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Utilization review takes aim at imaging expenses


Nearly everyone associated with the performance and payment of medical imaging agrees: Something must be done to curb the runaway growth and cost of diagnostic imaging. Without controls, they say, medical imaging could suffocate on its own success.

Nearly everyone associated with the performance and payment of medical imaging agrees: Something must be done to curb the runaway growth and cost of diagnostic imaging. Without controls, they say, medical imaging could suffocate on its own success.

Numbers tell the story. Imaging has become a major factor in the total cost of U.S. healthcare. According to an analysis sponsored by the Blue Cross and Blue Shield Association, diagnostic imaging technologies cost between $65 billion and $75 billion in 2000, more than twice the cost of cardiovascular technologies or in vitro diagnostics. By next year, imaging costs could rise as high as $96 billion, according to the association's consulting firm, Booz Allen Hamilton (Table 1).

Massachusetts-based Harvard Pilgrim Health Care and other private insurers have seen their high-tech imaging costs increase at least 26% annually for each of the past four years. Without intervention, the costs of CT, MR, PET, and nuclear cardiology are expected to continue growing at double-digit percentage rates until at least 2006 (Table 2).

Healthcare policymakers at the Medicare Payment Advisory Commission define the problem of rising imaging costs in terms previously reserved for prescription pharmaceuticals, according to Cherrill Farnsworth, executive director of the National Coalition for Quality Diagnostic Imaging Services, and CEO of HealthHelp, a utilization management firm in Dallas. Imaging ranks second only to pharmaceuticals as the largest and fastest growing source of costs for the Managed Care Government Employees Hospital Association, a health plan that covers 250,000 federal employees and their families.

"It seems like everybody is buying a new CT scanner or opening a new MRI facility," said Joel D. Ebben, MCGEHA vice president.

The utilization problem has become menacing enough for American College of Radiology officials to consider its political implications. They remember how high-tech diagnostic imaging became symbolic of high-cost medicine in the 1990s, and they worry that it may be accused of causing the current round of healthcare inflation.

"It is already happening," said Dr. James Borgstede, chair of the ACR board of chancellors. "All the insurance carriers are well aware of the situation. If we don't step up to the plate and address this issue, it will be addressed for us."


A cottage industry of companies that specialize in medical imaging utilization management is helping insurers get their radiology costs under control. The companies fall into two broad categories. One group applies hardball tactics, especially preauthorization, to eliminate inappropriate utilization. The other takes a softer approach through physician education and strategies that discourage self-referral.

National Imaging Associates and MedSolutions emphasize preauthorization paired with patient referral tactics that encourage physicians to send patients to affiliated imaging centers. NIA grew from a partnership formed in 1996 between Dr. Thomas G. Dehn and John Donahue. Dehn was formerly chair of the ACR's managed-care committee, and Donahue was CEO of Quest Diagnostics, a clinical laboratory testing firm.

NIA's enrollment base doubled to 13 million members in 2003. Anthem Blue Cross and Blue Shield, Highmark Blue Cross Blue Shield, and Harvard Pilgrim are among its newest customers. NIA conducts about 200,000 consultations per month from call centers in Phoenix and Rancho Cordoba, CA. About 2600 imaging providers participate in its preferred network.

MedSolutions has specialized in imaging utilization management since 1996. Its 300 employees, based primarily in Franklin, TX, address about 70,000 preauthorization requests per month. Its national accounts include Aetna, Cigna, and United Health Group.

MedSolutions' preauthorization program, like that of NIA, is geared toward stanching inappropriate outpatient MR, CT, PET, and nuclear cardiology use. These procedures account for about 15% of total imaging volume in the U.S. but generate about 55% of total imaging costs.

MedSolutions' preauthorization protocols encourage physicians to refer patients to imaging centers in its preferred network, where services are provided at a 10% to 15% discount. Like NIA, it is accredited by the National Committee for Quality Assurance and the Utilization Review Accreditation Commission.

American Imaging Management is among the utilization management companies that trust in physician education to eliminate waste and optimize service delivery, according to CEO David Harrington.

"We want to be absolutely fair to the provider community," he said.

That means promoting compliance with reporting requirements rather than denying service, Harrington said. In about 30% of AIM's calls, the physician needs more information to choose the correct action. Authorization requests can be initiated by phone, fax, or interaction with AIM's Web site. Half of the problematic calls require physician-to-physician consultation. In most cases, referring physicians are not required to take AIM's advice.

"We want to get to an approval as quickly and as painlessly as possible," Harrington said.

AIM serves 14 plans covering about 11 million lives. Its customers include Cigna, Blue Cross Blue Shield of Michigan, Blue Cross Blue Shield of Texas, Health Alliance Plan in Michigan, Providence Health Plans in Portland, OR, and AmeriHealth in New Jersey.

In addition to soft preauthorization, AIM provides site assessment and certification, safety education, and physician privileging to determine whether self-referring physicians are qualified to operate their equipment.


