Imaging prior authorization reveals cost savings

When compared to a decision-support approach, prior authorization for imaging tests and services could translate into cost savings, a commentary in Diagnostic Imaging argues.

Through prior authorization, providers must receive permission before ordering tests, such as MRIs and CT scans. In June, the Medicare Payment Advisory Commission issued a report concluding that physicians should seek such approval for imaging tests to receive Medicare payments, according to The Hill, as a way to reduce unnecessary tests.

For instance, more than 200 hospitals use double CT scans on more than 30 percent of their Medicare outpatients when the U.S. average is 5.4 percent.

In addition to ensuring that patients receive treatment based on their individual histories and existing data, prior-authorization also can save an institution money based on the fact that providers are reimbursed for medically necessary, evidence-based services, Douglas Tardio, the commentary's author, says. Tardio is president and chief operating officer of specialty benefit management company, CareCore National.

On average, radiology prior authorization reduces costs by more than $60 for each insured patient, that is, $60 million a year for a health plan, Tardio writes.

In 18 percent of cases, prior authorization results in different tests or treatments than with a decision-support approach, Tardio adds. Critics of prior authorization, however, argue that it is too time-consuming because providers must obtain authorization online or over the phone, which might affect patient care.

For more:
- read the Diagnostic Imaging article (reg. req.)
- read this article in The Hill from June

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