The Government Accountability Office is urging Congress to require Medicare to adopt prior authorization procedures for outpatient imaging services, saying that the federal health program's current approach has allowed costs to balloon.

According to the GAO, from 2000 to 2006, Medicare Part B spending on imaging services more than doubled to $14 billion. In particular, spending on more technically demanding imaging studies, such as computed tomography, magnetic resonance imaging, and nuclear medicine, rose 17% a year, compared with 9% annual growth for less complex studies such as x-rays.

Imaging studies have increasingly shifted to the outpatient sector and the proportion of physician income from imaging is steadily rising, said the GAO in its report, “Medicare Part B Imaging Services.” The report had been requested by Sen. Jay Rockefeller (D-W. Va.).

The agency noted that the proportion of Medicare Part B spending on imaging conducted in a physician office setting rose to 64% in 2006 from 58% in 2000.

Shortly after the report was issued, Sen. Charles Grassley (R-Iowa) introduced legislation (S. 3343) that would require physicians making referrals for MRIs, CTs, PET scans, and potentially other modalities to disclose to patients in writing if they have ownership in the imaging facility. The proposal was initially included in the bill that canceled Medicare physician fee cuts but was dropped in the final package.

To compile the report, the GAO analyzed Medicare claims data and also interviewed health plans and radiology benefit management companies (RBMs), which the private sector has used to implement prior authorization.

The agency said that because of the rapid growth in imaging, “we recommend that [the Centers for Medicare and Medicaid Services] examine the feasibility of expanding its payment safeguard mechanisms by adding more front-end approaches to managing imaging services, such as using privileging and prior authorization.”

But for Dr. Ted Epperly, president of the AAFP, that recommendation is a “draconian approach.”

“It deals with the front end of the system, and we should be moving away from [that] to the real issue—cost. Current MRI is overvalued and overpriced. Costs should be dropped, rather than penalizing by denying access and hassling physicians,” he said in an interview.

In addition, the measure presents “a substantial problem for family physicians in terms of patient care.”

“It is a barrier to good care,” he said in an interview. “The existing criteria were developed by specialists and radiologists without a clear patient-centered perspective. I would prefer that appropriate use criteria [be considered] and that we work to get the FP perspective” included.

Dr. Jack Lewin, the CEO of the American College of Cardiology, said in a statement that prior authorization “is a Band-Aid to the utilization issue and not a viable solution. Medicare should look to accreditation, appropriate use criteria, and improved communication to lower utilization and improve quality.”

Dr. Lewin also noted that “the agency did not take into account physician input, nor did it use data from 2007 showing a decline in imaging growth.”

The Medical Imaging Technology Alliance (MITA) issued a similar critique, and also noted that the report did not take into account appropriateness and accreditation criteria that were part of the just-passed Medicare bill that eliminated a scheduled reduction in physician fees. The law will require imaging facilities to be accredited starting in 2012.

Appropriateness and accreditation will “ensure that an image is taken at the right time by the right person and in an appropriate manner,” MITA vice president Andrew Whitman said in an interview. MITA is the medical technology trade association of the National Electrical Manufacturers Association.

Mr. Whitman also criticized the GAO's support of RBMs and other tools to rein in costs. RBMs do not readily share guidelines and appropriateness criteria and are not well regulated, he said.

In summing up his own experiences in getting prior authorization for imaging, Dr. Epperly said he found the staff he dealt with were “good at following the guidelines, [but they] are not flexible and more of a one-size-fits- all approach. I see a lack of judgment on their part.”

In response to the GAO report, the Health and Human Services department said it, too, had concerns about the “administrative burden” of using RBMs, “as well as the advisability of prior authorization for the Medicare program,” the report stated. HHS pointed out that there were no independent data showing that RBMs could successfully manage imaging costs.

It also pointed out that proprietary guidelines in use by RBMs might conflict with those being promoted by federal health authorities so that the RBM recommendations could present a conflict for Medicare when considering payment.

“We do not dispute HHS's reservations about prior authorization, and agree that these concerns will require careful examination within the context of Medicare statutes and regulations,” said the GAO report.

Imaging Preauthorization Advised Under Medicare