HealthHelp in Dallas also promotes a nonthreatening approach with strategies designed to minimize self-referral, said medical director Dr. David Levin. Among its varied services, HealthHelp provides managed-care plans with site inspections to winnow out unqualified physicians. Through its privileging program, it grants specialists the right to perform imaging as determined by their training. Orthopedic surgeons are limited to skeletal x-rays and dual x-ray absorptiometry.

HealthHelp's educational efforts include the Pocket Medical Imaging Consultant, a guide that recommends preferred imaging strategies for more than 300 clinical conditions. Data warehousing tracks physician ordering patterns, and a precertification program involves soft denials that enable it to track referral behavior without issuing absolute denials for requested services.

Although HealthHelp has not traditionally reacted as strongly to inappropriate utilization as some companies, it has compiled evidence supporting denial payments to self-referring physicians. The increase in Medicare imaging utilization by radiologists between 1993 and 2002 was 7%, compared with 49% for nonradiologists, Levin said. Cardiologists were the worst offenders. They posted a 141% growth rate during that period.

Although all these approaches have merit, insurers more often rely on preauthorization as the surest way to control costs. Many of MedSolutions' clients see a 15% to 20% reduction in inappropriate utilization in the first 18 months of their programs, said Dr. Gregg P. Allen, chief medical officer. The improvement translates to a cost savings of $1 to $2 per member per month.

Before contracting with NIA, Harvard Pilgrim Health Care documented the results of NIA's previous clients. The insurer found that preauthorization usually eliminated most imaging-related cost inflation in the first year, said Dr. William Corwin, medical director of utilization management and clinical policy. Imaging costs then rise in subsequent years by 8% to 10%, roughly half the rate for unmanaged imaging use.

New clients go through a two-step process at NIA, according to Dehn. Twelve months of medical imaging claims are processed by NIA to identify exceptions to the expected utilization. Physicians suspected of exceptionally high levels of inappropriate referrals are identified and counseled.

Referring physicians must phone NIA's call center for preauthorization after the program is implemented. The physician's order and patient indications are run through an automated system for a quick reading of their appropriateness. Two-thirds of the requests are approved at this level. The average call is answered within two or three rings and is completed in about four minutes, Dehn said.

One of three calls, however, is transferred to a nurse for further review and an explanation of the reason for denial. About 10% of the decisions against imaging are reversed at this point.

If not satisfied, the physician may ask for peer-to-peer consultation. NIA employs the equivalent of 25 full-time physicians in various specialties for these situations. Although referrers can gain an informed sense of why their request was rejected at this level, only one of 10 requests involving peer-to-peer review is authorized. The overall denial rates range from 12% to 20%. The typical rejection rates for CT and MR are slightly less than 20%.


Preauthorization helps a referring physician order the right test to spare the radiologist wasted effort, said Dr. Thomas Ebert, medical director of Health New England, a 90,000-member HMO in western Massachusetts.

"Radiologists aren't going to tell someone that their order was stupid," he said. "They are going to do the test that was ordered. Then, for the right reasons, the radiologist will suggest different tests to get the right answers."

Many opportunities to cut costs through preauthorization arise because referring physicians are poorly informed about when to order imaging, Allen said.

"If you asked 10 primary-care physicians how to work up a patient with chronic headaches, you will get 10 different answers," he said.

This underscores the importance of referring-physician education, Farnsworth said.

"Old habits are difficult to break. Some physicians still order myelography and MRI for lower back pain, when they'll get all the information they'll need from MRI alone," she said.

New habits are probably easier to establish when someone is watching. Utilization management providers credit a so-called sentinel effect for an approximately 5% reduction in inappropriate orders. According to Ebert, physicians are less likely to push the limits of the insurer's guidelines, and they may use preauthorization to deny prescriptions to patients who insist they need to be scanned.


All the plans modify their review criteria to reflect the client's coverage policies and the results of their technology assessments. MedSolutions' guidelines are also influenced by the ACR appropriateness criteria, Allen said. For additional help, it examines consensus statements from the American Academy of Neurology, American Academy of Orthopaedic Surgeons, and American College of Cardiology.

"All that factors into the evidence base for our criteria. We have panels of practicing clinicians who give us feedback to update the criteria annually," he said.

Expert panels also advise MedSolutions when to adopt new technology. The company has been in consultation with nuclear physician Dr. R. Edward Coleman at Duke University for the past two years regarding possible changes to its policy on the use of FDG-PET for diagnosis of Alzheimer's disease.

"As evidence accumulates and Medicare decides to cover it, we look at that information, confer with our expert panel, and make a recommendation to the payers about what they should do," Allen said.

But some areas of disagreement exist between radiologists and the utilization management companies concerning appropriate utilization. The management companies are sometimes unwilling to authorize separate orders for abdominal and pelvic CT because ultrafast multislice CT performs the pelvic sequence in seconds. Yet radiologists complain that their interpretation of those additional images is no less time-consuming than it was before multislice imaging.


Partners Healthcare, an integrated healthcare delivery system in Boston, raised objections to Harvard Pilgrim's implementation of the NIA program. Partners includes specialty physicians and teaching hospitals affiliated with Harvard Medical School.

