In mid-October 2000, at the Trumbull, Conn, headquarters of the Fairfield County Medical Association, executive director Mark Thompson received a seemingly innocuous phone call. Cigna HealthCare of Connecticut was changing radiology imaging management companies, going from Magellan to AIM (American Imaging Management, based in Northbrook, Ill). “They told us that this was going to be an improvement and better service,” Thompson remembers. “We just thought it would be business as usual.” But that was not the case.
Two weeks after that phone call, a new x-ray privilege regulation went into effect. On November 1, rheumatologists, gynecologists, ear, nose, and throat specialists (ENTs), as well as chiropractors and podiatrists were told that they would not be reimbursed any longer for x-ray imaging performed in their offices. Instead, the practitioners were told to send any patients needing studies to an authorized radiology center.
UM Tempest, Connecticut Style
The announcement was met by an immediate, resounding backlash against the new regulation. Thompson knew something was up when physicians’ complaints began to pile up in his office.
But local chapters of the Connecticut Medical Association were not the only venues where doctors vented their frustration. Connecticut Attorney General Richard Blumenthal also became aware of the situation. According to a news story in the Connecticut Post on November 3, Blumenthal was quoted as saying that he would be “meet[ing] soon with Cigna officials to determine what they will and won’t do. We’ve received complaints. We’ve expressed our concerns to Cigna.”
Swiftly, on the heels of Blumenthal’s comments, things changed. Within days, the Fairfield County Medical Association found out that its member gynecologists, ear, nose, and throat specialists, and rheumatologists were once again allowed to perform x-ray imaging in their offices, and? to be reimbursed for the claims generated.
As Thompson was to learn later, Blumenthal and Gerald Martens, of the Office of the Managed Care Ombudsman for the state, met with Cigna officials and were able to get a complete reversal of the policy for all specialties, including podiatry and chiropractic. The Ombudsman Office was formed within Connecticut’s Insurance Department in July 1999 as part of the state’s new managed care law. In part, the law is intended to make it easier for consumers to deal with insurance companies.
UM: What is Happening?
What are the ramifications of Cigna HealthCare’s missteps, and how should its actions be viewed in the overall context of radiology utilization management (UM)?
“I believe that UM of imaging right now is in limbo,” according to Donald Ryan, CEO, New York Medical Imaging, Wappingers Falls, NY. “There’s a lot of negative publicity, and a lot of negative feeling among both providers and subscribers regarding any effort to impose any kind of precertification or other processes that require patients to establish medical necessity. What one is seeing coming out of regulatory agencies is political reactions.? While the tools work, while the tools are necessary, while we think they’re effective, at this point in time, you’ll find a lot of managed care companies are nervous about imposing these tools. They are worried they’ll lose subscribers.”
The radiologist perspective on radiology UM efforts is somewhat less generous. “I think [radiology] UM by the managed care industry has been pretty much a failure,” according to Howard Forman, MD, a health economist and radiologist at Yale University School of Medicine, New Haven, Conn. “There’s very little good evidence that current systems are actually managing utilization other than through direct refusal to pay for studies. Many of these managed care and radiology service organizations that are out there have sought to portray themselves as being capable of reducing utilization, when, in fact, what they have done is reduce payment for studies-but not necessarily reducing the actual utilization of those studies. I think that for the most part, it’s very hard to identify strict criteria by which to use preauthorization and precertification for imaging studies, when a very large percent of imaging currently is occurring in the urgent or emergent setting.”
Forman also pointedly mentions the aftermath of such payment reductions. “I can tell you that in our experience here at Yale, we have been denied payment on $239,000 in claims this past year for studies that were performed. The companies that are refusing to make the payments on those studies-whether legally correct or not-claim that those studies actually weren’t done. If they’re not paying for it, it must not have been done. But the fact is that these cases were done, they’re just being done essentially pro bono.”
UM Primer Highlights: History
Utilization management (UM) is a methodology to impact costs in health care to streamline proper utilization of medically necessary procedures. “In the true definition of the phrasing,” says Cherrill Farnsworth, CEO, HealthHelp, Houston, “UM is not cost containment through recontracting of providers. Rather, UM is the management of the utilization of procedures through case management, preauthorization, benchmarking and profiling, development of case rates, per diems, and so on.”
UM had its beginnings in the 1940s, when there were efforts at maternity cost containment. “This was largely limited to developing a network of providers who gave discounts off billed charges to employers and their representatives,” Farnsworth says. “It was absolutely not clinically based, but based on financial negotiations and preferred provider status.”
The first real stabs at UM were developed in the 1950s, when the first staff model health maintenance organizations (HMOs) were developed in California, and also around employee-union-driven geographic areas of Detroit and New York City. “In these early staff models,” comments Farnsworth, “the physicians and clinical employees were on staff and paid a salary, benefits, and a bonus based on performance. These early staff models began to develop utilization protocols, and focused on studying the means to deliver care efficiently in order to get the business to profitability without harming patients.”
While UM history overall is many decades old and has had far-reaching effects, radiology UM’s history is much more recent.
