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JACR: Radiology benefit managers shift costs to referring physicians

by Brendon Nafziger, DOTmed News Associate Editor | June 02, 2011
Proponents of radiology benefit managers argue they can help save the health care system money by preventing overuse of advanced imaging studies. But a new study simulating the potential savings of radiology benefit managers suggests they shift costs onto referring physicians.

"It is...interesting that cost shifting has not been included in the national discussion of RBMs," write the authors, led by David W. Lee, an economist with GE Healthcare.

The study, which appears in the June issue of the Journal of the American College of Radiology, also argues that RBMs' cost savings to the whole health care system depend on a variety of different factors for which "supporting data are incomplete."
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In general, RBMs are hired by health insurers to require doctors to get prior approval before ordering advanced imaging studies. The idea is that by requiring prior approval, the health care plan can reduce overutilization of imaging and decrease costs by denying unneeded studies.

Such schemes can also have a "sentinel" effect, where doctors are less likely to order studies just because they're being monitored, the researchers said. And they prevent so-called downstream costs, such as performing follow-up tests on incidental findings turned up by a CT scan.

Prior authorization plans have won support in some corners. For instance, in April, the Medicare Payment Advisory Commission recommended a prior authorization system for doctors who ordered a high number of advanced imaging studies.

But the RBMs also have costs. Not only are there the direct costs paid by a health care plan for running the RBM, but there are also indirect costs that result from, for example, patients delaying necessary treatment.

What's more, there's the cost to the doctors and staff members who have to do extra work to comply with the RBM requirements. In their study, Lee and colleagues said their model of RBMs suggests that these costs can be significant.

Based on data they gathered about RBMs, the model created by the researchers simulates an RBM running with a health plan with 100,000 members, with a rate of 135 advanced imaging studies (CT, MRI and PET scans) per 1,000 members.

The researchers designed their model to assume that the RBMs have no impact on net health care costs. In their model, they say the RBMs actually achieve $640,263 in savings, largely from a 12.5 percent reduction in imaging utilization.

But the researchers also say RBMS shift about $182,066 of costs (or about 28 percent of the savings) onto doctors and their staff. In the study, the savings were also offset by $458,197 in RBM fees.

Of the simulations the group ran, RBMs were cost-saving in 45 percent of them. In 95 percent of simulations, there occurred a spread between a cost decrease of $397,880 and a cost increase of $341,991, the researchers said. "The probability of an initial approval by the RBM, the RBM's fee, and the imaging utilization rate and associated charges had the largest influence on the results," they wrote.

The results were applauded by imaging manufacturers. In a statement, Medical Imaging & Technology Alliance (MITA), an industry lobby, congratulated the study authors on "uncovering the hidden costs of RBMs."

"In light of the ongoing threats to patient access, policymakers should not add barriers to care for patients who are in need of medical imaging services," the statement read.

As of 2007, the six largest independent RBMs covered an estimated 88 million privately insured patients, the researchers said.

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