Press Releases

by  Gregg P. Allen, M.D., Executive Vice President, Chief Medical Officer, MedSolutions

As published  in Healthcare Savings Chronicle, May 2007 

As managed care decision-makers continue to focus on the dramatic increase in the use of imaging procedures for patient diagnosis, there is growing concern regarding the collective impact of waste, abuse and fraud upon the overall cost of care and patient safety.

Fraud and abuse encompasses a wide range of improper billing practices that includes misrepresenting or overcharging with respect to services delivered. Both result in unnecessary costs to the insurer; but fraud generally involves a willful act, whereas abuse typically involves actions which are inconsistent with acceptable business and medical practices.[1]

 Payers are alarmed over these issues, particularly in light of reports such as the BlueCross BlueShield Association statement that diagnostic imaging, including x-ray procedures, ultrasound, CT, MRI and nuclear medicine, is the most costly type of technology for all payers.  While the total number of imaging procedures nationally grew by about 40 percent from 2000-2005, it is projected to grow by another 26 percent by 2008, when almost half a billion procedures will be done each year.  MRI use will grow by 133 percent and CT use by 122 percent, documenting that the highest cost imaging is growing at the fastest rate.[2]

Radiology, on average, accounts for 10 percent of every healthcare dollar, and the cost of high-tech imaging is growing faster than pharmacy drug costs.[3]   While high-tech procedures typically represent only 15-17 percent of all imaging procedures performed, they account for over 50 percent of radiology costs, and represent 75 percent of the cost trend.

 High-Tech Imaging                                                      Low-Tech Imaging

Computerized Tomography (CT Scans)                                  X-rays

Computerized Tomography Angiography (CTA Scans)           Mammograms

Magnetic Resonance Imaging (MRI)                                     Bone-density Scans

Magnetic Resonance Angiography (MRA)                             Echo Cardiograms

Magnetic Resonance Spectroscopy (MRS)                           Ultrasound

Nuclear Cardiology

Positron Emission Tomography (PET Scan)

Waste Is Expensive

Amid the surge in procedures is the stark reality that there is also a significant amount of waste.  Reports indicate that unnecessary imaging is estimated to cost the country billions, possibly even as high as $10 billion annually.[4]  When these procedures are warranted by patient condition, they are among the best diagnostic tools available. However, there are several factors which contribute to the “waste factor” and should be examined for their impact on the overall spends.

Many procedures are ordered as a result of patient demand. Consider the active young man who insists on an MRI at the first hint of knee or shoulder pain or the expectant mother who wants a picture of her baby in utero and requests a fetal ultrasound study.[5] It is estimated that up to one-third of the nation's health care expenditures are consumed by the "worried well."[6]

Physician uncertainty also contributes to the problem, with repetitive and duplicative studies ordered for the same individual because the patient failed to share information that the test had already been performed or doctors simply did not ask the right questions.  Additionally, there are key culprits contributing to waste including defensive medicine, use of imaging studies in place of the physical exam, lack of knowledge regarding the appropriate imaging study, increasing tendencies towards aggressive surveillance and treatment of incurable diseases, and direct-to-consumer marketing[7].

With increasing frequency, emergency departments often send patients for an imaging test before or in place of a physical exam.[8]  This can also occur under capitated primary care arrangements, with a busy primary care physician (PCP) finding it easier to send a patient for an imaging study than to bring that patient in for a history and physical exam, for which the PCP may not be reimbursed by the managed care plan.[9]

Another problem is the ordering of a less precise study for a given indication, prompting the need for physicians to order an additional study to arrive at an accurate diagnosis.  For example, if a CT is ordered as the “middle ground” and fails to provide necessary information, the doctor will be forced to order the MRI.  The goal is to order the right test at the outset, saving time and resources for both the member and the plan.

Researchers from Massachusetts General Hospital used projections based on data and decision models to show that whole-body CT had a price tag of $151,000 for each additional year of life gained as result of the scans. This is due to the fact that 90.8 percent of patients had at least one positive finding, but only 2 percent had disease.

Thus, further imaging studies and procedures in patients with false-positive results accounted for a third of the total cost. In addition, the procedures for reporting results were highly variable, thus demonstrating a lack of quality control.[10]

Screening studies represent another arena for waste, with multiple studies and repeat studies representing high costs that could be eliminated. A study of 1,087 subjects who were enrolled in a large managed care organization and participated in the prostate, lung, and colorectal and ovarian cancer screening trial showed that 43 percent of subjects had at least one false-positive screening result. Eighty-three percent of these subjects received follow-up care. The increase in medical care expenditures in subjects with false-positive results were $1,171 and $1,024 for men and women, respectively.[11]

Radiologists also contribute to the problem, since their reports often suggest that additional examinations be performed “if clinically indicated.” Referring physicians then believe they are obligated to obtain these extra tests. Thus, quality assurance programs that include “precision image interpretation” will also result in cost containment.

