There's a new managed care cop in town. Known as RadMD, this gun rides the Internet, authorizing "appropriate" imaging exams and shooting down the rest on behalf of insurers. Web-based prior consults can cut imaging costs by a third, RadMD says, without compromising care. But whether referring doctors will embrace them or run for the hills remains to be seen.
RadMD is the West Coast Web venture of Hackensack, NJ-based National Imaging Associates, a firm that provides radiology managed care services to 16 large insurers -- mostly HMOs and PPOs -- representing more than 4.5 million covered lives.
These insurers outsource their radiology management to NIA, which provides privileging, prior authorization, and utilization-profiling services for diagnostic imaging. NIA operates high-volume call centers in Rancho Cordova and San Bruno, CA, to authorize imaging procedures for member physicians. These centers use the same basic RadMD portal the company now markets to payors for use by individual member doctors.
NIA created RadMD last year, announcing a technology partnership with database software firm Sybase of Emeryville, CA, in September. Sybase used its Enterprise Portal 1.0 technology to build a Web portal that uses RadMD's extensive clinical database to determine the appropriateness of imaging procedures, said Robert Lagalia, NIA's vice president of e-business.
"We've leveraged Internet technology to complement the (San Bruno) call center, which does about 70,000 clinical consultations with referring physicians' offices every month. We built a virtual call center," he said. "As a nurse or physician who needs to engage in these transactions with managed care or other insurance carriers, you have the option of picking up the phone and going through a very efficient call-center process, and if you go through the Web you can do it 24/7."
Now in rollout phase, RadMD has completed beta testing of the portal, and currently operates the full version for just one client, an IPA (independent practice association) in Connecticut. RadMD says the client is seeing savings roughly equal to those achieved with the call center.
RadMD markets the portal to existing call-center clients and outside payors. It can also be hired to integrate its clinical logic database with payors' own systems, or perform retrospective utilization reviews based on payor data.
Web-based preauthorization
Whether the request arrives through the call center or through the RadMD portal, authorization for an imaging procedure requires the user to answer a series of clinical questions to obtain an authorization number.
"They gain that number by going through what is kind of my piece of the puzzle, called clinical logic," said Dr. Thomas Dehn, a radiologist and president of RadMD. "There are really two things that have to come together: the business logic -- is the enrollee eligible, is this particular benefit covered under this particular plan -- and then who are the eligible providers?"
That information is "baked" into each client's customized version of the system in order to minimize the data that needs to be entered each time, Dehn said. So the user types in the patient's name and some demographic information, then moves onto the clinical part of the authorization process.
"After the member information is entered and the requested study is entered, they're then presented with a series of clinical algorithms that branch conditionally based on their responses," Dehn said. "Take, for example, an MRI of the knee for a suspected knee infection. You just point and click your way through the algorithms, so your response to one triggers the next branch. And the final step is one in which we validate that the preferred provider in your profile for that MRI service meets the requirements of the managed care organization."
RadMD's proprietary algorithms are based on medical literature, according to Dehn, and on five years of practical experience gained at the company's San Bruno call center. That experience has enabled the team to craft an approval process that is reasonable, practical, and easy to use, Dehn said. It even accounts for the type of physician ordering the exam.
Different strokes
"If a request for a lumbar MRI comes in, and the request is from a neurosurgeon, you'll go down a different branch than if the request comes in from a primary care physician," Dehn said. "And frankly that's not based on literature.... The reality is that at the end of the day, it's highly unlikely you would end up denying a neurosurgeon a request for an MRI."
"On the other hand, there's somewhat more confusion when non-neuroscientists order these examinations, so the algorithm then branches into more detail in terms of gathering clinical information. We have a way that says yes, if you're a primary care physician you can certainly order a lumbar MRI, but you should know what you're doing when you order it."
Almost instantly after the user clicks the "submit" button, the exam is either approved or passed for clinical review. In case of the latter, the user can either send a message to the call center resulting in an immediate callback, or engage in a secure online chat with a radiologist or other physician on staff at the call center, Dehn said, adding that doctors who have worked with the system so far have been very enthusiastic about it.
