Health Plans Target Advanced Imaging Services

Health Plans Step Up Oversight of Advanced Imaging Services

Confronting double-digit annual increases in the use of advanced imaging services, health plans were intensifying their efforts to manage imaging utilization, maintain quality, and protect patient safety, according to findings from the Center for Studying Health System Change's 2007 site visits to 12 nationally representative metropolitan communities. Plan strategies ranged from educating physicians about evidence-based imaging guidelines to requiring prior authorization for specific studies to credentialing both physicians and imaging equipment. Wary of repeating the physician backlash that characterized managed care in the 1990s, plans tried to implement requirements they considered less intrusive and burdensome. Some physicians, however, viewed these new requirements as administratively onerous and obstacles to timely patient care.

The Surge in Advanced Imaging

The services drawing the most attention were high-cost advanced imaging modalities: magnetic resonance imaging (MRI), computed tomography (CT) scans, positron emission tomography (PET) scans, and nuclear cardiology imaging. Other high-cost services experiencing rapid utilization growth, such as bariatric surgery and specialty pharmaceuticals, were also receiving scrutiny, but imaging was the primary focus. Health plans were targeting selected, high-cost services for more aggressive management rather than tightening controls across all services, hoping this focused approach would minimize physician and patient pushback.

The numbers behind the concern were striking. The annual growth rate in CT scans per 100 population between 2000 and 2005 was 13 percent, with the national rate climbing from 12 scans per 100 people to 22 scans per 100 people over that five-year span. For Medicare specifically, average annual growth rates for CT and MRI scans exceeded 15 percent from 2000 to 2004. Improvements in scanning technology that expanded diagnostic usefulness, combined with a rapid proliferation of scanning machines, fueled the growth.

Safety and Quality Concerns

Beyond the cost pressures, there were growing worries about patient safety and the quality of imaging services. Repeat imaging sometimes resulted from poor-quality images produced by substandard equipment or from inaccurate interpretation by inadequately trained physicians. But each additional CT scan exposed patients to significant radiation — a conventional abdominal X-ray delivered at least 50 times less radiation than an abdominal CT scan. Researchers had tracked managed care patients who each received more than 100 CT scans. Studies theorized a possible connection between multiple CT scans and cancer risk, noting that two or three chest CT scans exposed patients to radiation doses comparable to those received by Japanese atomic bomb survivors, a group with a documented elevated risk of cancer mortality.

The American College of Radiology (ACR) had developed appropriateness criteria for more than 200 clinical conditions, including recommendations to use non-radiation imaging methods like MRI and ultrasound when they were adequate for a given condition. In response to mounting radiation concerns, the ACR proposed additional measures through a Blue Ribbon Panel on Radiation Dose white paper.

Physician ownership of imaging equipment added another dimension to the overuse concern. Some health plans believed that physicians viewed imaging as a profitable revenue source, given that used equipment could be purchased cheaply or obtained through lease arrangements without large upfront costs. Analysis of physician self-referral patterns found that nearly a third of MRI billing providers and about a fifth of CT or PET billing providers either owned equipment or participated in time-share or per-click arrangements designed to avoid restrictions under the federal Stark II self-referral law.

Under a time-share arrangement, a physician rented imaging center space — usually in the same building as the practice — for scheduled blocks of time and billed insurers for scans performed there. Under a per-click arrangement, the referring physician sent patients to a designated imaging provider, paid that provider a set fee per study, and then billed the insurer for each scan, profiting from the difference. Both arrangements were structured to stay within the letter of Stark II while still generating referral-based revenue.

How Plans Were Reducing Imaging Utilization

Although Medicare had capped reimbursement rates for imaging performed in physician offices and freestanding diagnostic centers in 2007, some commercial health plans had not followed suit, fearing that rate cuts would drive high-quality providers out of their networks. Instead, plans pursued a range of administrative strategies.

Some plans took a collaborative approach, using claims data to identify questionable utilization patterns by individual physicians and then initiating discussions about appropriate imaging use. They provided network physicians with evidence-based guidelines from professional societies like the ACR and the American College of Cardiology. In Miami, a national plan used an imaging vendor to give physicians access to radiologist consultations before ordering tests. A Phoenix plan reported success in reducing high-cost nuclear cardiac testing by sharing utilization data with prescribing cardiologists and asking them to use a checklist before ordering diagnostic tests. Through this process, cardiologists were asked to explain why a simpler, less expensive treadmill stress test would not suffice. The targeted cardiologists did shift to treadmill stress tests in many cases, avoiding the more costly nuclear studies.

