The fee-for-service Medicare program and its beneficiaries would reap significant savings if Radiology Benefits Management (RBM) programs were adopted by Medicare, according to a recent study by Magellan Health Services. Commissioned by Magellan's NIA subsidiary and conducted by Milliman, Inc., an independent actuarial and consulting firm, the study shows that were RBM programs to be implemented in fiscal year 2012, the program could generate $13 billion to $24 billion in savings by 2020 providing that the performance of the programs was consistent with the Medicare Advantage experience reviewed.
The independent review included aggregated results from two RBM vendors, with the experience of 10 Medicare Advantage clients used to develop a savings projection. Based on these parameters, the total total allowable charges associated with advanced imaging services were estimated at approximately $111.6 billion for the period spanning fiscal year 2011 through fiscal year 2020. If a RBM program were implemented in fiscal year 2012, the review estimates, the program would not only yield the abovementioned savings for the period ending 2020, but that the estimated savings to the Medicare program would be $10 billion to $19 billion over the same period. The savings would be shared between the beneficiaries through lower cost sharing and the fee-for-service Medicare program. This estimate does not include the administrative cost of providing such a program.
Currently, Medicare specifically restricts the use of prior authorization programs for the Medicare fee-for-service population. This is despite the fact that such programs are used in Medicare Advantage plans and many state Medicaid programs, as well as by virtually every commercial insurer.