The hidden costs of routine radiology and how they can be addressed

It’s a common scenario. A patient with a sore foot schedules an appointment with their primary care physician. The PCP orders an X-ray without first examining the patient or knowing the exact nature of the complaint.

No one questions the necessity of the X-ray, not the physician, the patient, or their health plan. The X-ray might or might not reveal anything helpful about the sore foot.

While this single instance is minor, misuse of routine radiology occurs on an enormous scale with little oversight or scrutiny. The results are wasteful spending, low-value care, and potential harm to patients.

A better way to manage routine radiology could save millions of dollars, improve care, and reduce patient exposure to radiation.

The overlooked imaging category costing health plans millions

X-rays, ultrasounds, and noncardiac nuclear medicine constitute a high-volume category of outpatient imaging that often escapes scrutiny because each test is relatively inexpensive. Unlike CT, MRI, PET, and cardiac nuclear medicine, these services are not typically managed through the same high-tech imaging controls.

That gap matters. The U.S. spends about $100 billion annually on medical imaging, and studies suggest a significant share of imaging may be unnecessary. A 2022 commercial health plan claims review found that approximately 8% of routine radiology claims were inconsistent with established care standards. Broader research published in BMC Medical Imaging found that 20% to 50% of radiological examinations may be overused, depending on country, setting and modality.

For health plans, the category represents approximately $13.13 per member per month (PMPM), according to Avalon claims analysis. In a commercial plan with approximately 1 million members, Avalon found a 6% non-adherence rate to clinical standards for routine radiology, translating to roughly $0.75 PMPM in potentially avoidable spend, or nearly $9 million annually per million members.

On a PMPM basis, this overlooked category is roughly comparable in aggregate spend to CT, MRI, and PET, even though those procedures are individually far more expensive.

As healthcare costs continue to rise, health plans can no longer afford to leave high-volume imaging categories unmanaged.

The cost to patients of routine radiology

Although these forms of radiology may be routine, they still take a mental and financial toll on patients. One study found that 68.4% of patients reported that the tests caused anxiety and distress. Of the respondents, 65.4% reported an increased treatment burden, and 57.5% experienced financial strain.

Unnecessary imaging creates incidental findings that trigger further testing, patient anxiety, physician time burden, and out-of-pocket costs — without meaningfully improving outcomes. The once-standard practice of routine pre-surgical chest X-rays is a prime example of this: evidence eventually showed that the harm from chasing incidental findings outweighed any benefit.

High volume, low value

Low-value care refers to services, treatments, and tests that provide minimal, if any, clinical benefit to a patient’s health outcomes. It is medically questionable and misdirects resources within the system. In one study, imaging was associated with four of the five most prevalent low-value services among Medicare beneficiaries.

Why is routine radiology so common in low-value care? There are a number of reasons.

1. It's baked into clinical workflow, not clinical decision-making. Many tests, especially ultrasounds, are ordered reflexively as a default step in the workflow, sometimes before a clinician has even seen the patient.
2. It’s the wrong tool for the problem. An example: X-rays for plantar fasciitis. X-rays are designed to evaluate bone and dense tissue, but plantar fasciitis is a soft tissue problem. Using an X-ray in this context is clinically inappropriate, yet it happens routinely.
3. Inappropriate frequency. Chest X-rays, for example, should not be repeated within a short interval absent an intervening treatment, yet this occurs frequently.
4. Redundant procedure combinations. Ordering both an X-ray and a CT scan of the same region in the same episode of care is medically redundant when the CT answers the clinical question. Yet both are sometimes ordered and performed simultaneously. Beyond the financial waste, this also means patients receive unnecessary cumulative radiation exposure, which is a lifelong health consideration.

Routine radiology management

As the challenge of managing routine radiology grows, plans seek ways to address it without increasing administrative burden or interfering with care. Prior authorization (PA) is impractical for these low-cost, high-volume tests and delays care and frustrates providers. Payment integrity measures address coding accuracy only, not the necessity of the test.

What is needed is a smarter alternative: automated management that occurs after service but before payment. It eliminates the need for PA while still allowing automated, policy-based review before payment. Here’s how routine radiology management (RRM) works:

Plans adopt policies that establish criteria for appropriate routine radiology use in outpatient settings, informed by recognized sources and clinical expertise. A fully automated program applies these policies for pre-payment for real-time claim editing.

There are no delays to care; patients receive immediate care without needing pre-service PA. Denials for non-compliant claims are coded as provider liability, shielding members from financial responsibility. And the program can generate reporting, feedback and plan-level insights that support provider education and more appropriate ordering over time.

Measurable returns

Routine radiology has gone largely unregulated because, while it’s very common, the per episode cost is relatively low. However, in total, it represents an opportunity for plans to achieve sizable savings while also reducing low-value care and improving outcomes.

However, managing it effectively will require a different approach than the standard PA requirements. RRM consisting of automated post-service, pre-payment policy applications, will allow health plans to receive immediate financial returns and clinical benefits.

James W. Long is vice president of products at Avalon Healthcare Solutions, a diagnostic intelligence firm.