life Insurance Co.

A.M. Best Company # 08189

Distribution: Brokers, consultants, retail network (pharmacy products)

Blue Cross Blue Shield of North Carolina

A.M. Best Company # 64070

Distribution: Agents, brokers, consultants, exclusive sales force, direct

Highmark Inc.

A.M. Best Company # 64010

Distribution: Captive sales force, brokers, direct

Medical Mutual of Ohio

A.M, Best Company # 04693

Distribution: Brokers, in-house sales

WellPoint Inc.

A.M. Best Company # 58180

Distribution: Agents, brokers, in-house sales

For ratings and other financial strength information


The Right Image.

Private payers may not be the only ones to reap the benefits of decreasing diagnostic imaging utilization. Medicare is taking initial steps to drive similar trends. In March, the Medicare Payment Advisory Commission issued a report recommending that Medicare institute quality guidelines for "providers who bill Medicare for performing and/or interpreting diagnostic imaging studies." The proposal would require the government to draw up the quality standard, such as requiring that providers are accredited by the American College of Radiology. Also, Medicare would hire independent vendors to verify that providers meet the criteria, according to Eli Research's Medicine and Health's Managed Care Report.

Although the guidelines would only apply to Medicare, the article also says that private health plans would still benefit from being able to specify, if they wished, to only pay for imaging services furnished by Medicare-approved providers.


Medicare spending on advanced diagnostic imaging doubled from just under $7 billion in 2000 to more than $14 billion in 2006, according to radiology vendor National Imaging Associates.

The program could see significant savings from implementing a radiology management structure similar to what many commercial payers already have adopted. Third-party radiology benefits management provider MedSolutions' analysis found Medicare could save anywhere from $11.6 billion to $18 billion in diagnostic imaging costs over the next 10 years by implementing a radiology benefits management program. During the first year alone, Medicare spending on advanced imaging services could be reduced by about $470 million to $720 million.

The U.S. health care reform debate also is focused on ways to drive down diagnostic imaging utilization. President Obama's 2010 budget proposal estimated radiology management could yield potential savings of about $260 million over a decade.
By the Numbers: Imaging Use
Estimated U.S. utilization by modality in 2007, based on procedure
counts for Part B nonmanaged care Medicare enrollees. *
(all figures in millions except last column)

                       Part B        All          All   Per 1,000
Modality              Non-HMO   Medicare   Population     Persons

CT                         22         28           83         274
MR                          7          9           26          85
Ultrasound                 39         50          151         502
Interventional             10         13           38         126
Nuclear Medicine           11         14           41         136
PET                         1          1            2           7
X-Rays including
  mammography              84        107          321       1,065
All diagnostic
  radiology               172        221          662       2,195
Radiation oncology         10         12           37         123

* Estimated proportion of Medicare enrollees for 2007

Source: American College of Radiology
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Article Details
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Title Annotation:Health/Employee Benefits: Radiology Treatment
Comment:Scanning for a solution: increased diagnostic imaging use and costs have health plans looking for new ways to lower those trends.(Health/Employee Benefits: Radiology Treatment)
Author:Chordas, Lori
Publication:Best's Review
Geographic Code:1USA
Date:Oct 1, 2009
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