Most plans with formal utilization management programs used either prior notification or prior authorization. Prior notification simply required physicians to inform the plan before a patient underwent an imaging study, on the theory that this step alone would prompt physicians to select the most clinically appropriate test. Prior authorization went further, requiring physicians to obtain approval before conducting imaging studies; without such approval, plans typically denied payment to the performing provider.

A Cleveland health plan that had been seeing 20 percent annual growth in advanced imaging utilization reported a substantial drop in that growth rate after implementing prior authorization, with a denial rate of only 1.5 percent. As a plan respondent put it: they were not saying no very often, but because physicians now had to articulate what difference a test would make, they were not requesting as many to begin with.

A smaller number of plans had adopted credentialing — also called privileging or certification — for both imaging equipment and the physicians who interpreted imaging studies. Equipment credentialing involved having qualified professionals regularly inspect machines to ensure they functioned properly and met standards set by medical societies and accreditation organizations. Plan respondents using this approach were concerned that some physicians had installed outdated or substandard equipment in their offices primarily as revenue generators. As one Indianapolis plan respondent described it, some doctors had found their equipment on eBay — machines that had no business being in service. Physician credentialing required doctors to meet specific training and education standards before the plan would reimburse them for imaging interpretation, addressing concerns that some physicians with in-office equipment lacked adequate radiology training.

Efforts to Minimize Physician Burden

Mindful of the managed care backlash, plans tried to make utilization controls as targeted and least burdensome as possible. Some plans applied requirements selectively — for example, a Syracuse plan required prenotification only from primary care physicians ordering PET scans, exempting specialists. Other plans adopted "gold carding" practices, exempting physicians with strong track records from utilization management requirements. A Boston plan varied its preauthorization requirements by physician based on their prior performance and the specific imaging study being ordered. A Miami plan waived precertification entirely for physicians the plan had designated as meeting efficiency and quality standards.

Physician reactions were mixed. Some appreciated the electronic submission options, which reduced administrative burden and resulted in fewer denials, particularly after physicians became familiar with the requirements. Others complained that utilization management programs interfered with patient care and imposed significant administrative costs. A Little Rock physician observed that primary care doctors were increasingly making specialist referrals simply to avoid the time required to obtain imaging preauthorization — a pattern that generated an additional office visit and potentially increased total costs. Several physicians pointed out that imaging utilization management requirements often prohibited same-day testing, creating barriers for patients who had to travel long distances for specialist services and raising quality concerns when imaging could not be performed promptly.

Implications for Both Private Plans and Medicare

Despite physician objections, health plans generally held firm on imaging utilization controls, believing they had employer support and that the cost savings and patient safety benefits outweighed the downsides. As plans expanded their imaging management programs, the researchers noted a need for independent evaluations addressing not only the magnitude of cost savings but also the costs imposed on providers and patients, plus any implications for care quality and patient safety.

The private sector's experience also had direct relevance to Medicare, which faced the same utilization challenges. While commercial plans leaned more heavily on administrative controls than on price adjustments, Medicare had traditionally relied on payment rate reductions rather than administrative interventions. The Medicare Payment Advisory Commission (MedPAC) urged the Centers for Medicare and Medicaid Services to draw on private plans' approaches, specifically pointing to credentialing as a utilization control tool. MedPAC recommended that CMS establish standards for physicians billing Medicare for performing and interpreting diagnostic imaging studies, citing the dual goals of controlling spending growth and improving care quality.

About the Data

HSC conducted site visits to 12 nationally representative metropolitan communities as part of the Community Tracking Study: Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey; Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y. Approximately 500 interviews were conducted between February and June 2007 with representatives of health plans, hospitals, physician organizations, major employers, benefit consultants, insurance brokers, community health centers, consumer advocates, and state and local policy makers. In each community, representatives from at least two of the largest health plans were interviewed, including medical directors, marketing executives, and network executives.

Sources and Further Reading

McKinsey & Co. "Accounting for the Cost of Health Care in the United States" (January 2007).

Medicare Payment Advisory Commission. Medicare Payment Policy, Report to Congress (March 2007).

Brenner, David J., and Eric J. Hall. "Computed Tomography — An Increasing Source of Radiation Exposure." New England Journal of Medicine, Vol. 357, No. 22 (November 29, 2007).

Amis, Jr., E. Stephen, et al. "American College of Radiology White Paper on Radiation Dose in Medicine." Journal of the American College of Radiology, Vol. 4, No. 5 (May 2007).

Mitchell, Jean M. "The Prevalence of Physician Self-Referral Arrangements After Stark II: Evidence From Advanced Diagnostic Imaging." Health Affairs, Vol. 26, No. 3 (April 17, 2007).