Medicare panel urges crackdown on excessive MRIs

Kaiser Health NewsJune 15, 2011 

WASHINGTON — An influential independent congressional advisory group is urging lawmakers to crack down on doctors who order too many MRIs for seniors, setting off a battle with physicians and patient groups who argue that Medicare beneficiaries might suffer significant delays in treatment.

The recommendation by the Medicare Payment Advisory Commission would require some physicians who order a lot of MRIs, CT scans, nuclear medicine studies and other imaging tests to get pre-approval from Medicare.

In its latest report, sent Wednesday to Congress, MedPAC takes aim at physicians who order these tests inappropriately and concludes that Medicare costs for such tests are surging partially because physicians increasingly are buying their own high-tech equipment. When they can perform diagnostic tests in their own offices, they get to pocket the profits.

"There's some bad behavior going on out there, with physicians buying imaging equipment and generating unnecessary services," Robert Berenson, MedPAC's vice chairman, said in an interview. "It seems prudent to target high utilizers for authorization."

Imaging is one of the fastest-growing Medicare costs, rising from $6.5 billion to $11.7 billion from 2000 to 2009, according to federal figures. Industry groups say the use of imaging services declined from 2008 to 2009, but MedPAC disputes that data and counters that usage is on the rise.

While a 1989 law prohibited physicians from referring patients to testing centers in which they had financial interests, it didn't stop them from performing tests in their offices. In 2008, the Center for Studying Health System Change, a nonpartisan research center, surveyed doctors and found that 29 percent owned or leased equipment to conduct tests such as echocardiograms and nuclear medicine studies, 25 percent had clinical lab testing equipment, 23 percent had X-ray machines and 17 percent had MRI or computed tomography machines.

"Physician investment in diagnostic testing equipment has contributed to rapid growth of imaging and other tests under the physician fee schedule and has resulted in a high level of utilization that likely includes unnecessary services," MedPAC told Congress.

While MedPAC acknowledged that having the equipment close at hand allows physicians to diagnose and treat patients more quickly and precisely, it argued that these doctors order more of such services than those who send patients to unrelated facilities.

The proposal sparked a furor among some physicians and politicians even before it was announced, pointing to the difficulty of making even small changes in the sprawling program for the elderly, much less overhauling it.

Opponents argue that getting prior authorization would delay care and wouldn't save much money. Such changes would "likely result in denial of timely and medically necessary care, and exacerbate public concerns about governmental intrusion into the physician-patient relationship," more than two dozen physician groups wrote in a March letter to MedPAC Chairman Glenn Hackbarth.

They also maintain that new restrictions are premature, given that laws and regulations approved over the past five years have slowed imaging's growth.

Medicare payments "for diagnostic imaging services in non-hospital settings have been subjected to a series of cuts in recent years, and many (payments) will have been reduced by 25-40 percent by 2013," according to the letter. "Medicare payment reductions carry a significant risk of unintended consequences and should not be imposed until the current cuts have been fully phased in."

In a May 20 letter to Hackbarth, House Energy and Commerce Health Subcommittee Chairman Joe Pitts, R-Pa., and ranking member Frank Pallone, D-N.J., question MedPAC's conclusion that imaging is a major driver of the program's increased spending. While Pitts and Pallone fought over last year's health law, they've joined forces to oppose MedPAC's recommendation.

Congress isn't required to follow any MedPAC recommendations, but some observers think that Capitol Hill may give these findings a closer look as it works to control the federal budget deficit.

Lawmakers previously have taken several steps to control Medicare imaging expenditures. As part of the Deficit Reduction Act of 2005, Medicare can't pay a physician more for imaging services done in his office or a free-standing imaging center than it pays for a similar service in a hospital-outpatient facility.

A 2008 law requires imaging centers and physician offices to become accredited by a government-approved entity by Jan. 1, 2012, and it created a demonstration project to test the appropriate use of specific imaging services.

Moreover, last year's health overhaul law reduced Medicare imaging payments by $3 billion over 10 years.

The health law also requires doctors who refer Medicare and Medicaid patients to in-house imaging machines to disclose that they own the equipment and provide patients with a list of 10 alternative sites within 25 miles.

In his fiscal 2010 budget proposal, President Barack Obama tried to restrict the growth of imaging costs by requiring the use of radiology benefit managers in Medicare. That proposal didn't become law, although many private insurers use similar controls.

MedPAC also made several recommendations to reduce payments to account for efficiencies when a patient gets multiple diagnostic services during the same visit.

While MedPAC didn't recommend cracking down on physician referrals to their own physical therapy, radiation therapy and anatomic pathology test centers, it promised to track their growth.

Berenson maintains that the 2005 imaging changes didn't create access problems for seniors and people with disabilities and there's no reason Congress should stop there.

The Government Accountability Office, which has embraced the idea of requiring pre-authorizations, "did a study and found that the impact of the (change) was that spending decreased 12 to 13 percent. Volume continued to increase, but less," Berenson said. "That's a pretty good result. There were no access problems, and significant savings. We should continue to look for opportunities to reduce overpriced services. Nothing bad happens."

(Kaiser Health News is an editorially independent news service of the Kaiser Family Foundation, a nonpartisan health care policy organization that isn't affiliated with Kaiser Permanente.)

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