From the November 2011 issue of HealthCare Business News magazine


"It's not the kind of thing that's going to end up saving the taxpayers a whole pile of cash," he said.

Interestingly, Moran suspects the Congressional Budget Office, a nonpartisan group which "scores" proposed bills based on their financial impact, might agree with him about prior authorization's current potential.


Earlier, the CBO has indicated that prior authorization plans could realize some savings, but in recent conversations, summarized in the report, Moran said the CBO has said savings envisioned to emerge from prior authorization would likely be assumed to have been captured by the legislative push for "evidenced-based care strategies," such as through the adoption of electronic health records.

"They explicitly indicated that the score they would now assign to a prior authorization program financed by per-member-per-month fees would be, at best, budget neutral -- and might be scored as increasing federal mandatory spending, depending on how the arrangement was structured," the report said.

However, on the call, Moran did venture to suggest why prior authorization plans are popular among insurers. They might give them time to steer patients to preferred providers in their network, who offer cheaper services. But as the Medicare fee-for-service population is not limited in that way, this would not be a possible avenue for federal savings, he said.

Study's timing

The study comes out as the so-called congressional super committee, a bipartisan panel of 12 lawmakers, must come up with $1.2 trillion in savings to avert an across-the-board budget cut that will be triggered if they fail to reach a deal by Christmas. And the six senators and six congresspersons, equal parts Democrat and Republican, must submit their proposal by Thanksgiving.

The report can also be seen as a rebuttal of sorts to the Blue Cross Blue Shield Association's package of recommendations, released earlier this month, that called for prior authorization on CT, MRI and nuclear medicine studies as a way to help cut down on wasted health care dollars.

The groups behind the study obviously hope that Congress doesn't take any interest in a prior authorization plan, which was criticized by radiologists and patient advocates for removing health care decisions from doctors and putting them in the hands of bureaucrats.

"I think decisions about [ordering tests] should be made on a physician to physician basis, and not by someone remote following a money-saving algorithm," said Dr. Bibb Allen, a radiologist and member of ACR's board of chancellors, who was also on the press call.

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