White House calls for imaging preauthorization in budget plan

February 27, 2009
H.A. Abella

The Obama administration has sent to Congress a budget that relies on radiology benefit managers to cut imaging utilization costs, mirroring a recommendation issued last summer by the Government Accountability Office. Just like that recommendation did, the budget proposal drew criticism from imaging proponents.

The Obama administration has sent to Congress a budget that relies on radiology benefit managers to cut imaging utilization costs, mirroring a recommendation issued last summer by the Government Accountability Office. Just like that recommendation did, the budget proposal drew criticism from imaging proponents.

The GAO report released in June 2008 confirmed findings of a 2005 Medicare Payment Advisory Commission study that identified outpatient MRI, CT, and other high-tech imaging as the fastest growing component of physician services covered by Medicare. Prompted by the Senate, the GAO looked into management models used in the private sector to slow down imaging spending. It found that payers had successfully used prior authorization and recommended the strategy.

A line item in the proposed budget for the fiscal year 2010 sent to Congress Feb. 27 by the White House asks to "ensure that Medicare makes appropriate payments for imaging services through the use of radiology benefit managers." The budget assumes five-year savings of $70 million and 10-year savings of $260 million through the use of prior authorization.

The American College of Radiology would rather see future legislation call for the use of appropriateness criteria in an order entry system to examine cost and appropriateness issues concerning medical imaging, not radiology benefits managers, said ACR director of public affairs Shawn Farley.

The use of appropriateness criteria would address the issues without taking decisions out of the hands of doctors and patients, Farley said. It would also remain consistent with previous legislative efforts that led to the passing of the Medicare Improvements for Patients and Providers Act of 2008. A provision of that bill calls for a pilot program on the use of appropriateness criteria to begin in 2010.

The Medical Imaging & Technology Alliance praised the Obama administration's health policy goals to provide equal access to affordable quality care. Relying on an RBM model to hit budgetary targets, however, will undermine access to medical imaging services, MITA said in a statement Friday.

The same GAO report had drawn flak from the Department of Health and Human Services for its lack of independent data to certify RBMs' success, MITA officials said. In addition, HHS expressed concern about the administrative burden entailed in implementing prior authorization by CMS.

"We must ensure that patients have access to the right scan at the right time. The RBM model is the wrong approach and the administration and Congress should instead build on appropriateness criteria," said MITA's managing director Ilyse Schuman.

The budget proposal could prove a boon for radiology benefit management companies, according to Thomas W. Greeson, a partner with the law firm of ReedSmith in Falls Church, VA, and a contributor to Diagnostic Imaging.

Questions remain, however, on what facilities (hospitals versus outpatient clinics) and who (any ordering physician versus those with a financial interest) will require prior authorization for Medicare-paid imaging studies, Greeson said.

"One question is whether it's appropriate to apply this across the board, or should it be applied just to those who self-refer," he said.