GAO recommends preauthorization to slow explosive Medicare imaging growth

July 21, 2008 GAO recommends preauthorization to slow explosive Medicare imaging growth H. A. Abella -------------------------------------------------------------------------------- To the chagrin of imaging advocates, a Government Accountability Office study has found that preauthorization may be best way for Medicare to slow the rapid growth of outpatient MR, CT, and other high-tech imaging services. The June 2008 report confirmed findings of a 2005 Medicare Payment Advisory Commission study that singled out high-tech medical imaging as the fastest growing component of physician services covered by Medicare Part B. The MedPAC report is widely cited for influencing congressional reforms in the Deficit Reduction Act of 2005 that substantially cut Medicare outpatient rates for high-tech medical imaging. Sen. John D. Rockefeller IV (D-WV), chair of the Senate Finance Subcommittee on Health, and Gordon H. Smith (R-OR), ranking member of the Senate Special Committee on Aging, asked the GAO to reexamine the MedPAC investigation and management practices that private payers use to regulate imaging spending. The GAO findings included the following: Medicare spending for in-office imaging services increased from $6.9 billion in 2000 to more than $14 billion in 2006. The proportion of outpatient Medicare imaging performed in physician offices rose from 58% in 2000 to 64% in 2006. Spending on advanced imaging, such as CT, MRI, and nuclear medicine, rose 17% per year, substantially faster than spending on less expensive ultrasound and x-ray procedures. Cardiologists relied on medical imaging for 36% of their total Medical revenue in 2006, up from 23% in 2000. In-office imaging spending in 2006 varied nearly eightfold from state-to-state, from $62 in Vermont to $472 in Florida. The huge difference led GAO analysts to express concern about whether Medicare payment policies have emboldened physicians to overuse imaging. The GAO found fault with Centers for Medicare and Medicaid Services cost-control policies that focused on provider billing fraud following the provision of imaging services. It urged CMS to redirect its cost-control efforts to constrain spending growth on the front end of imaging, specifically the patient referral practices of physician-owned in-office imaging facilities. The GAO noted that private insurance plans have successfully used prior authorization to slow the growth of imaging-related spending. It also cited physician credentialing to restrict equipment use to qualified practitioners and physician profiling, a statistical technique that identifies high-utilization physicians.

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