The Medicare program could save $11.6 billion to $18 billion in diagnostic imaging costs over the next 10 years by implementing a radiology benefit management program, according to a new report.
According to an analysis by Nashville, Tenn-based MedSolutions, Medicare could reap financial benefits by using RBM. Currently, 90 percent of commercial health plans use RBM programs.
The MedSolutions report suggests potential savings associated with RBMs are much greater than projected earlier this year in President Barack Obama’s 2010 budget proposal. The president’s budget estimates a savings of $260 million over a 10-year period.
"According to the American Journal of Radiology, up to 36 percent of imaging tests may be medically unnecessary," said Curt Thorne, president and CEO of MedSolutions. "RBMs use evidence-based guidelines to help ensure that patients get the right test first. As a result, we prevent wasteful – and potentially harmful – overutilization that translates to billions in unnecessary expenditures."
Thorne said increased focus on imaging is important because Medicare spending on diagnostic imaging has been growing at an "alarming rate." A June 2008 Government Accountability Office report revealed Medicare spending on all imaging services from 2000 to 2006 had more than doubled, topping $14 billion annually.
During that same period, the cost of advanced imaging services such as CT, MRI and PET scans grew at an even faster rate – 17 percent annually.
According to the MedSolutions analysis, the use of RBMs could reduce Medicare spending on advanced imaging services by an estimated $470 million to $720 million in the first year alone. Ten-year savings estimates range from $11.6 billion to more than $18 billion.
The report uses data from commercial payers who implemented MedSolutions' RBM services to project potential Medicare savings.
Thorne said the savings outlined in the report were calculated using the methodology typically used by the Congressional Budget Office and Office of Management and Budget. For example, the estimates take into consideration the cost of implementing the program, premium offsets and the deduction of beneficiary co-payments.
The report also considers potential differences between the program's implementation in Medicare and commercial settings and considers the possibility of a reduced growth rate of Medicare spending on advanced imaging services.
"Management of high-tech imaging is clearly an area where Medicare can improve its business practices,” said Thorne. “In fact, the original Social Security legislation authorizing the Medicare Program called for Medicare to emulate the private insurance practices of the day."
MedSolutions specializes in cost management of medical services for commercial, Medicare and Medicaid payers.