Finally, there is the “incidentaloma” factor which occurs when a benign finding is detected on an imaging exam that then requires additional testing, including more imaging, to confirm that the “finding” is in fact harmless.  This results in a cascade effect, whereby a benign result from a study not indicated in the first place leads to further testing to confirm the benign findings. The upshot is patient harm, unnecessary anxiety and inconvenience, as well as escalating costs.

Self Referral Leads to Abuse

There is a clear incentive for physicians to perform imaging studies when the practice will financially benefit from the study being performed. Instances of in-office imaging continue to grow as physician groups look to expand sources of practice revenue, and in some instances physicians may order a study on virtually every patient that comes into the office. 

Affordable imaging equipment is adding to the growth, along with leased purchase agreements between free-standing imaging centers and physician groups. Studies indicate that physicians self-refer patients to owned equipment four times more often when compared to practices without in-office equipment ownership.[12]

Financial incentives are not the only motivating factors driving the increased utilization of imaging in a self-referral environment. For example, one study assessed the utilization of chest radiography in two facilities operated by a single family medicine department at the University of Western Ontario. All patients in the study had chest-related diagnoses. One of the two facilities had on-site x-ray equipment, whereas patients at the other facility were referred to an outside radiology office when chest radiography was needed. The family medicine physicians did not own the x-ray equipment or interpret the films and thus had no financial incentive to refer patients. Nevertheless, patients seen in the facility having the on-site x-ray equipment were 2.4 times more likely to have chest radiographs than patients seen in the facility with no x-ray equipment.[13] 

Two other recent investigations showed that self-referral leads to higher imaging-related costs for outpatient care for a variety of clinical presentations.[14]  These higher costs are related to the fact that self-referring physicians utilize imaging more than radiologist-referring physicians and self-referring physicians charge more than radiologists in comparable clinical settings. Of these two influences, the differences in utilization contribute most to the higher costs. However, the study confirms that physician payments also contribute to the higher costs that self-referral imposes.[15]

Any discussion of abuse should include 3D software reconstruction and the incidence of facilities tacking this revenue enhancement on to every CT or MRI.   Reconstruction is the abstract "rebuilding" of images that have been previously acquired in a single dimension. In the medical imaging context, it is often necessary to acquire data from multiple dimensions (axial, saggital, and coronal) in order to be able to more accurately characterize the anatomy or suspected pathology.   Also, a big part of reconstruction is then being able to view, or visualize, all the data once it's been put back together again.[16]

In most cases, reconstruction is unnecessary and the Centers for Medicare and Medicaid Services (CMS) have clamped down on this abuse by changing the code. Just because the technology is available does not mean it should be used in every study.  According to one report, there are a lot of studies that do not merit 3D.  Reports indicate that about 5 percent to 10 percent of the CTs, 20 percent of the MRIs, and 20 percent of the ultrasounds are reconstructed and stored as a 3D volumetric data set.[17]  This constitutes a major abuse and should be addressed.

Finally, the advent of Color Doppler in the late 1990s -- an enhanced form of Doppler echocardiography --introduced yet another area of abuse. With Color Doppler, different colors are used to designate the direction of blood flow. While this adds information for the interpretation of the Doppler technique[18] and carries a specific CPT code, it is common knowledge that some physicians “turn on the color switch” whether or not there is any indication to observe the blood flow in a given patient.

Fraud is Unacceptable

The rapid increase of imaging equipment into the outpatient setting, the lack of equipment standardization, and the increase in in-office imaging raise opportunities for fraud, particularly the reading of imaging studies by unqualified professionals. With the exception of mammography, there is virtually no national mandatory certification process for providers who perform imaging services.[19]  Additionally, there are some instances where a physician will submit a bill for studies and contrast material – and simply neglect to provide the service. 

While there is little to no oversight or regulation for the provision of imaging services on federal or state levels, several reviews of fraudulent practices related to imaging are underway at the Department of Health and Human Services, Office of the Inspector General.[20] The work of the OIG is planned and performed by its four direct mission components, including the offices of Audit Services (OAS) which conducts financial and performance audits of departmental programs and operations to determine whether objectives are being achieved, which aspects of programs need to be performed more efficiently, and to identify systemic weaknesses that give rise to fraud, waste, or abuse.  Two Program Audits under the Fiscal Year 2007 Work Plan target imaging issues that have previously been addressed:

Advanced Imaging Services in Physician Offices

This review will examine the appropriateness of imaging services provided in physician offices. From 1999 to 2005, utilization of advanced imaging services, such as MRI, PET, and CT scans, has grown on average by 20 percent per year. In 2005 Medicare allowed charges of over $7 billion for these services. This review will examine the nature of the growth of these services over this period including examination of billing patterns in certain geographic areas and practice settings.

