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Published 5/1/2013

What’s Behind the Threat to IOAS

Although the Stark self-referral laws extended restrictions on physicians’ self-referral of radiology services to entities in which they have an ownership interest, the IOAS exception allows physicians to refer patients for ancillary services in their own practices, including physical therapy, laboratory services, orthotics and prosthetics, among others.

As the use of imaging services has increased, physicians who provide imaging services outside of an imaging facility or hospital have come under attack. A recent Government Accountability Office (GAO) report argued that higher use of advanced imaging by providers who self-refer cost Medicare $109 million per year and $1.1 billion over 10 years. In addition, the issue of closing the IOAS exception to the Stark Law has been sent to the Congressional Budget Office (CBO) to determine if it would result in budgetary savings. In the current fiscal environment, if the CBO were to score this provision with a significant amount of savings, it could be introduced legislatively and used as a financial offset for other legislation.

AAOS actions
The American Association of Orthopaedic Surgeons (AAOS) has several concerns with the methodology and conclusions of the GAO report, which were articulated by John R. Tongue, MD, in a meeting with GAO Director of Healthcare James Cosgrove, PhD, and Rep. Tom Price, MD, on Feb. 28.

A recent attempt to close the IOAS exemption failed. AAOS advocacy efforts contributed to successfully avoiding further expansion of the Stark Law; however, eliminating the exception may be considered as an offset for a long-term fix to the Sustainable Growth Rate formula.

The AAOS office of government relations (OGR) has been working aggressively to protect the IOAS exception with legislators in Washington, through coalition partners, and through grassroots efforts. In addition to lobbying targeted Congressional committees with jurisdiction over this issue, the OGR is using the Orthopaedic Political Action Committee to cultivate existing relationships and gain access to influential players.

The AAOS Board of Councilors State Legislative & Regulatory Issues Committee is conducting an economic study of the effect of physician ownership on utilization of imaging services to provide accurate, comprehensive data on imaging services across various practice settings. Phase 1—a survey of AAOS members on practice ownership of advanced diagnostic imaging equipment, purchase data, and other demographic information—has been completed. Phase 2 is currently underway and involves matching the survey information with Medicare utilization data.

The AAOS is also in the 16 member of the Coalition for Patient-Centered Imaging (CPCI), which has launched an aggressive campaign to ensure that lawmakers have accurate information regarding advanced imaging.