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Blue Cross Reignites Prior-Authorization Battle

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The Blue Cross and Blue Shield Association (BCBSA) this week suggested that Medicare require prior authorization of “potentially harmful and costly technologies with a high risk of overuse or misuse, such as advanced imaging services.”

Says a BCBSA report titled “Building Tomorrow’s Healthcare System”:

Private Radiology Benefit Managers have demonstrated success in the private sector and could make a substantial impact in public healthcare programs as well.

Not surprisingly, the Medical Imaging & Technology Alliance (MITA), a trade group of imaging equipment manufacturers, thinks the whole idea is terrible. In a statement, MITA Executive Director David Fisher said:

A proposal by an association of the health insurance industry to put medical decisions in the hands of the health insurance industry is simply a means to reduce access to medical imaging. Medical decisions should remain in the hands of physicians and their patients, rather than the insurance industry.

Pretty clear battle lines. And not new ones.

The BCBSA report points to Wellmark Blue Cross and Blue Shield, which operates in Iowa and South Dakota. It said Wellmark’s use of a radiology benefit management company “to ensure appropriate outpatient diagnostic imaging utilization” has consistently brought an annual return of at least 3 to 1.

On the other hand, MITA points to a physician survey in which 63 percent of the respondents said prior authorization delayed necessary medical procedures. And MITA said no peer-reviewed health economic research shows that prior authorization actually produces Medicare savings.

(A study in the June 2011 issue of the Journal of the American College of Radiology found that radiology benefit managers shift significant costs to physicians and that they sometimes actually increase costs.)

Blue Cross Blue Shield of Delaware (BCBSD) got in trouble last year when a claims administrator that it hired, MedSolutions of Franklin, Tennessee, denied 24 percent of requests to pay for nuclear cardiac stress tests.

The state insurance commissioner found that a provision in the contract with MedSolutions violated state law. Last month, she fined BCBSD $325,000, and the company agreed to drop prior authorization and instead use an American College of Cardiology computer program that determines whether imaging is appropriate based on a patient’s symptoms and medical history.

So which side will prevail in the prior-authorization battle? Given the budget-cutting fervor that grips Washington these days, radiologists would be right to feel nervous.

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