MedSolutions Praises the President’s Budget for Addressing Medicare’s Large and Growing Imaging Costs

Prior Authorization for Advanced Imaging Would Benefit Taxpayers, Improve Quality of Care

FRANKLIN, Tenn.--(BUSINESS WIRE)-- MedSolutions ( today praised President Obama’s 2013 budget, which would require prior authorization for advanced imaging services, such as CT, MR and PET scans, provided through Medicare. Such a program could save taxpayers as much as $24 billion over 10 years and protect patients from needless, potentially harmful radiation. This proposal comes on the heels of a similar recommendation by the Medicare Payment Advisory Commission (MedPAC) in its June 2011 report to Congress, which called for a prior authorization program for physicians ordering a significantly greater number of advance imaging services than their peers.

“We’re pleased to see the growing support for prior authorization from the White House and beyond,” said Curt Thorne, president and chief executive officer for MedSolutions. “The leadership at the federal level is embracing what their peers at commercial health plans and state Medicaid systems have known for many years – these programs produce significant cost savings while improving the care patients receive by assuring they avoid unneeded and potentially harmful tests.”

There is rising consensus that the inappropriate use of imaging is widespread throughout the healthcare system. Outside the government sphere, the American College of Physicians (ACP) recently announced the rollout of guidelines to help doctors determine what medical screenings, including imaging, are appropriate for their patients. In an article published in last month’s Annals of Internal Medicine, the ACP cited 37 common clinical situations where screening did not promote health and, in fact, might harm patients. Dr. Steven Weinberger, CEO of ACP, stated that excessive testing costs the nation $200 billion to $250 billion annually.

In addition, the challenges with advanced imaging spending are well documented. A 2009 MedPAC report to Congress found that from 2002 to 2007, the use of all types of diagnostic imaging tests rose by 44 percent – nearly double the growth in overall services per patient. Also, the Journal of the American College of Radiology reported that one-third of all imaging studies are ordered inappropriately. Although the rate of growth has moderated somewhat in recent years, the underlying level of inappropriate use remains high and represents an annual cost that provides no benefit to patients.

“The only way to truly address our skyrocketing budget deficit is to address Medicare spending, and requiring prior authorization for imaging provides a way to do that and improve quality at the same time,” said Thorne. “The health plans covering members of Congress themselves include such programs to save taxpayer money and keep them safe. Shouldn’t they require the same of Medicare?”

There is significant independent validation for programs that help control the overutilization of medical imaging by ensuring that the right scan is performed and only when clinically appropriate:

  • Government Accountability Office (GAO): In a report to Congress, the GAO recommended the adoption of an approach like prior authorization to address the rapid growth in Medicare Part B spending on imaging services, which more than doubled between 2000 and 2006, reaching $14 billion.1 The GAO also found that cardiologists, for example, derive more than one-third of their Medicare income from in-office imaging.
  • Milliman/National Imaging Associates (NIA): NIA commissioned the independent actuarial firm Milliman to study the potential impact of the adoption of a radiology benefit management (RBM) program by Medicare. Milliman estimated savings of up to $24 billion by 2020 if a program were implemented by the beginning of 2012.2
  • UnitedHealth Group: The UnitedHealth Center for Health Reform & Modernization presented a working paper that suggested that the adoption of a radiology benefit management program by Medicare would save the federal government approximately $13 billion over 10 years.3
  • Dobson DaVanzo/MedSolutions: MedSolutions commissioned independent health economics firm Dobson DaVanzo & Associates to analyze the company’s data and provide an estimate of cost savings should Medicare adopt an RBM program. The firm estimated savings of up to $18 billion in 10 years.
  • MedPAC: As described above, MedPAC recommended in its June 2011 report to Congress that Medicare establish a prior authorization program for physicians ordering a significantly greater number of advanced imaging services than their peers.4 The Blue Cross Blue Shield Association voiced its support for such a program, estimating that targeting outliers alone through such a program would save $1 billion in 10 years.5

About MedSolutions

Using independently validated savings methodologies, MedSolutions specializes in quality-driven intelligent cost management of medical services for commercial, Medicare and Medicaid payors. The company maintains management contracts for more than 33 million individuals nationwide. Using robust data, predictive intelligence technology and evidence-based clinical expertise, the company's innovative solutions extend beyond Radiology Management to other areas of medical specialty, including Oncology, Cardiac Imaging, Sleep, Ultrasound, Lumbar Spine Surgery, and MedSolutions' groundbreaking Premerus® Diagnostic Accuracy program – the nation's first solution for reducing diagnostic error rates to improve the quality and cost of care. MedSolutions has been recognized for outstanding customer service and effective call center management by the International Customer Management Institute and for four consecutive years by the prestigious J.D. Power and Associates Award. Visit

1Medicare Part B Imaging Services: Rapid Spending Growth and Shift to Physician Offices Indicate Need for CMS to Consider Additional Management Practices,” GAO, June 2008 (

2Potential Savings to Fee-for-Service Medicare from Radiology Benefit Management Programs,” Milliman, July 13, 2011 (

3Federal Health Care Cost Containment – How in Practice Can it be Done?,” UnitedHealth Center for Health Reform & Modernization, May 2009 (

4Medicare and the Health Care Delivery System,” MedPAC, June 2011 (

5Building Tomorrow’s Healthcare System: The Pathway to High-Quality, Affordable Care in America,” Blue Cross Blue Shield Association, September 28, 2011 (


Katie Lilley, 703-889-8504 x2
[email protected]

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