“Radiology UM has been around in one form or another for at least the last 10 years as a serious tool,” according to Ryan. “The process has been probably more focused and more broadly accepted on the West Coast, where it was utilized in different formats initially than on the East Coast. This was because HMOs are so much more prevalent on the West Coast. I think what happened initially in terms of the etiology is that managed care companies came forth with risk-capitated agreements for imaging. A lot of providers went ahead and executed these risk agreements, believing that they could, with a fixed pot of money, manage utilization by properly selecting the providers and working with those providers, and either subcapping those providers or using another methodology. But that didn’t work terribly well for a lot of reasons.”
Ryan highlights some of the key causes:
1) Different practitioners usually had very different business objectives and practice patterns, so there was no alignment of objectives in the physician groups that were participating in the risk contracts.
2) The physician groups found that changes in community standards and in imaging technology were moving so quickly, and utilization was growing so rapidly, that it was very difficult to get involved in a risk contract and expect to have any long-term financial benefit from it.
“Because of? the desire for managed care entities to find another way to slow down the growth or increasing costs of imaging, UM became much more focused on techniques,” Ryan notes. “Programs started to go into place where certain limitations were put on privileging various specialists to do imaging, whether there was risk attached to the deals or not.”
Another radiology UM player is John Donahue, CEO and president, National Imaging Associates (NIA), Hackensack, NJ. NIA has a major presence in Connecticut with approximately 800,000 member-enrollees that are covered in four different contractual relationships in the state, including the Connecticut State Medical Society IPA, physician-health services HealthNet, ConnectiCare, and MedSpan, or approximately 16% of NIA’s total national enrolled membership. According to Donahue, state-of-the-art radiology UM is moving away from a gatekeeper approach and toward evidence-based techniques.
Donahue explains that the techniques used for radiology UM were derived from management of pharmaceutical costs. “This entire industry started to emerge in the late 1980s and early 1990s as radiology technology started to advance, and costs started to advance. Variation in the application of the technology became apparent across the country. Right after the managed care industry began to focus on pharmaceutical benefit management (which has had many macro qualities similar to those of radiology, being somewhat complicated and broad reaching, as well as innovative and high-cost), the MCOs [managed care organizations] began to see the need to apply the same types of attributes like quality focus, best practices, and so forth to radiology as well. The early folks who were in the arena looked at prices as a major opportunity to reduce costs, which in fact they were, but it didn’t necessarily mean improved quality. So the early applications were price-driven, including capitated and restrictive networking approaches, all of which I think are very rudimentary, and really more problematic than helpful.”
Roping in Emerging Technology
Today, there are many techniques used in radiology UM. For the more technically advanced and expensive procedures such as CT, MRI, PET (positron emission tomography), and nuclear medicine, precertification is the most commonly used UM technique. “Precertification is a fairly labor-intensive process,” Ryan explains. “There are not only criteria for the imaging itself, but also criteria for the physician who has to justify the use of imaging. These have had a significant sentinel effect-the provider has to think twice to make a call for imaging, and to justify the utilization. That has had a significant effect in reducing just the demand. Precertification has evolved very significantly in the imaging environment.”
Privileging and utilization profiling are other commonly used UM techniques. Profiling is a retrospective process that looks to self-referral and utilization patterns of referring doctors, according to Ryan. “This UM technique looks at the physicians’ specialties and also looks at the diagnoses, and links specialties and diagnoses to various utilization patterns for various imaging procedures-looking for outliers if you will.” The privileging criteria are based on a number of components, such as practice standards (in terms of equipment, and technologists available to do the procedures) and quality assessment of the images taken as well as their interpretation. Ryan adds that “they also address the immediacy of the need for that specialty in providing the imaging services within their offices as an integral part of patient treatment. So those components have a significant impact on utilization over the long haul.”
The challenge of privileging is matching the right physician with the right procedures to produce the best results,? in terms of both outcomes and economics. And privileging the right physician for the right procedure can have a dramatic effect on utilization. Andrew W. Litt, MD, vice-chairman of radiology, New York University School of Medicine, and president, New York Medical Imaging, presented results of a recent privileging program at the November 2000 Radiological Society of North America meeting.
According to Litt, “We did a study concerning orthopedic bilateral imaging both in the office, and when it was referred out. There was a dramatic difference between the amount of imaging being done in the orthopedists’ offices versus when they farmed it out, because of the convenience of the facilities being located right there in the orthopedists’ offices.” Litt explains further that “this issue with the orthopedic bilateral studies came to our attention because it was such an overwhelming number, that we said, ‘Hey, something’s really fundamentally wrong here. This is a major problem with self-referral. And we need to correct this problem.'”
Another program instituted by New York Medical Imaging focused on giving ordering privileges for costly procedures such as CT and MRI to specialists only, also with dramatic results (see article, page 54).
When NIA instituted a restricting out-referral program, the number of CT and MRI procedures requested by the orthopedists dropped significantly-in both procedures (23% and 25%, respectively) and also RVUs (24% and 26%, respectively), Donahue says.
