RBM firm RadMetrics goes beyond preauthorization

By Kate Madden Yee, AuntMinnie.com staff writer

April 21, 2009 -- A Michigan start-up firm is putting a new twist on radiology benefits management (RBM) by reviewing claims for imaging services that have already been paid -- and, in some cases, requesting repayment if it seems the imaging studies were ordered inappropriately.

RadMetrics was launched with the goal of giving payors another tool besides preauthorization for cutting imaging overutilization. Preauthorization is already commonplace at RBMs, and the U.S. government is considering suggestions to implement preauthorization in the Medicare and Medicaid programs.

But preauthorization isn't a silver bullet, according to Kimberly Hornik, healthcare attorney and chief compliance officer of RadMetrics, a Bingham Farms, MI-based RBM established in September 2008. For one thing, preauthorization doesn't address quality or compliance issues.

"Imaging is complex, and the tool of preauthorization, standing alone, is not the answer," Hornik said. "Preauthorization must be used as part of a comprehensive, multifaceted approach to reduce unnecessary spending and improve the quality of necessary imaging."

A new weapon against overutilization?

One of the tools RadMetrics is using in this comprehensive approach is retrospective postpayment reviews -- with providers asked to repay reimbursement they've received for studies that are deemed to be inappropriate.

“Imaging is complex, and the tool of pre-authorization, standing alone, is not the answer.”

"Retrospective postpayment review is a new tool in the area of radiology, although it's been around in the outpatient setting in other areas for a while," Hornik said. "What makes it unique for assessing overutilization in medical imaging is that you can actually look at the images and the supporting documents and see what the insurer paid for. You can't do that with, say, a surgical procedure."

To demonstrate the effectiveness of its approach, RadMetrics, on behalf of a large insurance company in southeast Michigan, reviewed more than 3,794 imaging procedures performed between July 1, 2007, and June 31, 2008, by 100 radiology service providers (RSPs) on the insurer's logs, according to Hornik.

The RSPs included internal medicine, general and family practitioners, radiologists, podiatrists, cardiologists, oncologists, neurologists, and imaging centers. The company's audit team consisted of radiologists and cardiologists, medical physicists, technologists, healthcare attorneys, compliance professionals, and billing and coding experts. Imaging services audited were x-ray, ultrasound, nuclear medicine, CT, and MRI.

The imaging procedures RadMetrics audited represented $2.6 million of paid outpatient diagnostic radiology services, and the audit revealed that $826,181, or 31%, of these billed services had quality or utilization problems (a 21% error rate of improper payments and a 10% error rate based on national or industry quality standards, according to RadMetrics).

Utilization issues RadMetrics identified in the audit included:

  • Orders not supported: The RSP didn't provide appropriate documentation supporting the referring physician's request for the test.
  • Errors in coding: Claims billed in but services not provided; erroneous claims (i.e., a limited abdominal ultrasound was given, but a complete abdominal ultrasound was billed).
  • Medical necessity unclear: Protocol ordering (patients received battery of nonindicated tests); exams performed without support of clinical documentation; screening tests done for patients who didn't qualify.
  • Incorrect or missing diagnostic reports.

As for quality issues, RadMetrics found:

  • Incorrectly labeled images
  • Poor diagnostic quality of images
  • Poor positioning (i.e., area of interest cut off in the image)
  • Artifacts
  • Incomplete studies

"We came across a provider that was billing nuclear medicine studies under a particular physician's Nuclear Regulatory Commission license, but the doctor had resigned from the facility a year earlier," Hornik said. "We found HIPAA violations with patient records stored in exam rooms. And we found contrast injections that had been done without direct physician oversight, as Medicare requires."

The review's findings suggest that one out of every three dollars of outpatient radiology expenses may be billed in error, according to RadMetrics. And although the insurer did not ask the RSPs that had billed in error to make repayment, some providers decided to pay the money back on their own, according to Hornik.

"Some of the providers that had made errors wrote checks to our client, saying, 'I'm so sorry, it was a mistake,' " Hornik said. "Ninety-nine out of 100 of the providers I've spoken to [that made errors] have said, 'Tell me what I've done wrong so I can do better.' "

The insurer plans to perform another audit of the RSPs that had errors, Hornik said; whether it will request repayment at that time remains unclear.

Harmful effects?

It's true that preauthorization is an imperfect tool for assessing imaging overutilization, and a more sophisticated, comprehensive approach is necessary, according to Dr. Richard Duszak, an interventional radiologist with Mid-South Imaging and Therapeutics, a private practice in Memphis, TN. Duszak also serves as current procedural terminology (CPT) advisor and chair of the Committee on Coding and Nomenclature with the American College of Radiology (ACR) of Reston, VA.

But retrospective review can have harmful effects if it's not subjected to the same clinical methodology review that's given to research published in radiology journals, he believes.

"Without transparency of methodology, I'm skeptical," Duszak said. "Research like this needs to be conducted with a certified coding expert on the audit team, and the authors need to disclose any conflict of interest. Obviously, the payor has a clear incentive: It wants to save money."

The notion of insurers coming back retroactively and requesting paybacks is something medical imaging providers would be loath to see, according to Bob Maier, president and CEO of Brentwood, TN-based Regents Health Resources, a healthcare consulting firm that provides services to hospitals and physician practices.

"I can understand where payors are coming from," he said. "We've all heard the numbers that a third of imaging is unnecessary. But I'd much rather see insurers zero in on specific outliers, physicians that overutilize in their own offices, for example, and focus on educating them."

Physicians have become more and more willing to be involved in a utilization management process so that errors in billing or exam orders do not occur in the first place, Maier said. He believes it's better to develop a decision-support protocol that allows them to make sure they're ordering the best exam and getting the best results for the referring physician.

"Doctors get denials all the time and wind up taking a hit for patient care that they offer in good faith," he said. "To go back after the fact seems very heavy handed."

By Kate Madden Yee
AuntMinnie.com staff writer
April 21, 2009

ACR, RBMA set guidelines for benefits management programs, April 16, 2009

Could decision-support software help radiology fend off RBMs? April 7, 2009

Outpatient imaging: Key trends in a tumultuous healthcare environment, March 30, 2009

Medical imaging hopes to cut losses in Medicare reform debate, January 27, 2009

2009 MPFS proposal: If you're not an IDTF, you'll be one soon, July 10, 2008

Copyright © 2009 AuntMinnie.com

 

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