At the same time, Dehn says the biggest potential problem with the system is one he hasn't run into yet. That is, even though it takes primary care doctors a little time to become comfortable with RadMD, market dynamics dictate that most of them won't end up using it more than two or three times a month. So whether primary care doctors will find the benefits worth the training time is unknown. And physicians as a group have been reluctant to use the Internet, he said.
What radiologists can expect
From the radiologist's viewpoint, however, Dehn believes RadMD's advantages are unequivocal. First, RadMD sends the authorization information to both radiologists and payors instantly, without the normal administrative delay that occurs while everyone waits for the referring physician's staff to enter the information. That means that once radiologists submit a claim, they're paid quickly, he said.
Second, RadMD sends the radiologist the entire clinical rationale behind the study, which helps explain why it was ordered in the first place. The information could be helpful for interpreting the image, he said.
RadMD's clinical logic algorithms are based on "normal medicine," and aren't punitive by any means, he added. Properly applied, they've been able to cut utilization by about a third.
"Right now we're running a little north of 30% of procedures that are considered to be either 'inappropriate' or 'noncontributory.' And I think it's important to make a distinction. Examinations that don't have to be done aren't necessarily wrong, but they may not be contributory. And if they're not contributing to the diagnosis or the ultimate outcome, they can be eliminated" without compromising care, he said.
But wouldn't the savings come right out of radiologists' pockets?
"On behalf of insurance carriers we've been able to show dramatic impact and measurable improvements in quality, and measurable diminution in the inappropriate use of (exams)," Dehn said. "However, that diminution has been spread over such a large community that it's had little or no impact on the income stream of the radiologist. The examinations we're managing to remove are either inappropriate in many cases, or supplanted by alternative studies that are better. For example, there are relatively few indications now for CT of the head. Maybe an acute clunk on the head."
Imaging costs still rising
One way or the other, payors are realizing they need to control imaging costs, Dehn said. RadMD estimates that diagnostic imaging represents a $75 billion sector of the healthcare industry, or roughly 10% of a payor's total medical spending. More to the point, information from NIA's 70-million-encounter database and potential clients shows that imaging costs rose nearly 20% between 1999 and 2000.
"Our business is growing much more rapidly than before," Dehn said. "When we started the company five or six years ago, there were really two sales. One, we had to convince the health plan that they had a problem with utilization in radiology, and the second sale is that we're the solution. Now the first sale is done. Virtually every large health plan is experiencing double-digit inflation in radiology. Now we just have to convince them we're the right people."
As for competition, a couple of large carriers are taking the clinical logic approach -- but none specifically for imaging, and none as well as RadMD, he said. Other applications he's seen were time-consuming and inappropriate for radiology.
"The fact of the matter is that most radiology is transactional, and I don't need to know your life history in order to evaluate whether a procedure is appropriate or inappropriate," Dehn said. "Our algorithms are fairly simple and include the experience of 70,000 calls a month."
Recently, however, the market has shifted away from preauthorization. Some payors in highly competitive markets in the western U.S. want to avoid on-the-spot intervention, and instead are looking for subtler ways to control costs, Dehn said.
In response, RadMD has introduced a retrospective profiling tool called Provider Performance Feedback that's Web-based and modality-specific. Based on the firm's existing clinical logic database, the feedback tool reviews utilization information and locates specific problem areas.
"We'll take something like MRI of the brain for a headache without focal neurologic findings, and say this is how many times you've ordered that, and here are the national guidelines applicable to that."
Figures for the retrospective reproach aren't available yet, but Dehn guesses that clients will see about 80% of the cost savings associated with prior authorization. It's not just large payors who are interested. Physician groups in the western U.S. are entering into their own risk-management schemes, eager to get a handle on costs.
"Physicians, when they get into capitated arrangements, can get pretty tough with each other. They're very aggressive in their management policies; they're not afraid to require preauthorization," Dehn said. The main task at this point is to get physicians comfortable with the process.
"I just spoke to an IPA in Los Angeles where 86% of their authorizations are performed online, which is just a remarkable number.... We have a great product to offer; the challenge is simply getting physicians to use the Internet," Dehn said. "Once they're familiar with that, then it's a training program on how to use our particular system, which is pretty self-explanatory."
By Eric BarnesAuntMinnie.com staff writer
February 20, 2001
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