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A Case for Prior Authorization of Imaging Services


The head of a speciality benefit management company gives his take on why prior authorization is the only system that ensures that vast data is seriously considered in patient diagnosis and treatment.

Which is really better for patient care: Clinical decision support or prior authorization?

Both approaches to managing utilization are meant to help physicians make critical decisions about the best way to diagnose and treat patients. Both can reduce healthcare costs by offering medical recommendations rooted in real-world evidence-based outcomes data. In both cases, that data comes from vast archives of patient outcomes, clinical trials and other scientific data, eliminating the guesswork about how best to address the clinical needs of a patient.

However, only one system ensures that vast data is seriously considered in patient treatment: Prior authorization.

In theory, decision support sounds more appealing for practitioners. The system offers guidance about medical diagnosis or treatment to inform and guide a physician’s action when determing how best to treat his/her patient. In practice, however, it's estimated that physicians utilizing decision support do not complete the full review up to 66 percent of the time, which results in reduced compliance with evidence based medicine. An even higher rate of services are rendered, often contrary to medical guidelines, when the ordering physician is also rendering the service. So, if the goal is to provide patients with the best, most appropriate treatment or test, decision support fails to deliver because it is considered “optional” by many practitioners.

Prior authorization, however, does deliver by matching the unique needs of specific patients with treatments or tests proven to be effective in patients with similar histories. Decisions are driven by evidence collected from thousands or millions of cases involving patients with a variety of conditions and histories. As a result, physicians don’t make educated guesses about a treatment, they rely on the data.

The difference between prior authorization and decision support systems is most obvious in the 18 percent of cases where prior authorization requires different tests or treatments. And the difference in outcome quality is significant - both in terms of efficacy, cost, and patient safety.

Benefits of Prior Authorization

Since prior authorization ensures that the patient receives the appropriate test based on their unique medical history and situation, physicians subject to prior authorization are only reimbursed for services that are deemed medically necessary based on very specific evidence-based pathway criteria.

This provides a much more rigid system that does not allow for practitioners to work around and/or order tests that are not medically necessary for their patient. Prior authorization for radiology alone, on average, can reduce health care costs by more than $60 per insured each year ($60 million/year for a million-member health plan) while reducing patient exposure to unnecessary radiation from inappropriate diagnostic testing.

Dr. Joel Canter, head of CareCore National’s radiology division, says that it’s common for physicians to demand significantly more inappropriate or unnecessary imaging tests under decision support than with prior authorization. This is why a recent assessment by CareCore National shows that prior authorization was able to save client networks twice the amount that can be saved utilizing a clinical decision support system. This is significant for radiology practices because, as more practice groups take on risk-sharing relationships with health plans, the practice is incentivized to only render medically necessary procedures.

Decision Support Is Only Effective if Used Start-to-Finish

Criticism of prior authorization systems tends to revolve around the fact that physicians must obtain authorization via phone or online, which critics say can be more time consuming than decision support systems.

In fact, the tools used in both systems are virtually identical - and equally time-consuming from a pure administration standpoint. Decision support tools have the potential to require a higher level of actual physician participation. Decision support processes are only faster if physicians “opt out” of the process by ignoring the recommendations. It may save physicians or their staffs some time to ignore the therapeutic recommendations, but it does not serve patients.

Opting out of the decision support process means that patients do not receive the full benefit of the evidence, run a greater risk of developing complications and can be exposed to risk down the road from, for example, unnecessary radiation exposure - which can pose problems later in life.

Ignoring the data can also delay treatment. Prescribing inappropriate tests, for example, often requires patients to undergo a second round of diagnostic testing to determine proper therapy. This slows the treatment process and increases costs.

Cost is significant. Consider Medicare payments for imaging services: From 2000 to 2009, payments nearly doubled, from $6.5 billion to $11.7 billion, according to federal data. This spiral led the Medicare Payment Advisory Commission to recommend in April 2011 that prior authorization be used for providers who overuse imaging services or use them inappropriately.

The good news is that, as more payers embrace prior authorization, technology is being introduced to make the process easier and simpler for physicians. As technology makes prior authorization easier and physicians recognize the benefits of evidence-based medicine for their patients, they will understand that prior authorization only enables them to provide better care.

Douglas K. Tardio is president and chief operating officer of specialty benefit management company, CareCore National, where he is responsible for the ongoing operations of the organization, including call management, provider management, and information systems.

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