New Findings Suggest Doc Overuse of Imaging to Boost Income

By John Reichard, CQ HealthBeat Editor

With lawmakers on the prowl for pay-fors to offset the costs of the next Medicare “doc fix,” a new Government Accountability Office study is coming out at a bad time for the medical imaging industry and the doctors who own imaging gear.

The study, released Wednesday, found that doctors with a personal financial stake in ordering MRIs or CT scans — either because they or a family member owned or were part owners of the imaging equipment — issued 400,000 more referrals for such tests in 2010 for Medicare patients than they would have without such a stake. In that year alone, the additional referrals cost Medicare about $109 million, the report said.

“To the extent these referrals were unnecessary, they pose unacceptable risks for beneficiaries, particularly in the case of CT services,” the report said. CT scans “involve the use of ionizing radiation that has been linked to an increased risk of developing cancer,” the GAO study pointed out.

A House Democratic aide noted that money to offset the cost of blocking a scheduled Jan. 1, 27 percent cut in Medicare doctor payments is not easy to come by. Congressional aides most recently have talked about a one-year “fix” with a ten-year price tag of about $20 billion.

Eliminating overuse of MRI and CT scans stemming from self-referral for financial rather than medical reasons would save a billion dollars over ten years, the Democratic aide noted. The money saved from imaging overuse could make a substantial down payment on the funds needed to solve the Medicare physician payment problem.

Officials with the Medical Imaging and Technology Alliance Congress issued a statement Wednesday evening urging Congress use criteria developed by physicians to address this issue.

“Qualified physicians regardless of their specialties should be able to provide appropriate imaging services to their patients,’’ said Gail Rodriguez, MITA’s executive director. “Efforts to limit physicians would threaten patient access to health care providers and technologies while obstructing coordinated care models that have been proven to lower costs and improve care.” The trade group also said that the GAO report did not say that per capita medical imaging utilitization for Medicare patients has been steadily declining.

The GAO analysis examined “switchers” to pinpoint the impact of ownership on referrals. It said referrals of MRI and CT services increased the year after doctors purchased or leased imaging equipment, or joined a group practice that referred its patients to imaging services in which it had a financial stake.

“Providers that began self-referring in 2009 — referred to as switchers — increased MRI and CT referrals on average by about 67 percent in 2010 compared to 2008,” GAO said. “In the case of MRIs, the average number of referrals switchers made increased from 25.1 in 2008 to 42 in 2010.”

In comparison, doctors who already were self referring, or who made referrals to imaging providers they had no financial stake in, on average ordered fewer MRI and CT scans during the same period.

“This comparison suggests that the increase in the average number of referrals for switchers was not due to a general increase in the use of imaging services among all providers,” GAO said.

Further, the study found that of all providers that ordered an MRI or CT scan in 2010, self-referring providers ordered about two times as many of those tests as those who did not self refer.

“These two analyses suggest that financial incentives for self-referring providers were likely a major factor driving the increase in referrals,” the report said.

A number of lawmakers called attention Wednesday to the GAO findings. Most, but not all, were Democrats. House Democrats Sander M. Levin of Michigan and Pete Stark of California said the findings show the need to curb or stop self-referral. Rep. Henry A. Waxman of California also issued a written statement criticizing self referral.

Senate Finance Committee Chairman Max Baucus, D-Mont., said providers’ bottom lines shouldn’t get in the way of patients’ best interests. Republican Sen. Charles E. Grassley of Iowa said “the challenge is to develop a payment system that safeguards beneficiary access to services while preventing self-referrals by physicians who abuse the system.”

The Medicare Payment Advisory Commission (MedPAC) has weighed in on the issue but has stopped short of issuing a recommendation against self-referrals in medical imaging.

It has however, recommended that providers with higher rates of ordering advanced medical imaging participate in a prior authorization program and that Medicare cut payment rates for imaging services when the same provider orders and performs an imaging service.

MedPAC has concluded that financial incentives are at work in driving up use of imaging services. It

observed in its June 2009 report to Congress that “although the rise of in-office imaging may improve access and convenience for patients, it might also lead to higher volume through additional capacity and financial incentives for physicians to refer patients for more tests.”

Physicians with financial interests in imaging are likely to respond to the study by emphasizing that there are other ways to address inappropriate imaging than ending self-referral arrangements.

“Provision of in-office imaging services is critically important for musculoskeletal patients and can lead to greater adherence to treatment plans and improved outcomes,” said John Tongue, president of the American Association of Orthopaedic Surgeons.

“Like the GAO, the AAOS believes that wasteful spending in Medicare should be addressed,” the association Tongue in a statmement. “The AAOS is invested in quality initiatives to ensure that only medically necessary services are performed on orthopaedic patients.”