News and Commentary

CMS can take lessons from private insurers

From 2000 through 2006 Medicare Part B spending for imaging services under the physician fee schedule more than doubled — increasing to about $14 billion. The more costly scans — CT scans, MRIs, and nuclear medicine — rose faster, 17 percent a year, on average, than ultrasound, X-rays, and other standard imaging.

Private insurers rely primarily on prior authorization. In the report, “Medicare Part B Imaging Services,” issued by the Government Accountability Office, the watchdog agency interviewed insurers about their imaging management practices.

Several plans attributed substantial drops in annual spending increases on imaging services to the use of prior authorization. To a lesser extent, private plans use privileges, by which a plan limits its approval for ordering certain imaging services to physicians in certain specialties, and profiling, which entails a statistical analysis of medical claims data measuring an individual physician’s use of services relative to a desired benchmark.

In contrast, CMS employs an array of retrospective payment safeguard activities that occur in the post-delivery phase of monitoring services and are focused on identifying medical claims that do not meet certain billing criteria. Private plans’ experience suggests that front-end management of these services could add to CMS’s prudent-purchaser efforts.

Imaging costs more than double, 2000 through 2006

Source: GAO analysis of Medicare Part B claims data


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