Inappropriate Payments for Interpretation of Diagnostic X-rays in Hospital Emergency

Departments

We will determine the extent of inappropriate payments for the interpretation of diagnostic x-rays performed in emergency departments. In 2004, more than 2.5 million diagnostic x-rays were performed in Medicare-certified hospitals with emergency departments. According to the Medicare Claims Processing Manual, contractors are to pay for only one interpretation of an x-ray procedure furnished to an emergency department patient. They pay for a second interpretation, identified through the use of modifer 77, only under unusual circumstances, for instance when the physician performing the initial interpretation believes a specialist is necessary. Documentation must be present to support the second claim. We will determine whether the services were medically necessary and if the tests were interpreted contemporaneously with the patient’s treatment.

The need for quality control and quality assessment and improvement methods is evident, such as the methodology established and implemented by the Joint Commission on Accreditation of Health Care Organizations (JCAHO) in hospital imaging settings.  However, many outpatient imaging centers and medical offices have not established formal, comprehensive, and well-documented programs, leaving these settings open to abusive practices if not monitored assiduously.

It appears that low-tech imaging is one of the most fertile areas for abuse, with some industry pundits characterizing low-tech imaging as “The Wild, Wild West.” Today, low-tech modalities account for 40-50 percent of the radiology spends and 80 percent of the volume. [21]  It is incumbent upon health plans and their radiology management partners to carefully track this spend and detect any incidence of fraud.

Patient Safety:  Ultimate Impact of fraud, waste and abuse

Patient exposure to radiation is an important consideration in the copious use of CT scanning. The National Cancer Institute estimates that the use of CT in both adults and children has increased 7-fold in the past 10 years. CT scans are estimated to contribute 65 percent of the effective radiation dose from all medical x-ray examinations to the population.[22]

 Unnecessary exposure to radiation poses serious quality implications for patient care. The chart below demonstrates the radiation dosage from common CT studies.

Relative Doses and the Equivalent Natural Radiation
Source: National Radiation Protection Board

Managed care decision-makers now seek the effective management of radiology services to better support physicians and, concurrently, assure patients that they get the tests that will help to improve diagnosis.  A first priority is to serve members, ensuring that they receive the best possible imaging exam for their condition, as quickly and efficiently as possible.

Many plans are turning to an NCQA-certified utilization management program that provides physicians with timely clinical decision support in the daunting task of selecting the high tech diagnostic imaging procedure most beneficial to the care of each patient.  Recommendations should be based upon best practices and clinical evidence, and should facilitate identification of the most appropriate imaging procedure, not supersede or replace sound medical judgment.

 This is not simply a flat response approving or denying the procedure; rather it should involve nurses and board-certified physicians who are qualified to suggest and authorize alternative imaging studies or treatment plans which are more beneficial to the patient – including the reasoning behind the recommendation. 

The goal is to help physicians find the procedure that will give them the best diagnostic information for each patient, supporting them with the radiology expertise they need and the guidance that will help patients avoid unnecessary exposure.

Sidebar: 

Controlling Costs

There are several strategies to help control the soaring costs of diagnostic imaging, including:[23]

• Utilization Management: Some health insurers are using radiology management firms, and are attempting to control diagnostic imaging costs through utilization management programs. This includes strategies to minimize physician self-referrals, imposing credentialing criteria, using independent activities to assess providers' competency to perform diagnostic imaging services, and instituting pre-authorization programs for non-emergency outpatient CT, MRI and certain other diagnostic imaging studies.
• Physician Self-referral Restrictions: Federal Stark II regulations generally prohibit physicians from referring Medicare patients to entities with which the physician or immediate family member has a financial interest. The regulations apply to diagnostic imaging procedures and are intended to prevent abusive referral patterns for federally funded insurance programs, but do not apply to private insurance programs. Some states have similar statutes that also regulate referral of private pay patients; Pennsylvania law requires providers to disclose to patients their financial interest in the equipment.
• Evidence-based Practice Guidelines: One strategy is to develop and disseminate nationally recognized, evidence-based practice guidelines and to educate referring physicians about the proper use of diagnostic imaging. The American College of Radiology has developed appropriateness criteria for a number of common presentations and developed recommendations for tests that have been found to be particularly effective, and tests that are not as effective. Purchasers could link the criteria to reimbursements to help reduce unnecessary scans and costs.
• Patient Education: Patient education campaigns, similar to those addressing inappropriate antibiotic use, may be effective in discouraging patients from seeking unnecessary tests. Patients need to know that utilizing the newest technology can be expensive, not always necessary, and may not result in better quality outcomes.
• Electronic Medical Records System: Studies have found that at least 10 percent of diagnostic tests are retests because prior results were unavailable to the treating physician at the point of service. Retesting could be reduced with electronic records, and better communication and process management among the relevant parties.

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