Medical imaging procedures unravel healthcare mysteries and provide valuable information to patients and providers alike. However, spending on these tests has been increasing rapidly and steadily, attributed largely to their increasing volume and complexity. For Medicaid agencies dealing with particularly tight state budgets, careful scrutiny of medical necessity is becoming increasingly important. Overuse of these procedures can also pose serious health risks, from excessive exposure to radiation to actual injury in the case of magnetic resonance imaging (MRI).
Iowa Medicaid Enterprise (IME), which administers the Medicaid program for Iowa and its Medicaid members, found itself facing these issues in 2010 and set out to investigate potential solutions. IME’s Medical Services contractor, Telligen (formerly IFMC), conducted an analysis of radiology utilization and supporting diagnoses through the Medicaid Value Management program. Initiated by the Medicaid director and developed by Telligen, Medicaid Value Management is a program that studies various aspects of Medicaid coverage and policy and makes data-driven recommendations to improve the quality of care. The conclusion of the radiology-related study was that the state could realize cost savings at the same time it reduced risks for patients with a rigorous preauthorization process. IME’s Medicaid director, Jennifer Vermeer, requested that Telligen put such a program in place for high-cost imaging studies by March 2010.
Within eight months of implementation, the program was making a significant difference by helping Medicaid beneficiaries avoid unnecessary imaging procedures.
Escalating Costs and Patient Risk
As the third largest payer in Iowa, IME pays medical claims to more than 38,000 providers and covers about 400,000 Medicaid members. Iowa Medicaid is the primary coverage provider to a very vulnerable population: children, pregnant women, the disabled, the elderly, and the parents of dependent children. As a state and federally funded organization, administrators face unique pressures to manage costs and provide excellent care.
In 2008, when Vermeer requested the preauthorization program for high-cost imaging procedures, rapidly rising imaging costs, particularly for high-tech tests such MRIs, computed tomography (CT) scans, positron emission tomography (PET) scans and other nuclear medicine imaging, were receiving quite a bit of attention. So was patient safety. Over-utilization of nuclear medicine imaging puts patients at risk of overexposure to the ionizing radiation necessary for these tests, which increases the likelihood of developing cancer over time. Accidents with MRIs were also on the rise; the strong magnetic pull can cause objects to fly across exam rooms, injuring patients and technicians.
A Technology Foundation for Efficiency
Despite the acknowledged need for the preauthorization program and its anticipated benefits, administrators feared that an effective, comprehensive preauthorization process might increase administrative expenses, threatening cost-saving objectives. Technology, therefore, was seen as an essential program component, delivering greater efficiency and consistency at every step.
IME selected McKesson Corp.’s Clear Coverage, a decision-support solution offered in software-as-a-service form. The solution provides a common platform for payers and providers to facilitate communication about the medical necessity of requested services. The solution uses accepted clinical evidence regarding medical necessity, supplied by InterQual Imaging Criteria (also from McKesson), as well as payer coverage rules. This information is delivered to the point of care, before providers order or deliver services. Clear Coverage can also recommend in-network imaging facilities, information that can be given immediately to the patient.
Implementation took three months. In March 2010, it was rolled out to IME’s 1,800 network providers who typically order or deal with advanced imaging services.
Before an Iowa Medicaid provider recommends an imaging study for a patient, the provider enters the request into Clear Coverage and is prompted to answer a few patient-specific questions. From these answers, the system determines what studies are appropriate, which ones require authorization, and then notifies the provider if the service is authorized. Procedures that meet InterQual criteria are automatically approved and require no further action. These results are available to the provider in real time at the point of care. If a procedure cannot be automatically authorized, it is pended and routed for clinical review. If a procedure is denied, the user is informed of the reason for the denial.
A More Proactive Approach
Vermeer explains that IME has met its objectives “to ensure the most appropriate care for members, while reducing the incidence of unnecessary services that waste tax payer dollars and needlessly expose patients to radiation.”
In the first eight months after implementation, nearly 50,000 preauthorization requests were processed. Nearly 40 percent were approved instantly, while 4 percent were denied as medically inappropriate based on the clinical evidence and the potential risk to patients of radiation exposure. In addition, 10 percent of requests were cancelled by the providers based on questions raised during the review process. The remaining 46 percent were approved following the receipt of additional information and clinical review.
IME estimates that it is saving approximately $2.4 million annually with the new program: $1.3 million from the cancellation of non-medically appropriate requests, $600,000 from service denials and $500,000 from the avoidance of additional staff to manage a solely manual process.
With cost savings on the increase and member health at the forefront of decision-making, IME has reconstructed its diagnostic imaging authorization processes and stabilized growth in utilization. Now realizing the advantages to managing advanced imaging more prospectively, administrators like Vermeer “expect even better results” as the program continues to develop and as IME itself expands membership and continues to offer coverage to Iowa’s vulnerable Medicaid population.
Tonya Sickels, R.N., B.A., is director, Medicaid Programs, Telligen, Iowa Medicaid Enterprise (IME), which administers the Medicaid program for Iowa and its Medicaid beneficiaries.
