Health plans are under increasing pressure to contain costs while delivering high-quality care. As they look for opportunities to increase efficiency, they would be wise to consider management of routine radiology claims.
While advanced imaging modalities like CT, MRI and PET are often subject to prior authorization (PA), routine radiology, including X-ray, ultrasound and non-cardiac nuclear medicine, generally are not. Because it’s more common and costs less per unit, routine tests are approved with little or no checking by plans as to whether they are consistent with or following best practice guidelines. This oversight presents both a challenge and an opportunity for plans.
Wasteful utilization
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The U.S. spends about $100 billion annually on medical imaging, and studies suggest that 30% of this spend might be unnecessary. That is a needless financial drain on an overburdened healthcare system. In addition, unnecessary imaging exposes patients to avoidable radiation risks and unnecessary medical interventions.
In 2022, a review of claims from a commercial health plan with 700,000 members revealed that about $389 was spent per member per month (PMPM) on medical imaging. Of this, about $137 — or 35% — went to routine radiology. While these services are lower in cost per unit than advanced imaging, their high volume makes them a significant expenditure. Analysis showed that approximately 8% of routine radiology claims were inconsistent with established care standards. Some frequent instances of wasteful practices include:
1. Preoperative chest X-rays in healthy patients – Guidelines discourage routine chest x-rays before surgery for asymptomatic, healthy patients. Despite this standard of care, these procedures are often ordered reflexively. In the dataset, just over 8% of claims for chest x-rays were inconsistent with these guidelines, offering a clear opportunity to reduce unnecessary radiation and costs.
2. Duplicate or redundant exams – Clinicians may order both complete and limited exams of the same area — for example, abdominal ultrasounds or extremity imaging — when the more complete exam encompasses the limited. In the sample data, about 7% of abdominal sonograms were duplicative or unnecessary.
3. Overuse of bone age studies – This test, used to assess skeletal maturity, should be reserved for specific pediatric indications and performed no more than once annually. However, in 14% of reviewed cases, it was overused or used without clear indication.
The solution: automated, policy-based claims management
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Managing routine radiology does not require the administrative burden of prior authorization. Instead, health plans can implement post-service, pre-payment automated management based on clinical guidelines. Here’s how:
- Automated rule application – Claims are evaluated in real-time against a set of routine radiology policies aligned with national standards and plan-specific preferences.
- No delay to care – Unlike PA, this model does not delay patient care and does not hold members liable to pay for unneeded exams.
- Improved provider behavior – Denials are coded as provider liability, encouraging guideline adherence through feedback rather than disruption.
Benefits of routine radiology management
By helping to ensure that the right patients receive the right diagnostic at the right time, routine radiology management can improve their outcomes. Patients also will benefit from reduced exposure to radiation caused by unnecessary imaging and any risks posed by resulting downstream care. Fewer tests also mean fewer false positive results which can lead to unnecessary care and higher costs. Members also will not have to pay out-of-pocket costs for inappropriate care.
The automated management model also provides claim decisions, reporting and education to providers who will be more likely to adhere to policy guidelines when ordering routine imaging.
Plans will benefit by promoting high-quality, cost-effective care with an estimated savings up to $1 PMPM. In addition, the combined effect of these benefits will support healthcare’s transition to value-based care.
Why routine radiology management is a good idea
As pressures mount on plans to control spending and members’ out-of-pocket expenses, while simultaneously improving care, it makes sense for them to re-examine areas that previously had gone unmanaged.
Given the volume of testing and the high incidence of non-adherence to plan policies, routine radiology is one of those areas. An automated, evidence-based approach is a simple and necessary step toward controlling costs and improving care.
Photo: Egor Kulinich, Getty Images
Jim Koger, Vice President, Avalon Healthcare Solutions, is an experienced healthcare product manager dedicated to enhancing access to affordable care through the development of innovative specialty benefit management solutions. He emphasizes the importance of advancing routine diagnostics within the realms of laboratory testing and radiology.
Mark Hiatt, MD, MBA, MS, a consultant with Avalon Healthcare Solutions, is a Stanford-fellowship-trained radiologist with a career spanning leadership roles in a radiology department, health system, radiology benefit management firm, health plan, and radiology accreditation body. He has developed programs to ensure the appropriateness, quality, and cost-effectiveness of medical imaging and advises companies on optimizing clinical validation and market access strategies. He champions evidence-based imaging management to support quality and sustainability.
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