12/18/2012 06:16 pm ET Updated Feb 17, 2013

GAO Reports Self-Referrals for Imaging Are Costly

Part 1: Physician Self-Referrals Increase After Equipment Is Purchased

The Government Accountability Office (GAO) recently announced that physician referrals for MRI and CT examinations for Medicare beneficiaries substantially increase the year they purchased or leased imaging equipment or after joining a group that already practiced self-referral. Self-referral is a subject that is near and dear to my heart, and I have written other blogs on the topic.

As insurance and Medicare reimbursements are decreasing, physicians are looking for new revenue sources. One major revenue source for physician practices is ancillary services, specifically imaging and the more costly MR and CT examinations. MR and CT equipment is expensive to purchase and to maintain, so increased utilization is required to help compensate for the decreased reimbursement and previously anticipated revenue streams.

Alarmingly, the GAO's report of all providers that referred an MR or CT examination in 2010 revealed that self-referring providers referred about twice as many of these services as providers who did not self-refer. The GAO study further reported that providers that began self-referring in 2009 -- referred to as "switchers" -- increased MR and CT referrals on average by about 67 percent in 2010 compared to 2008. The average number of MR referrals by these "switchers" increased from 25.1 in 2008 to 42.0 in 2010. When this increase is compared with the decline in the average number of referrals by providers who remained self-referrers or non-self-referrers during this same period, the differential suggests that the increase in the average number of MR referrals by the "switchers" was not due to a general increase in the use of imaging services among providers.

Non-radiology physicians who self-refer typically also interpret their own images. When the same physician both orders and interprets the imaging examinations, it encourages an increase in the number of imaging examinations ordered because if the images are interpreted with ambiguity, additional imaging or treatment recommendations to "clarify" the findings are justified. This cycle further increases the individual physician/practice income stream as well as contributes to the health-care expenditures for the government and insurance companies, as well as the patient.

Data regarding unnecessary expensive imaging and media coverage lead many to conclude that costly imaging examinations are responsible for the healthcare debacle. Medicare Part B expenditures, including payments for advanced imaging services, are expected to continue growing at an unsustainable rate. Unfortunately, costly imaging examinations, not the abuse, continue to be targeted.

Radiologists are physicians trained to interpret images and provide an unbiased interpretation of patients' images. Radiologists perform imaging examinations only as ordered by a non-radiology physician. Non-radiology physicians who have their own imaging equipment or imaging center can both order and interpret imaging examinations. While these physicians are concerned with their patient's well-being and with providing appropriate patient care, they are also concerned about their businesses' bottom lines and returns on their investment.

Self-referral leads to more images, more treatment, more surgeries, etc., and contributes to the escalation in the unsustainable rising health-care costs. It is a vicious cycle. So why not just eliminate self-referral? The Congressional Budget Office (CBO) is considering potential cost savings by eliminating In Office Ancillary Services (IOAS) exception to the Stark Law, which would ban physicians from owning ancillary devices such as advanced imaging and physical therapy services. This CBO initiative will be met with resistance. Strong lobbying groups, including the Coalition for Patient Centered Imaging (CPCI) and other such specialty societies, are united for the sole purpose of maintaining their lucrative self-referral practice patterns. The CPCI is committed to preserving physicians' rights to provide ancillary services. These diverse sub-specialty practitioners are united because there is strength in numbers, and the negative financial impact of losing the ability to continue self-referral would be devastating to their practices. The self-referring physicians tout self-referral as necessary in order to provide effective patient care as it facilitates the office visit, giving patients easier access to imaging. They do not mention greed and the business pressures of running a practice.

As I have suggested in previously-referenced blogs, when your physician recommends that you have an image examination performed, it is your responsibility to ask if he/she owns the equipment and if a board-certified specialized radiologist will be interpreting the acquired images. Don't be reluctant to ask for a referral to an imaging center that is not financially tied to the physician making the referral.

Patients and physicians each have a role in controlling the cost of health care, which includes assuring that imaging and medical treatments are performed only when medically necessary. Image acquisition and interpretations by specialized radiologists and treatment when necessary by a specialized physician provide the best opportunity for early diagnosis and effective treatment. The more a patient knows and acts on this knowledge, the better the delivery and outcome of health care in America.


For more by Helene Pavlov, M.D., click here.

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