The General Accounting Office (GAO) has released a new report on trends in Medicare imaging services, the growing use of imaging services in physicians' offices, and management practices from private insurance payers, which the GAO feels might benefit Medicare.

The report analyzed Medicare claims data from 2000 through 2006. According to the report, in that time period Medicare spending for imaging services paid for under the physician fee schedule more than doubled, reaching a cost of approximately $14 billion. The GAO report lists several factors contributing to the rise in imaging costs for Medicare including more beneficiaries obtaining imaging services and the average use per beneficiary increasing. In particular, spending on advanced imaging--CT scans, MRIs, and nuclear medicine--rose far faster than standard imaging of ultrasound and X-ray. On average, Medicare pays physicians more for both the technical component (performing the imaging) and the professional component (interpreting the imaging) on advanced imaging than the standard imaging techniques.

As to why imaging use and advanced imaging services in particular have increased, the physician specialty organizations the GAO interviewed attributed the growth to the following:
-technological innovation--equipment becoming smaller and more portable;
-patient demand influenced by direct-to-consumer advertising;
-defensive medicine to protect physicians from malpractice suits;
-increase in clinical applications;
-older invasive diagnostic procedures replaced with new, less invasive imaging procedures.

In addition, representatives from private health plans cited two other factors for the growth in imaging spending--the ability of physicians to refer patients to their own practices for imaging and that primary care physicians often lacked knowledge about the most appropriate test to order for a patient, leading to a significant portion of imaging tests that may be unnecessary by clinical guidelines.

The GAO also critiqued the fact that a larger share of Medicare Part B spending for imaging services has shifted from the hospital settings--where the institution receives payment for the technical component of the service--to physician offices, where physicians receive payment for both the technical and professional components of the service. The GAO says that in-office imaging spending had significant variations depending upon the region, which also indicates that significant portions of imaging utilization are not necessary. The variations ranged from $62 in Vermont to $472 in Florida.

In the study of private insurance practices, the GAO focused on prior authorization--plan approval before ordering imaging services. Most of the private payer plans in the study contracted with companies called radiology benefits managers (RBM) to perform imaging management activities on their behalf. According to the private payers and RBMs, prior authorization was the practice most important to managing physicians' use of imaging services. By comparison, CMS currently uses retrospective payment safeguard activities focused on recovering overpayment or modifying coverage. Other private insurance practices for limiting costs included privileging--where a plan limits its approval for ordering particular imaging services to physicians in certain specialties; and profiling, which entails a statistical analysis of an individual physician's use of services relative to a benchmark based on the practice patterns of the plan's other physicians in the same specialty.

In response to the GAO report, HHS raised several concerns about the administrative burden and advisability of prior authorization for the Medicare program, including the lack of independent data on the success of RBMs in managing imaging services.

Subsequent to the report, the Medical Imaging and Technology Alliance released a statement in which Vice President Andrew Whitman says in part, "It is disappointing that the GAO report failed to use the most recent data, reference medical guidelines or look at trends in which providers and payers are adopting appropriateness and accreditation criteria to address proper utilization of imaging services. As a result, the GAO report obscures how medical imaging utilization decisions are made and the benefit that imaging has to healthcare savings and patient outcomes."

More information available at http://www.gao.gov/docsearch/abstract.php?rptno=GAO-08-452

American College of Radiology Response:
The American College of Radiology does not support GAO's recommendations for prior authorization by radiology benefits managers as this process would take medical decisions out of the hands of doctors, may delay or deny lifesaving imaging care to those who need it, and would likely result in longer waiting times for patients to receive care. "Why spend more taxpayer dollars to hire outside entities to examine claims on an individual basis, possibly delaying legitimate exams?" said James H. Thrall, M.D., FACR, chair of the ACR Board of Chancellors. "Concerns regarding image quality, safety and costs should be dealt with directly, not through a third party that will only add more administrative burden on providers."

Instead of prior authorizations by radiology benefit management companies, the College has been advocating for mandatory accreditation for all providers of advanced imaging services, as well as a demonstration project that will test the use of physician-developed appropriateness criteria. Both of these provisions are included in H.R 6331, the Medicare Improvements for Patients and Providers Act of 2008, recently passed by both Houses of Congress. The College believes these are crucial first steps in dealing with the quality, safety and cost of imaging services.