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MedPAC Proposes Prior-Authorization Program

MedPAC released its highly anticipated proposal calling for a reduction in the use of imaging services, including MRIs, CT scans and nuclear medicine, and, in particular, recommended pre-authorization for medical imaging services as a means to accomplish this objective. The MedPAC report focuses, in particular, on physicians who order an inordinately high volume of imaging tests, concluding that Medicare’s costs for such tests are surging partially because physicians increasingly are purchasing their own high-tech equipment and providing such services to their own groups. When physicians can perform diagnostic tests in their own offices, they are able to capture the revenue stream from such testing services. While MedPAC acknowledged that having equipment in close proximity permits physicians to diagnose and treat patients with greater speed and precision, it argues that these physicians have a substantially greater penchant to order a greater amount of such services than those who send patients to unrelated facilities.

The proposed prior-authorization program would require CMS to compare physicians’ use of imaging services to identify “outliers” whose use exceeds evidence-based clinical guidelines. The “outlier” physicians would be notified by CMS. If such physicians’ imaging use does not decline following such notification, Medicare would require those clinicians to obtain prior-authorization from either CMS or a contractor. Alternatively, MedPAC supported the use of “clinical-decision support systems,” or programs that suggest course treatments based on each patient’s data, as long as the system used CMS guidelines and transmitted data to federal administrators.

MedPAC’s proposal for prior-authorization continues to be met with strong opposition by physicians and politicians who argue that prior authorization will delay necessary medical care and would have an inappreciable effect on Medicare expenditures. HLP will continue to update our Blog on MedPAC’s proposal, as Congress begins to assess the merits of prior authorization for imaging services.

For more information on government regulation of imaging services or for professional assistance navigating the ever-evolving healthcare landscape, please contact Carey F. Kalmowitz, Esq. or Adrienne Dresevic, Esq. at (248) 996-8510 or (212) 734-0128, or visit the HLP website.

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