Payers seek solutions to increasing radiology costs

As the bill for advanced imaging modality procedures rises, payers are asking for pre-authorization of scans in radiology management programs to address high costs and ensure that those services are necessary.

Controlling costs is an important issue for payers as bills mount and questions about effectiveness surface.

Studies suggest that about $10 billion was spent on high-tech imaging last year. Imaging Economics reported that as much as 40 percent of high-tech radiology services could be considered clinically inappropriate or not contribute to patient care.

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Blue Cross Blue Shield of North Carolina spent $400 million for non-emergency-related imaging tests in 2005. In 2007, it will require pre-authorization for diagnostic imaging scans.

While cost is an issue, "We are focusing on performing the right test at the right time with the right patient for the right diagnosis," said Debra MacClennan, vice president of healthcare for the blues plan. "The clinically appropriate utilization of services will contribute to the care of our members and make healthcare more affordable."

The growing trend in healthcare management to monitor imaging expenses is similar to the increase in pharmacy benefit management 20 years ago to address exploding medication costs, according to MedSolutions, a radiology management vendor.

While payers have access to tools such as benefit redesign and predictive modeling capabilities, the ability to pre-authorizing scans is a favorite for managing costs, said Curt Thorne, MedSolutions' CEO.

Payers who adopt a strategy to manage imaging expenses are experiencing some success, said Jane Dubose, associate director of health plan analysis for HealthLeaders-InterStudy. While the current rate of growth in radiology costs is 12 percent to 14 percent a year, "the reduction rate within one to two years after an intervention plan is implemented is between 2 (percent) to 4 percent," she said.

Payers may control costs through pre-authorization, but they run the risk of a provider backlash, Dubose warns. She said payers could weaken their network or face criticism from physicians who view pre-authorizations as a return to the heavy-handed era of managed care.

Blue Cross and Blue Shield of Massachusetts appears to have anticipated this concern when it initiated its radiology management program, which was designed "to educate providers on the latest radiology information to ensure that our members receive the scan that meets their medical need," said spokesperson Christopher Murphy.

The Massachusetts blues plan developed the program with the help of the Massachusetts Medical Society and individual providers.

 "Our radiology management program contains many elements suggested by the provider community. We believe in working collaboratively when developing these types of programs," Murphy said.