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The Impact of "Preauthorization" for Advanced Medical Imaging on Health Care and Primary Care Medicine

Blue Cross/Blue Shield of Rhode Island as of January 1, 2008 will institute "pre-authorization" for certain diagnostic imaging (Computerized Axial Tomography (CAT scan), Magnetic Resonance Imaging (MRI), Nuclear cardiac imaging, Positron Emission Tomography (PET) and Magnetic Resonance Angiography(MRA).

Physicians will need to call, fax or email a "Radiology Management Program" (MedSolutions) to seek authorization before scheduling a patient for any of the above examinations. The "Radiology Management Program" will evaluate the request based on a set of national clinical guidelines for medical necessity. If approved, the patient may proceed with the requested test. Emergency and hospital services are excluded from this review.

An analysis of this concept should start with some notable facts about advanced diagnostic imaging nationally and locally:

  • Over 80 million of the above tests are performed annually in the United States.
  • Over 100 billion dollars is spent on these exams annually in the United States; Blue Cross spends 76 million dollars per year in Rhode Island.
  • Centers for Medicare/Medicaid Services estimates a 20% per year increase in just CAT and MRI in the United States.
  • The growth in the above imaging is outpacing the increase in medication costs per year.
  • Approximately 15% or 15 billion dollars per year is reported to be "unnecessary testing".
  • Diagnostic imaging sales were estimated at 3.9 billion dollars in 2005, with 25,000 new ultrasound machines, 8000 more CAT scan and MRI machines nationally.

Some primary drivers for this trend in medicine:

  • The advancement in technology allows for earlier, safer and more precise detection of disease.
  • An increasing population, with a significant increase in the number of people over 65 years old now and over the next thirty years.
  • A significant increase in the number of indications for advanced diagnostic imaging.
  • The clinical consideration of "missing a rare finding", leading to concerns about liability in patient care. "Defensive medicine" is estimated to cost 100 billion dollars of the 1.7 trillion dollars in national health care costs.
  • Increased demand by consumers to diagnose disease "pre-symptomatically", or requests to image early in the course of disease, despite a lack of clinical indications. "Full body scans", calcium scores on coronary arteries, early MRI exams all lead to further testing for potential "false positive" findings.

Some commonly used cost containment measures:

  • Requirements to obtain imaging within a "network" of providers that have contracted with an insurer.
  • "Certificate of Need" laws in states to match the "demand" and "supply" of advanced imaging technology.
  • "Preauthorization" as a mechanism to ensure "medical necessity" of a particular examination.
  • Physician profiling as a result of the above. Certain physicians may be excluded from participation if they have "high imaging costs".

MedSolutions (a radiology management program) claims a 15-20% reduction in "inappropriate utilization" in the first 18 months of a program. These programs report two thirds of requests are authorized through "an automated system". About one third of requests are transferred to a nurse for further review and an explanation of the denial. About 10% are reversed at this point. A physician may ask for a "peer to peer" consultation with about one in ten requests receiving approval. Overall the denial rate for CT and MRI is 12-20 percent per program. The claimed automated time is four minutes, with more time for nurse review and "peer to peer" review. Insurers that have instituted these plans claim a 5-10% reduction in imaging costs per year.

Presented with all this data it is difficult to argue against the implementation of these types of cost saving measures. So why is this a controversial issue in the primary care community? I would suggest the following reasons:

  • Primary care physicians order approximately 55% of the above imaging examinations.
  • They may order these exams for a myriad of reasons beyond the strict clinical guidelines.
  • The primary care provider already has significant overhead costs.
  • Preauthorization will add another undue burden to these costs (fixed costs, staff salary and physician time).
  • Delay and inconvenience to patients in scheduling these examinations.

If the goal of the health care community is improved quality with efficiency, I would suggest the following added measures:

  • Carefully and scientifically measure the impact of these programs over an initial one year period and over the longer term. Evaluate for cost savings, patient satisfaction and work of the physician office.
  • Analyze the data by provider, with counseling and education to "outliers" and perhaps exclusion from the preauthorization program for those with "appropriate" use of imaging examinations.
  • The insurer/medical management program should assume liability for those cases in which a denial was issued, but resulted in a delayed or missed diagnosis.
  • Compensation for the work of the primary care office to implement the program.
  • Evaluate the reimbursement for advanced imaging studies and address the issue of supply and demand.

Primary care medicine is a specialty "at risk" nationally and particularly in Rhode Island, with its significantly lower reimbursement rate compared to neighboring states. Some studies indicate that only 20% of the primary care work force is being replaced as physicians retire. This, in a time of increasing demand for primary care due to the aging "baby boomer" population.

Preauthorization creates another layer of administration and expense for a specialty already struggling for financial viability. The combination of poor reimbursement, rising practice costs, rising costs for medical education (average medical student debt is 150,000 dollars) makes primary care medicine unsustainable.

Primary care medicine should be the foundation of American health care. Each American should identify a primary care physician as a steward of their health. This should be a thriving specialty with the rewards of patient care and intellectual challenges. Nations with strong primary care have lower per capita costs for health care. The specialty can be part of the solution to high quality, cost efficient medicine, but not in the current reimbursement structure.

Preauthorization appears to have some merit, needs further study, a robust primary care workforce and is one piece of health care quality and efficiency puzzle. This issue showcases a need for realignment of health care priorities and a significant change in the formula for reimbursement of American medicine.

N.S. Damle, MD, FACP
Governor, ACP Rhode Island Chapter
(401) 789-0283

Page updated: 11/02/07