Two-thirds of diagnostic radiology referrals go 'unmanaged'

A typical workers' compensation payer may have as much as two-thirds of its diagnostic radiology referrals go "unmanaged," according to recent data, which may lead to overpayments, inefficiencies, and quality issues in the diagnostic referral, scheduling and results process.

According to the findings from One Call Medical, a provider of diagnostic testing and specialty services, diagnostic radiology referrals are considered "unmanaged" if they are not routed through a diagnostic specialty network designed to optimize advanced radiology savings, referral efficiency, and the quality of providers. Don Duford, president and COO at the firm, said unmanaged referrals not only result in higher diagnostic costs but also drive up administrative, medical and indemnity expenses. For example, unmanaged referrals take more time for adjusters and nurse case managers to coordinate, and they may lead to inconclusive test results, which delay patient treatment, recovery, and return to work.

"With diagnostic radiology costs escalating, payers must 'manage' all aspects of the referral process," he said. "Most payers don't realize these problems exist. Since they route tests through traditional PPOs, they assume referrals are being adequately managed. However, since these networks don't specialize in diagnostic radiology, they only offer nominal discounts. They don't credential providers, and they don't actively manage the diagnostic referral, claims, or billing process."

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Pamela Landefeld, vice president of planning and strategy and radiology product manager at OCM, said overpayments, waste and inefficiencies are commonly referred to as "leakage" in the workers' comp claims process.

"Unmanaged diagnostic referrals now represent a significant leakage problem that leads to millions of dollars in unnecessary costs," she said.

To address the problem, OCM developed the diagnostic management program to ensure payers channel a greater number of scans to quality providers with optimal savings. Many program participants, the company said, experience a dramatic shift from "unmanaged" referral activity which enables them to reduce their total universe of diagnostic radiology spending by 20 percent and increase medical savings through improved outcomes.

Read more at the WorkersComp Forum homepage.

September 30, 2010

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