According to Donahue, NIA focuses on? providing consultation to referring physicians that takes in the latest best practices and clinical standards. A new program offers radiology UM with an Internet-based consultation program. “If you are a primary care physician in Connecticut, and you have a particularly complex patient case, you can go online to our application and put in some clinical information,” Donahue explains. “We draw from the patient-history plans we have, and through a series of algorithmic questions, guide the physician to the right use of the technology, and direct contact with an appropriate radiologist. Additionally, we gather outcomes and make recommendations to the referring practitioner as to which hospital or provider is best to care for that patient. That’s particularly helpful for complex pediatric cases.”
How much of current imaging is actually unnecessary or extraneous? “Actually, a lot of plain films are probably being overutilized, particularly those that are done in the referring doctor’s office,” Litt says. “In general, there are a lot of multiple tests being ordered for the same thing without necessarily a clear-cut process for [determining] what might be the most appropriate test. For example, in a patient with an abdominal problem, you might see an ultrasound followed by a CT scan, followed by an MRI scan. It may be most appropriate to have the best test go first, and be the only one used.”
But Litt additionally cautions that over-utilization has to be looked at on a case-by-case basis. “It’s one thing to say that there may be some overutilization, and we can look at some specifics of a particular procedure,” Litt says. “A lot of people will then say, ‘If X percent of this study is overutilized, then you can generalize and say X percent of all studies are overutilized.’ And that’s probably not appropriate.”
Ryan attributes the overutilization of imaging to the lack of physician barriers. “When it comes to imaging, it’s very available, it’s generally noninvasive, and imaging is perceived as a very positive diagnostic tool by both providers and patients,” he says.
However, the most significant factors for overutilization are the patients, and the intense competition for those patients. “Subscribers don’t want to hear ‘no’ to something they want, whether they need it or not,” Ryan notes. “I think the MCOs have gotten much more aggressive in competing with each other for market share. In order to increase that market share, they have to show that their products are less interactive or interfering, and more people friendly and provider friendly.”
But these upward pressures on imaging utilization are having effects with unknown consequences. “The trends for imaging in the last year and a half alone show that outpatient imaging is increasing at a rate that is beginning to match the annual trend increases in prescription drugs, for which many reports are pointing to figures of 15% to 20%,” notes Ryan. “And that has been further fueled by the technology.”
With better technology, the spectrum of tests and applications has increased, as well as acceptance of their usage by doctors. “PET scanning, for example, is becoming a much more accepted procedure,” Ryan says, “and Medicare has just broadened its rules regarding what it considers appropriate uses for PET scanning.” As MRI and CT have become increasingly more sophisticated, “their use in diagnosis has increased as [new applications for] these two modalities have broadened what they can be used for. These things, I think, are resulting in a much higher demand for imaging services.”
The Question of Quality
There is another major facet of the utilization issue, and that is the quality of imaging. “We know that in addition to some sense of overutilization as a general phenomenon, there are also quality issues in radiology,” says Litt.
He mentions a study conducted at New York University that looked at women who came in with abnormal mammograms and who had been told that they needed a second opinion. “They had [been diagnosed with] cancer, and needed a biopsy to document the cancer,” comments Litt. “And when our experts looked at those women, a very large percentage of them-about 50%-had absolutely nothing wrong with them. They didn’t need a biopsy. And we sent them on their way. We have followed them since then, and they have all been fine?.The problem is, how we define? good quality, and that’s where there is a lack of data, unfortunately. I think the American College of Radiology has made a big step toward [solving that problem] with the accreditation process of imaging centers and those that work in them.”
Litt expresses concern that radiologists are not taking responsibility for overutilization and quality concerns, and their possible consequences. “If we’re honest, we radiologists need to be the ones to say that there is overutilization in our field,” he says. “We’re not causing it necessarily, but it exists. And there are some quality issues as well, and they exist. I think that the obligation, then, is on us as radiologists to pursue improvements in these issues, and not just to let them go. Because we don’t want to get in a situation where someone else is going to pursue it. New York Medical Imaging was formed by a group of radiologists who got together and said, ‘We have to monitor radiology, we have to contract with insurance companies, we have to take the responsibility.’ Because if we don’t take it, then someone else is going to take it for us. And then we will be in a subservient or secondary role.”
Quo Vadis? What the Trends Tell
There is no doubt that the Cigna HealthCare incident brought a lot of attention to the UM field. But rather than being a bellwether on radiology UM, the evidence points to the incident as actually being a “snapshot” of an evolving management movement. One of the lessons learned in Connecticut is that physicians still can influence UM policies, especially when they are perceived as being unfair or too limiting.
With the spread of improved technology, and with the rise in image usage, the management of utilizing radiology will become? an even greater necessity as the Medicare-aged population of the United States continues to grow. But difficult choices, which are now being avoided in the interests of market share, may well rear their heads again.
“It is a real dilemma,” notes Ryan. “We have this health care system in America, and there’s only a certain amount of resources that society can allocate for it. Besides that, we’ve got demand for health care services that is far outstripping the availability of the financial resources that it is going to take to pay for that demand. So how can one reasonably and appropriately impact the gap that exists between demand and available resources?”
Peter Pesavento is associate editor of Decisions in Axis Imaging News.