Brain scans and high-tech body screenings that North Carolina Medicaid patients need will first have to be cleared by a private management company under a program that is slated to begin Nov. 1.
The new system is supposed to save state taxpayers tens of millions of dollars on unnecessary CT scans, MRIs and ultrasounds.
A private company, Med Solutions, will manage most of the state Medicaid program's diagnostic imaging services for $230 million over two years, according to contract negotiations. Mammography is not included. The contract still has to be signed, but state officials said this week that it was essentially a done deal.
"We want to provide the highest possible quality medical care that we can, while at the same time be good stewards of taxpayer resources," said Brad Deen, a spokesman for the state Division of Medical Services, which manages Medicaid. "We think we have a way here to reduce costs."
The effort has been applauded by some health-care economists as a timely move in the down economy and amid a national debate over rising health-care expenditures. But it has also raised concerns that people who need scans may be denied.
"What they're being asked to do is make sure people are only getting what is needed and what's medically appropriate," said Sandra Greene, a director of health-care economics and finance at the Cecil G. Sheps Center for Health Services Research at UNC-Chapel Hill.
"When you look at what's driving health-care costs over a number of years, one of the areas is imaging," Greene said.
Reaping profits
Some estimates put imaging costs nationally at $100 billion and rising. The diagnostic tools have become profit centers for some doctors' offices, stand-alone clinics and hospitals.
North Carolina's Medicaid program, which serves 1.5 million people and is enlisting more patients as the economy continues to falter, was projected to spend $135 million next year on radiological scans, and $149 million in 2011. Under the agreement being negotiated with MedSolutions, the state will instead pay the company $230 million over that period.
MedSolutions, a Tennessee company that has contracts with five other states, will earn profits by keeping the costs of scans under the state's contracted payment. As a result, the company will have an incentive to deny requests, but it advertises that its cost savings are achieved by curbing waste and abuse. Many privately insured patients already must secure approval before they can get the diagnostics.
Officials with MedSolutions declined to comment until after the North Carolina contract has been signed.
The state Department of Health and Human Services was authorized by legislators to pursue the contract without seeking competitive bids. That decision resulted from a sense of urgency to start the new program quickly and begin reaping savings. Legislators mandated that the state save at least $8 million a year on scans.
Radiologists worry
But the program is not popular among the state's radiologists, who conduct and read the scans that other doctors order. They worry that MedSolutions will deny needed scans, including repeat images that are necessary when the initial tests are not adequately done.
Dr. Valerie Jewells, a radiologist at UNC-Chapel Hill and president-elect of the N.C. Radiological Society, said the state has targeted radiology when the issue may be broader.
Radiologists have the specialty training that the high-tech machines often require, Jewells said, including the knowledge to order the correct tests and the right devices, and to read the images that come back.
Sometimes, she says, doctors fail to request the correct scans for a patient's symptoms. A CT scan of the head, for example, may be warranted to explore the source of a patient's headaches, but a better picture might include the neck in case cancer has invaded lymph nodes.
If a doctor doesn't order the right test the first time, Jewell said, a repeat test may be needed. She said such cases could be turned down by the prior-approval process.
"This is going to cause a lot of frustration for practitioners," Jewells said. "There are going to be patients who don't get studies who need them."
Jewells said the state radiology group is now working to draft guidelines to help doctors know what scans are needed, how they should be done, and when additional screenings may be warranted. She says she hopes those guidelines will be used to help doctors as they navigate the new approval process for Medicaid.
