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Radiology Benefit Management Could Save Medicare up to $18 Billion Over 10 Years

Saturday, September 19, 2009 General News J E 4
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NASHVILLE, Tenn., July 16 The Medicare program could save between $11.6 and $18 billion in diagnostic imaging costs over the next 10 years by implementing a radiology benefit management (RBM) program similar to those used in the private sector. Currently, 90 percent of commercial health plans use RBM programs, saving billions of dollars. According to an independent analysis released today by MedSolutions (www.medsolutions.com), Medicare could reap similar financial benefits.

The report suggests potential savings associated with RBMs are much greater than projected earlier this year in the President's 2010 budget proposal. In that much discussed budget, a savings of only $260 million was estimated over a ten-year period.

"According to the American Journal of Radiology, up to 36 percent of imaging tests may be medically unnecessary," said Curt Thorne, president and chief executive officer of MedSolutions. "RBMs use evidence-based guidelines to help ensure that patients get the right test first. As a result, we prevent wasteful - and potentially harmful - overutilization that translates to billions in unnecessary expenditures."

Increased focus on imaging is important because Medicare spending on diagnostic imaging has been growing at an alarming rate. A June 2008 Government Accountability Office (GAO) report revealed Medicare spending on all imaging services from 2000 to 2006 more than doubled, topping $14 billion annually. During that same period, the cost of advanced imaging services such as CT, MRI and PET scans grew at an even faster rate of 17 percent annually over the same time period.

According to the analysis, the use of RBMs could reduce Medicare spending on advanced imaging services by an estimated $470 million to $720 million in the first year alone. Ten-year savings estimates range from $11.6 billion to more than $18 billion. The report uses utilization data of commercial payers who implemented MedSolutions' RBM services to project potential Medicare savings.

The savings outlined in the report are calculated using the methodology typically used by the Congressional Budget Office and Office of Management and Budget. For example, the estimates take into consideration the cost of implementing the program, premium offsets and the deduction of beneficiary co-payments. The report also introduces additional conservative assumptions. In addition, the report considers potential differences between the program's implementation in Medicare and commercial settings and it considers the possibility of a reduced growth rate of Medicare spending on advanced imaging services.

"Medicare has a long history of successfully partnering with the private sector to implement best practices that improve efficiency while maintaining quality of care," said Thorne. "Management of high tech imaging is clearly an area where Medicare can improve its business practices. In fact, the original Social Security legislation authorizing the Medicare Program called for Medicare to emulate the private insurance practices of the day.

"Today, 90 percent of commercial insurers, including many of those covering Congress and federal employees, use an RBM to improve the quality and cost effectiveness of imaging services provided to members. Partnering with an experienced RBM provider to control advanced imaging expenditures would save Medicare billions in the coming years."

The report was developed and validated by Dobson DaVanzo & Associates, LLC, a health economics consulting firm located in the Washington, D.C., metropolitan area. The report includes baseline imaging utilization statistics which are consistent with those produced by the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary and the most recent Medicare Trustees' Report. Dobson DaVanzo & Associates, LLC, works with both private and public sector clients to determine the financial impact of changes in the Medicare and Medicaid programs. A copy of the report can be found here: www.medsolutions.com/download/msi_report.pdf.

About MedSolutions

Using independently validated savings methodologies, MedSolutions specializes in intelligent cost management of medical services for commercial, Medicare and Medicaid payors. The company maintains management contracts for over 25 million individuals nationwide. Using robust data, predictive intelligence technology and clinical expertise, the company's innovative solutions extend beyond radiology management to other areas of medical specialty, including cardiology, oncology, ultrasound, emergency room and Premerus(SM)( )diagnostic accuracy. MedSolutions has been recognized for three consecutive years for its Call Center operations by the prestigious J.D. Power and Associates Award. Visit: www.medsolutions.com.

SOURCE MedSolutions
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