Newsletter Sign-up

By DON DUFORD, president and chief operating officer of One Call Medical

If you've ever watched the TV medical drama, "House," you know that a myriad of diagnostic tests exists. When these tests are wielded by a diagnostic--and fictional--genius like Dr. House, they can be used to pinpoint even the most obscure medical condition.

The healthcare industry is filled with alarming statistics, but the reason payers and patients must take heed is simple. Diagnosis is the critical first step to ensure patients receive appropriate medical care, and many things can go wrong on the path from diagnosis to treatment and recovery.

Complications can easily occur, such as use of unqualified diagnosticians, existence of comorbidities, and inappropriately performed tests that can lead to misdiagnosis and inappropriate treatment, such as surgery.

Such diagnostic disasters can put a payer "on the hook" for millions of dollars in medical, liability, and disability costs. Just as managed approaches have helped to control the costs of prescription drugs and hospital services, payers can avoid medical missteps and control related expenses using a sound diagnostic management approach.

The value of diagnostic testing is clear. When accurate test results are received early in the life of a medical claim, payers can reduce the likelihood that seemingly simple claims will become chronic, long-term, and expensive--whether they're in group health, workers' compensation, or liability.

Two areas of diagnostics have recently received a lot of attention. The first is diagnostic radiology. Magnetic resonance imaging (MRI), computed tomography (CT), and positron emission tomography (PET) scans enable physicians to detect, diagnose, and treat medical conditions much sooner and with increased accuracy.

With a 20 percent annual growth rate, however, diagnostic radiology is now the fastest rising medical expense, increasing at twice the rate of prescription drugs and faster than overall healthcare spending, which is growing at 10 percent each year. According to a report by the Association of Health Insurance Plans, almost $100 billion a year is spent on imaging in the United States, and these costs are expected to double in four years.

The second area of concern is electrodiagnostics, which include electromyography (EMG) and nerve condition studies (NCS). When a neurologic injury has been sustained--causing symptoms of pain, numbness, tingling, burning, or weakness--EMG and NCS can provide the diagnostic roadmap to locate and evaluate the type and severity of the injury.

Payers who order EMG and NCS may assume test results are accurate. However, there are multiple, variables that affect the accuracy of these tests, including proper temperature, appropriate timing for the examination, and many other parameters. As a result, payers must ensure they're using quality providers to ensure accurate results.

It's difficult for payers to distinguish and ensure they're utilizing the best diagnosticians. Quality begins and ends with a pre-screening process to verify providers meet and continue to follow certain quality guidelines, as well as to verify the quality of the tests they perform. Some networks say they evaluate provider qualifications, but in truth, they do little more than process a signed request to join their network. Payers must realize that different providers have a different impact on cost and quality.

RADIOLOGY PROVIDERS OFFER OPTIONS

For example with diagnostic radiology, patients have the option to utilize three different sites of service:

-- Hospitals. Upward of 80 percent of imaging exams are performed in an outpatient hospital setting. These services are generally high in quality, but also very expensive, charging the highest per-scan cost of any other imaging facility.

-- Physician offices. More physician offices are acquiring imaging equipment. However, recent studies suggest that these offices have less specialized expertise in imaging procedures. The U.S. General Accountability Office recently documented a dramatic increase in the number of physician offices that "self-refer" patients for imaging services performed on scanners they own or profit from. These self-referring physician offices use imaging services as much as 3.2 times more than physicians who refer patients to independent radiologists. In other words, they may order tests for financial gain rather than medical necessity, which leads to excessive utilization and costs.

-- Freestanding imaging centers. Today, there are thousands of freestanding imaging centers across the country. The challenge is in identifying the facilities that consistently perform quality tests, provide prompt service, and deliver accurate test interpretations--all at a reasonable price.

In the field of electrodiagnostics, there is essentially no barrier to entry. As a result, outcomes can vary widely from physician to physician, and some deliver poor test results. The most compelling way to examine the quality challenge that exists is to look at an actual example:

-- EMG #1: A patient allegedly sustained a back injury at work during a fall. The provider who performed the first EMG test did not undergo a prequalification process to confirm his credentials or the quality of tests. His results showed that the patient required back surgery, which was performed but did not alleviate the patient's pain. Instead, the back surgery actually made the condition worse.

-- EMG #2: Since the patient still experienced significant pain, a second EMG was performed after the surgery. The second provider was pre-qualified in terms of his credentials and the quality of his medical reports. His test revealed that the patient actually had a diabetes-related condition, which was causing the pain and which would not have been compensable under workers' compensation.

Due to the initial inaccurate test result and the inappropriate surgery, the worker is now on permanent disability with a claim projected to cost more than $2.5 million. Since the insurer authorized the back surgery, it was liable for the full costs of the claim.

Up until this point, payers and patients have relied solely on traditional provider networks to access diagnostic providers and control medical claim costs, but today this specific and costly area of medicine requires more specialized management strategies:

Utilization management attempts to control medical costs by ensuring tests are appropriate. Patients and physicians must obtain a pre-authorization for high-cost diagnostic procedures. Many physicians worry that utilization management will drive up administrative costs, delay diagnosis and patient care, and disrupt the physician-patient relationship as a third party must intervene to either approve or deny the need for a diagnostic service. In addition, the appeals process on denied services can be long and complicated, further delaying patient care.

Use of specialty networks is a lesser known, but growing management strategy. Specialty networks have established close partnerships with diagnostic providers, so they can offer significant savings per exam. These networks also use several methods to ensure the use of quality providers. For example, providers must adhere to national quality guidelines established by associations like the American College of Radiology (ACR) or the American Association of Neuromuscular & Electrodiagnostic Medicine (AANEM).

This ensures that the providers who are supervising and interpreting diagnostic tests have met stringent educational and training standards. For imaging centers that are not ACR accredited, the network may require a sample film review, and with electrodiagnostic providers, a sample review of EMG and NCS reports ensures adherence to proper report standards.

Patients pay more out-of-pocket costs for their medical services. As a result, they want to know how to access the best providers at the lowest possible cost. Some payers offer patient advocacy hotlines and appointment scheduling services that inform patients of the quality, cost-effective providers in their local areas. These centers enhance patient service and satisfaction by facilitating same-day scheduling of exams, an open dialogue between diagnostic provider and patient.

Each diagnostic test represents an opportunity to save money, improve quality and further patient advocacy. Overpayment for tests and inefficiencies in the referral process--what the industry generally refers to as "leakage"--is a significant problem that has lead to millions of dollars of waste. Many payers don't realize a leakage problem exists; on average, 67 percent of referrals are unmanaged and result in less-than-optimal results.

A core part of diagnostic management involves advanced analytics, which help payers become more aware of their total diagnostic spending and understand where leaks commonly occur. After the analysis is performed, leakage-capture strategies can be applied--such as training, ease-of-use tools, and workflow enhancements--to help payers shift to a more managed approach.

In "House," master diagnostician Gregory House orders a plethora of exams in just one episode. Of course, he's pushing the boundaries of medical practice as he diagnoses rare maladies. In the real world, key diagnostic tests--particularly advanced radiology and electrodiagnostics--have come to the forefront as two areas where payers can immediately and substantially impact costs and outcomes.

Using leading diagnostic management strategies, payers can have access to highly qualified providers. In turn, these best-in-class diagnosticians deliver accurate tests results, which lead to an appropriate diagnosis, effective treatment, and quality care for patients.

December 1, 2010

Copyright 2010© LRP Publications