Anthem’s Outpatient Imaging Policy: the Economics of Restrictive Policies

In an effort to drive down health care spending and premium costs, more payers are adopting strategies that drive patients to more appropriate—and less costly—sites of care.

Recent research in the American Journal of Managed Care found that payers are adopting consumer driven health plans more and more in order to try and curtail costs. However, according to the study, switch patients to high-deductible plans with health savings accounts and other cost-sharing mechanisms did not reduce spending on low-value services with no clinical benefit—specifically, imaging services.

In light of this, payers are looking for innovative ways to reduce spending on imaging services that  are not valuable.

Recently, Anthem announced it would no longer pay for certain advanced imaging services at hospital-based facilities. The impetus behind the move, according to Anthem spokesman Lori McLaughlin, was to reduce costs and unnecessary spending for a service that could be provided equally well at an alternate location.

According to the company, the decision will help address what they believe are huge cost disparities for imaging services between outpatient hospital services and freestanding clinics or imaging centers. Ms McLaughlin said members can save nearly $1000 in out-of-pocket costs for some imaging services if they have not met their deductible and up to $200 for plans that require only a copay if they receive nonemergency imaging tests outside an outpatient hospital setting.

Anthem is not the only payer to turn to new strategies. Payers are increasingly looking for strategies that extend beyond value-based payment to dive deeper and make a more significant cut in spending.

“Historically, plans have really tried to restrict access to inefficient care, whether that's through direct rate negotiations, whether that's through narrow networks around lower cost providers, or even value-based payment as restricting utilization,” Rachel Sokol, practice manager of research at the Advisory Board, told First Report Managed Care. “But more and more when we talk to plans, we're seeing that these strategies are really reaching their limits, both in terms of how effective they are and how much individuals are willing to tolerate them.”

She said plans are now pivoting to try to enhance access to more appropriate care options, such as driving patients to primary care more often. These types of strategies can be anything from offering access to same-day primary care, providing transportation services, or partnering with pharmacies such as CVS or Walgreens to provide health services.

“The goal is to lower medical spend and ultimately lower premiums,” she said.

Ms Sokol said payers are becoming less and less tolerant of paying an automatic 5% to 10% increase on their premiums year over year.

“If you are a payer, 85% of your premium is spent on medical care one way or another, so if you are able to lower that, you are able to offer competitive premiums and ultimately win more business,” she said.

Anthem's New Policy

Anthem is hoping that one way they will be able to influence costs is by restricting the use of high cost services at hospital settings, while still providing access to quality health care.

They plan to do this through their Imaging Clinical Site of Care program, which is run by Anthem subsidiary, AIM Specialty Health.

Through the program, they will identify when hospital outpatient services for certain imaging tests are deemed “medically unnecessary,” and instead request that the patient receive the services at an alternate site, such as an outpatient clinic or imaging center.

The program was first unrolled in four states on July 1, but has since added an additional five states to the program. Anthem plans to continue the roll out to California, Connecticut, Maine, and Virginia by March 1, 2018.

Ms McLaughlin added, however, that the program will only include a level of care review in those areas where there are at least two alternate freestanding imaging centers that provide the service in need, allowing some patients in rural areas to gain approval to have the imaging done in hospital outpatient settings.

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Will Other Payers Follow?

Francois de Brantes, MS, vice president and director of the center for payment innovation at Altarum, said he believes other payers, and even some states, will follow suit to make similar decisions about high cost hospital outpatient services.

“For example, last year the state of Connecticut passed a regulation that creates parity in pricing for services such as these in order to prevent what has been happening everywhere in the country, namely that a hospital will take over a stand-alone imaging facility and charge more for the services as 'hospital services' even if in an outpatient setting,” he said.

Ms Sokol said Anthem's policy is similar to the position the CMS took on the issue, which was making the decision to pay the same rate for hospital vs nonhospital-based imaging services.

But she said not all payers view the issue in the same way.

“There are other plans that we work with, especially those that have joint-venture arrangements or a larger value-based payment arrangement with a health system, where they are actually trying to get individuals to go and get all diagnostic tests at the hospital for better care coordination,” she said. “These hospitals are also already accountable for costs.”

The strategy may be more appealing, she explained, for health plans who are either contracting more with independent physicians in value-based arrangements or who are not utilizing value-based arrangements.

Creating Pricing Discipline

Anthem's decision to limit the site of care for imaging services is just one more example of an overall trend in the industry to create more market discipline surrounding the price of health care services.

“Why should a diagnostic imaging study's price jump simply because it changed ownership?” de Brantes said.  “If health plans, on behalf of their customers—employers, municipalities, school systems, etc.—don't create competition on market pricing, then premiums will simply continue to rise, making health care coverage less affordable.”

While some hospitals may rely on the income from these high-cost services, de Brantes said the prices were increased for the services artificially, making it necessary to bring those costs back down now.

“Instead of focusing on lost revenue, hospitals should be focusing on improving internal operating efficiencies,” he said. “After all, they have to do that as the country moves increasingly toward greater levels of value-based payment.”

Benefit Design and Tiered Incentives

Some payers have also tried to drive patients to more affordable cost of care sites through benefit design or tiered incentives; however, Ms Sokol said these strategies have been less effective and have been met with resistance from health plan members.

For instance, she said, one health plan even used an escalating copay structure for emergency room department visits for patients if the services could have been provided elsewhere, but the plan still was unable to see a change in patient behavior.

“I would say there are a few reasons for that based on our research,” she said. “One, there's a huge communication and comprehension challenge that plans have of simply explaining how their benefits work, and having individuals understand how that changes how they make decisions in the moment .”

Additionally, the afformentioned American Journal of Managed Care study found that while these plans sometimes reduce indiscriminate spending , they typically do not cut down on low value service utlization.

Price is also typically a confusing signal for consumers, who often feel that they more you pay for something the higher the quality it is, according to Ms Sokol.

Finally, physicians do not always have insight into every patient's benefit in the moment, making it difficult for the individual to either go against a physician's recommendation or have a physician explain the financial implications of a choice, as well as the clinical implications.

Ms Sokol believes other payer strategies, such as improving access to primary care, may be more effective in ultimately lowering costs and changing patient behavior.

“We're seeing results from plans where when they are able to get individuals into the primary care provider's office, they can in some cases cut ED spending in half for that population,” she said.

Ultimately, however, as the move toward value-based health care delivery grows, experts agree that patient and physician education will be essential to the success of strategies that attempt to direct patients to more affordable sites of care to receive their services.

“Plans are doing a lot to incentive not just individuals to make some of these decisions about where to seek out different high cost procedures, but also to incentive the physicians to better direct members through medical home programs,” Ms Sokol said.

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