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Imaging Self-Referrals Could Raise Costs, Hurt Patients, Report Says

Physicians with a financial stake in ordering imaging tests, such as MRIs or CT scans, issued 400,000 more referrals for such tests in 2010, amounting to $109 million in additional referral costs for Medicare beneficiaries, according to a Government Accountability Office report released Wednesday, The Hill's "Healthwatch" reports.

Such practices waste money and potentially put patients at risk, GAO said (Baker, "Healthwatch," The Hill, 10/31).

Details of Report

For the report, GAO analysts examined Medicare Part B claims data for MRI and CT scan services from 2004 through 2010. Analysts used taxpayer identification numbers to determine whether physicians that ordered the imaging tests had a financial relationship with the provider of the tests.

The report found the number of MRI services increased by more than 80% among physicians who self-referred, while non-self-referred services increased by 12% during the same period. Meanwhile, self-referred MRI costs increased by 55%, from $239 million in 2004 to $370 million in 2010. Non-self-referred MRI costs dropped by more than 8%, from nearly $1.34 billion in 2004 to about $1.23 billion in 2010.

Over the study period, expenses for self-referred CT services grew by 67%, from $204 million in 2004 to $340 million in 2010, while non-self-referred CT services rose by 5%, from $609 million in 2004 to $642 million in 2010 (Robeznieks, Modern Healthcare, 10/31).

In addition to the extra costs, the report noted, "To the extent these referrals were unnecessary, they pose unacceptable risks for beneficiaries," particularly in the case of CT scans, which require high doses of radiation that has been linked to an elevated risk for cancer (Reichard, CQ HealthBeat, 10/31).

GAO Recommendations

GAO offered several recommendations to address the problem, such as:

  • Requiring providers to specify on their claims that they are self-referring;
  • Directing CMS to develop and implement a payment-reduction policy for self-referred services; and
  • Requiring CMS to implement an approach that determines whether self-referred imaging services are appropriate for specific cases (Modern Healthcare, 10/31).

Lawmakers React to Report

Several lawmakers on Wednesday, many of whom are Democrats, used the GAO report as evidence that the practice of self-referrals should be curbed or stopped, CQ HealthBeat reports (CQ HealthBeat, 10/31).

The report was requested by Senate Finance Committee Chair Max Baucus (D-Mont.), Sen. Chuck Grassley (R-Iowa) and Reps. Henry Waxman (D-Calif.), Pete Stark (D-Calif.) and Sander Levin (D-Mich.).

In a joint news release, Baucus called the findings "eye opening" (Modern Healthcare, 10/31). "Providers' bottom lines shouldn't be getting in the way of their patients' care and best interests," he said ("Healthwatch," The Hill, 10/31).

Grassley, ranking member of the Senate Judiciary Committee, added, "Medicare payment policy shouldn't incentivize unnecessary tests that drive up costs" and put patients at risk, but he acknowledged that the "challenge is to develop a payment system that safeguards beneficiary access to services while preventing self-referrals by physicians who abuse the system" (Modern Healthcare, 10/31).

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