GAO Looks to Private Payers for CMS Imaging Savings

Borrowing from the playbook of private payers, the Government Accountability Office (GAO) is recommending that the Centers for Medicare & Medicaid Services (CMS) consider a prior authorization requirement for imaging services to help cut costs.

The GAO studied Medicare spending on imaging services from 2000–2006 — including ultrasound, X-ray, CT scans, MRIs, nuclear medicine and other imaging — and found that Part B spending under the physician fee schedule increased to roughly $14 billion, more than doubling over the six-year period. Imaging is one of the fastest-growing set of services under Medicare Part B, the government watchdog says.

The spending growth is somewhat linked to physician offices providing imaging services, according to the GAO analysis. The agency asks “whether Medicare’s physician payment policies embody financial incentives for physicians to overuse imaging services.”

The GAO study considers strategies that private health insurers use to keep imaging costs down. A common practice is requiring physicians to get approval of coverage before ordering an imaging service. “Several plans attributed substantial drops in annual spending increases on imaging services to the use of prior authorization,” the GAO says.

The CMS uses retrospective payment safeguards; the GAO recommends it look at adding more front-end management of imaging services. In addition to preapproval, for instance, the CMS might consider the system of privileging, under which a plan only approves imaging orders from physicians in certain specialties.