UPDATE 1-US Medicare advisers eye imaging, biologics savings

* Cheaper, generic biologic drugs needed -MedPAC

* Commission: higher payments for private plans unfair

* Imaging tests may be overused, report says (Adds details from report, background, byline)

By Susan Heavey

WASHINGTON, June 15 (Reuters) - Expensive medical tests, costly biological drugs and overpaid private insurance plans need tighter controls to help rein in costs to the multibillion-dollar U.S. Medicare health insurance program, a panel of advisers said on Monday.

The Medicare Payment Advisory Commission, or MedPAC, in its June report urged Congress to consider how the program for the nation's elderly and disabled pays for such services, in order to temper spiraling expenses that totaled $468 billion 2008.

The commission, an independent body authorized by Congress to advise lawmakers on the Medicare program, said use of imaging scans to diagnose cancer, heart problems and other conditions are growing twice as fast as other care.

"There are reasons to be concerned that some of the increased use in recent years may not be appropriate, which contributes to Medicare's growing financial burden on taxpayers and beneficiaries," it said.

It also called for a legal way for the U.S. Food and Drug Administration to approve cheaper, generic versions of complicated biological drugs used to treat cancer and other diseases that are costing Medicare about $13 billion a year.