GAO recommends prior authorization to contain Medicare costs for medical imaging services

July 19, 2008 -- The Government Accountability Office (GAO) is recommending that the Centers for Medicare & Medicaid Services (CMS) contain future costs related to "high tech medical imaging" by requiring authorization for heretofore routine services. The report was issued following an investigation that found Medicare spending for high-tech imaging services paid for under the physician fee schedule more than doubled between 2000 and 2006.

According to the GAO, "Private health care plans that GAO interviewed used certain practices to manage spending growth that may have lessons for CMS. They relied chiefly on prior authorization, which requires physicians to obtain some form of plan approval to assure coverage before ordering a service. Several plans attributed substantial drops in annual spending increases on imaging services to the use of prior authorization.