JACR: Scant evidence, hidden costs hinder RBM effectiveness
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RBMs have become a widespread mechanism by which payors purport to reduce healthcare costs and cut unnecessary imaging, with the agencies employing evidence- and expert-based criteria for authorizing or denying provider requests for studies. Moreover, the combined public policy priorities of healthcare reform and Medicare savings have helped RBMs gain traction with policymakers, as RBMs play a role in President Obama’s 2010 budget proposal, noted David W. Lee, PhD, from GE Healthcare in Wauwatosa, Wis., and co-authors.
Despite the fact that the six largest RBMs cover an estimated 88 million privately insured Americans, Lee and colleagues argued that little is known about RBMs' cost-effectiveness and impact on patient care.
Medicare has taken steps toward implementing RBM-modeled pre-authorization structures. For its part, the U.S. Department of Health and Human Services has stated that there exists “no independent data—other than self-reported—on the success of the RBMs in managing imaging services.”
“With the potential expansion of RBMs to a larger portion of the population, it is important to view the impact of the RBM from a societal perspective, rather than that of the private insurance industry alone,” Lee and colleagues argued. The authors exclusively assessed the direct costs of RBMs on providers and payors.
With variation between different RBMs’ procedures, fees and denial rates, Lee and colleagues used published data and the Medical College of Georgia’s experience with an RBM to model the effects of a typical agency on a 100,000-member health plan. The authors assumed an annual advanced imaging utilization rate of between 90 and 180 exams per 1,000 insured members in their simulations and an average 12.5 percent reduction in utilization. Based on the Medicare Physician Fee Schedule, the average cost of an exam was considered to be $380 and the price of the RBM $0.38 per member per month.
These parameters were designed to make RBMs cost-neutral for care. In doing so, the authors found that an RBM was estimated to save approximately $640,000; 80 percent of which would go to payors and 20 percent to patients. However, these savings would be offset by fees to the RBM and by $182,066 in costs to physicians for complying with RBM procedures, waiting on the phone and launching appeals.
Across all varying denial rates and RBM fees, 55 percent of simulations predicted that RBMs increased costs. In addition, 95 percent of simulations predicted between $397,880 in savings and $341,991 in extra costs generated by RBMs. These estimates arose from reductions in utilization between 5 and 15 percent. As expected, savings were greater as the RBM was projected to lower utilization by higher levels.
“Our analysis demonstrated that RBMs have the potential to either increase or decrease societal costs under a range of plausible assumptions about the parameters that govern their economic impact,” Lee and colleagues wrote. “This cost shifting creates scenarios in which RBMs are cost saving from the perspective of a health plan but actually increase costs to the healthcare system overall.”
The authors estimated that when scaled up to the 88 million individuals whose care is currently affected by RBMs, providers incur approximately $160 million in additional costs from RBMs. They noted that this figure would increase exponentially as the number of RBMs grows, given the increasing time and resources required to navigate among multiple RBMs’ procedures.
Based on their findings, the authors questioned policymakers’ estimations that RBMs could contribute to Medicare savings. “It is telling…that none of these pro-RBM recommendations considered the broader, system-wide perspective,” Lee and colleagues stated.
“[T]here is little doubt that formal technology review groups such as the U.S. Preventive Services Task Force and the Medicare Evidence Development and Coverage Advisory Committee would conclude that the level of available information is ‘insufficient’ to warrant recommending RBMs for widespread use.”
Lee and co-authors added that their estimates neglected indirect costs associated with RBMs, including patient self-payments (at higher rates) for denials and the progression of undiagnosed diseases resulting from RBM denials. Moreover, they said their estimates were based on conservative RBM data in relevant literature.
According to the authors, providers can minimize the costs of RBMs by increasing the appropriateness of physician orders for imaging. Alternatively, they suggested that clinical decision support has been shown to effectively reduce utilization.
Acknowledging the variability of their estimates due to the unavailability of data, the authors concluded that their estimate offered an important contribution to the healthcare debate among payors and policymakers. Specifically, they detailed the “previously hidden costs of RBMs.”
In response to the study, the Medical Imaging & Technology Alliance stated, "Relying on RBMs to conduct prior authorization for advanced imaging increases costs, the burden on physicians and red tape, and can also cause delays in treatment. In light of the ongoing threats to patient access, policymakers should not add barriers to care for patients who are in need of medical imaging services. Physicians should be equipped with tools, such as physician-developed appropriateness criteria, to guide them in making optimal medical decisions for their patients."