For example, oncologists evaluating a cancer patient may
refer the patient to their own office for a CT scan performed using equipment they
leased. This practice, known as self-referral, allows oncologists to make rapid
diagnoses, improves care coordination, and provides convenient access for
cancer patients. However, self-referral raises questions about whether
financial interests influenced the oncologist’s referral decision. Perhaps
another imaging technology would have been less expensive for Medicare, more
appropriate for the patient, and avoided unnecessarily exposing the patient to
the CT scan’s ionizing radiation.
Last week, Senators Max Baucus (D-MT) and Chuck Grassley
(R-IA) and Representatives Pete Stark (D-CA), Sandy Levin (D-MI) and Henry A.
Waxman (D-CA) released a report that investigates whether physicians who had a
financial stake in ordering MRI and CT scans were likely to order more scans
than physicians who did not have such an incentive. The report shows that
physicians who self-refer order more MRI and CT scans than physicians who do
not have a financial stake in the scanning equipment.
Based on its review of Medicare claims, the Government
Accountability Office (GAO), Congress’ fiscal watchdog, estimated that
providers who self-referred likely made 400,000 more referrals for advanced
imaging services than they would have if they were not self-referring. These additional referrals cost Medicare
about $109 million.
The Centers for Medicare and Medicaid Services (CMS), the
federal agency that runs the Medicare program, does not believe it has the
statutory authority to implement all GAO’s recommendations, such as requiring
prior authorization for certain imaging services. However, it did say that it
would consider GAO’s report in refining its medical review strategy for
advanced imaging services.
Medicare’s payment of the claims for the additional imaging
services in the GAO review demonstrates that CMS found the services to be
reasonable and necessary. Nevertheless, we can expect that Congress and CMS
will increase their scrutiny of self-referred imaging services based on the
GAO’s findings in 2013.
It is important to keep in mind that self-referral of
advanced imaging services is just one of many issues that will never be fully
resolved without broader reform to Medicare’s physician payment system. The
uncertainty created by the annual threats of monumental physician payment cuts
only drives physicians to order more services today and further contributes to
the unsustainability of the Medicare program. The
threatened cut of 26.5% to physician payments scheduled to take effect on January 1, 2013 without congressional
action reemphasizes the need for broader Medicare payment reform.
