Study: Advanced Radiology Services in Workers’ Comp Overpaid by 30-40%

March 3, 2009

Today, more than two-thirds of advanced radiology services are performed without the benefit of a specialized network, according to research analysis performed by One Call Medical, a firm that provides diagnostic testing for workers’ compensation.

“Diagnostic radiology costs now represent the fastest growing medical expense, and the fees that programs pay for tests performed outside of specialized diagnostic networks are substantially higher. In addition, programs lose the benefit of prompt scheduling with credentialed providers, which promotes a fast and safe return to work,” said Don Duford, president of One Call Medical. “We estimate that proper management of diagnostic radiology can reduce total medical costs by as much as 1 to 2 percent, and these savings increase over time as health care and fee schedule inflation climb while these costs remain fixed.”

The challenge in achieving these savings is that claims examiners, nurse case managers, and treating physicians often schedule MRIs or CT scans “out of network” or directly with an imaging facility — missing the opportunity to leverage specialized network’s discounts and quality oversight, Duford said. These “out of network” tests lead to higher medical and diagnostic costs, and can often result in a negative impact on patient care. One Call’s research also revealed that accepted state fees or usual-and-customary rates are typically 30 to 40 percent higher on average nationally than the discount rates available through a specialized diagnostic network.

According to a report by the Association of Health Insurance Plans, almost $100 billion a year is spent on imaging in the U.S. and these costs are expected to double in just four years. Diagnostic radiology costs — with its 20 percent growth rate — is the fastest rising area of medical expense, increasing at twice the rate of prescription drugs and faster than overall healthcare spending, which is rising at only 10 percent each year.

“Diagnostic radiology is really the new frontier for payers to manage,” noted Duford. “Unfortunately, most payers are unaware of how much they currently spend on these services, or how to change processes to capture optimal savings and ensure use of quality providers.”

Source: One Call Medical,

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