The Government Accountability Office is urging Congress to require Medicare to adopt prior authorization procedures for outpatient imaging services, saying that the federal health program's current approach has allowed costs to balloon.
According to the GAO, from 2000 to 2006, Medicare Part B spending on imaging services more than doubled to $14 billion. In particular, spending on more technically demanding imaging studies, such as CT, MRI, and nuclear medicine, rose 17% a year, compared with 9% annual growth for less complex studies such as x-rays. Imaging studies have increasingly shifted to the outpatient sector and the proportion of physician income from imaging is steadily rising, said the GAO in its report, “Medicare Part B Imaging Services.”
Shortly after the report was issued, Sen. Charles Grassley (R-Iowa), introduced legislation (S. 3343) that would require physicians making referrals for MRIs, CTs, positron-emission tomography scans, and potentially other modalities, to disclose to patients in writing if they have ownership in the imaging facility.
The proposal was initially included in the bill that canceled Medicare physician fee cuts but was dropped in the final package.
The GAO analyzed Medicare claims data and also interviewed health plans and radiology benefit management companies to compile its report, which was requested by Sen. Jay Rockefeller (D-W.Va.).
Because of the rapid growth in imaging, the GAO said, “we recommend that [the Centers for Medicare and Medicaid Services] examine the feasibility of expanding its payment safeguard mechanisms by adding more front-end approaches to managing imaging services, such as using privileging and prior authorization.”
The proportion of Medicare Part B spending on imaging conducted in a physician office setting, which was 58% in 2000, rose to 64% in 2006, according to the GAO, which noted that physician-directed imaging has grown. (See Policy & Practice, p. 19.)
“The rise in testing and therefore in cost for outpatient imaging is a symptom of our broken health care system,” said Dr. Elaine Jones, a neurologist in private practice in Bristol, R.I, and a member of the legislative affairs committee of the American Association of Neurology.
“Instituting prior authorization is just a cost-shifting measure. It shifts cost to patients and risks to physicians. Most of these measures do not include reward systems, only regulations. Insurance companies, including Medicare, are looking for ways to save money,” she said.
The American College of Cardiology also criticized the GAO study, noting that the agency did not use data showing a decline in imaging growth in 2007. (See also p. 19.)
“We are disappointed that the GAO chose to ignore the work that physicians and specialty societies are doing to ensure the most appropriate use of these technologies,” the college's CEO, Dr. Jack Lewin, said in a statement. “Prior authorization is a Band-Aid to the utilization issue and not a viable solution. Medicare should look to accreditation, appropriate use criteria, and improved communication to lower utilization and improve quality.”
Dr. Jones said that, as always, “the response is 'if costs are increasing, we need to stop paying.' If a patient comes to me with pain, I don't just give them a pain pill. I try to find the cause of the pain and address that. In the same way, we need to look at why costs are rising, and not just refuse to pay.”
The Medical Imaging Technology Alliance (MITA) issued a similar critique, and noted that the GAO report did not take into account appropriateness and accreditation criteria that were part of the recently passed Medicare bill that eliminated a scheduled reduction in physician fees. The law will require imaging facilities to be accredited starting in 2012.
Appropriateness and accreditation will “ensure that an image is taken at the right time by the right person and in an appropriate manner,” MITA vice president Andrew Whitman said in an interview. MITA is the medical technology trade association of the National Electrical Manufacturers Association.
He also criticized the GAO's support of radiology benefit management companies (RBMs), which the private sector has used to implement prior authorization and other tools to rein in costs. RBMs do not readily share guidelines and appropriateness criteria and are not well regulated, he said.
In response to the GAO report, the Health and Human Services Department said it also had concerns about the “administrative burden” of using RBMs, and it pointed out that there were no independent data showing that RBMs could successfully manage imaging costs. It added that proprietary guidelines in use by RBMs might conflict with those being promoted by federal health authorities, meaning that the RBM recommendations could present a conflict for Medicare in the consideration of payment.