The launch of the program in April followed a year of negotiations between the health plan, NIA, and physician committees organized by the Massachusetts Medical Society and Massachusetts Radiological Society. Negotiated concessions included an agreement to eliminate hard denials and acceptance of an alternative approach to NIA's call-in preauthorization requirements.

Physicians at Brigham and Women's and Massachusetts General Hospital are using an automated order entry system developed by Dr. Ramin Khorasani, director of patient management at Brigham and Women's. Instead of NIA decision support criteria, the order entry system applies rules based on modified ACR criteria to give the referring physician an appropriateness score for the procedure and its associated indication, said Dr. James Thrall, radiologist in chief at MGH. If the combination has a low score, the physician is given the choice of changing the request or calling an MGH radiologist for consultation, he said.

Utilization management programs sponsored by Harvard Pilgrim, Cigna, and Aetna in Massachusetts have created uncompensated administrative costs for the state's hospitals, according to Dr. John A. Patti, a radiologist with North Shore Medical Center in Salem and chair of the ACR Commission on Economics. Although the three programs account for only about 10% of the imaging performed by Patti's department, it was forced to assign a full-time certified billing agent to handle the scheduling and approval process.

The program creates several other unintended problems for radiologists, Thrall wrote in an e-mail response to questions. They suffer guilt by association because of the extra work clinicians must perform to order diagnostic imaging. To be paid, radiologists must rely on information supplied by the referring physicians, which is sometimes incorrect.

"In the worst case, some clinicians refuse to obtain approval and expect imaging to be performed anyway in the name of patient care," Thrall wrote.

Even with modifications, utilization management remains unpopular. A survey performed by medical directors of six healthcare groups affected by the Harvard Pilgrim program found that physicians generally disliked the program, Corwin said.

"Half said it was stupid, a step backward, and the other half said there was no discernible impact on their practices," he said.

However, physician popularity was not an objective, Corwin said.

"We didn't expect the program to be liked. Our imaging expenses are high, and they are a major factor in our rising premium costs," he said.


While it is too soon to measure the financial impact of the Harvard Pilgrim program, a similar initiative at Health New England (HNE) has reduced the growth of medical imaging by at least $2 million, or $1 per member per month, since preauthorization was first required in September 2002, Ebert said. MR and CT utilization has risen 5% to 10% per year, about half the rates before implementation. Nearly 90% of the savings are returned to the health service fund.

Physician response has generally been favorable. A provider satisfaction survey found that 87% of providers had a neutral or favorable impression of the NIA-administered program.

The program does not seem overly burdensome, Ebert said. The average internist who treats 250 HNE members orders an imaging exam through NIA once every eight business days.

HNE program costs continue to rise, however, because of the increasing popularity of PET. More than 100 PET procedures were performed on its members through the first nine of months of 2004, compared with just 10 studies in all of 2001, the year before implementation.

Elsewhere, radiologists have mixed opinions about whether utilization management is right for their communities. In Fort Worth, Dr. Paul Shyn, a partner with Radiology Associates of Tarrant County, sees potential value in the program if its preauthorization guidelines are valid and comprehensible. But he doubts that the consultants running utilization management firms are any more qualified than the insurers to understand imaging technology and its appropriate use.

"Their whole modus operandi is to drastically cut costs and take a percentage of that for their own profit," Shyn said.

The behavior of companies operating in Fort Worth has not been encouraging. Instead of basing their selection of preferred imaging providers on quality, the firms operating there seem to choose services that accept the biggest discounts, he said. Although Shyn's group is the most experienced PET provider in Dallas-Fort Worth, no utilization management company has asked it to participate in its network.


Officials at Blue Cross Blue Shield of Texas have high expectations for an AIM plan that was implemented in October. The Radiology Quality Initiative program applies to three million Texans covered by the insurer's PPO. It requires physicians to call in imaging requests, but no denials are issued. Requests for possibly inappropriate imaging are routed to the insurer's clinical review department and may result in a call from an AIM radiologist and an explanation of why the request does not meet AIM's criteria.

The outcome is intended to be consultative rather than punitive, said Dr. Allan Chernov, medical director of healthcare quality and policy at Blue Cross Blue Shield of Texas.

"We've found that the physician will often learn about criteria for high-tech imaging or alternative imaging strategies during these discussions. They will frequently change their minds about going through with suspect orders," he said.

At HealthHelp, Farnsworth has retooled one of her programs for insurers seeking aggressive solutions. In October, the firm introduced what Farnsworth calls a clinically driven precertification program. It combines elements of the firm's existing educational programs and mandatory preauthorization. When referrals are denied, peer-reviewed literature supporting the decision will automatically be faxed or e-mailed to the referring physician.

The program was inspired by a 13% jump in healthcare premiums and a 15% to 27% rise in radiology costs in 2003.

"The kinder, gentler educational approach is still something that plans like ours would like to see work, but it's time to get tough, because these increases are just not sustainable," Farnsworth said.



-Violations of accepted criteria (e.g., MRI for lumbar back pain in the first six weeks after onset of symptoms)

-Imprecise patient selection

-Low pretest probability of a positive finding

-Redundant testing

-"Shotgun" imaging (ordering every plausible test simultaneously)

Source: G. Allen

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