GAO self-referral study backs move for total ban

May 5, 1993

The General Accounting Office released a study last month disclosingthat Florida physicians with imaging center investment interestsordered far more medical imaging tests than doctors who did notself-refer. The GAO's findings have already provided

The General Accounting Office released a study last month disclosingthat Florida physicians with imaging center investment interestsordered far more medical imaging tests than doctors who did notself-refer. The GAO's findings have already provided ammunitionfor Rep. Pete Stark's (D-CA) attempt to pass a blanket ban onself-referral.

The GAO report was presented on April 20 to Stark's Committeeon Ways and Means subcommittee on health. The subcommittee hadasked the GAO to follow up on a study released in 1991 by theFlorida Health Care Cost Containment Board that found a patternof inflated prices and increased utilization of physician-ownedjoint-ventured imaging centers.

Data from the Florida study were used in the GAO report, whichbroke down the Florida numbers to get a more precise look at self-referralpatterns for Medicare services in 1990, the year the data weregathered. What the GAO found was enough to make even the mostardent defender of self-referral blush.

Among the study's findings:

û Florida physicians with imaging center investmentsaccounted for a larger percentage of imaging referrals than thosewithout investments. Self-referring physicians constitute 14%of all physicians in the state who referred Medicare patientsfor imaging services, but were responsible for 22% of all imagingreferrals and 34% of all MRI referrals;

  • Self-referral rates tended to be higher among physicianswith ownership interests in more expensive modalities. Referralrates for owners of MRI centers were 54% higher than for non-owners,28% higher for CT and 25% higher for ultrasound and echocardiography;

  • Physician investment in MRI centers was more prevalentamong specialties most likely to refer patients for MRI scans.About 24% of neurological surgeons had investment interests inMRI centers, while general practitioners had an ownership rateof about 5%; and

  • Of the 39 MRI centers in Florida in 1990, only onedid not have physician investors.

"Our study results provide evidence that physician ownershiparrangements are associated with higher utilization of health-carefacilities and higher costs," said Janet L. Shikles, directorof health financing and policy issues for the human resourcesdivision of the GAO. "We believe (our findings) provide importantnew information for Congress as it considers legislation to extendcurrent restrictions on physician self-referral."

Congress apparently took the GAO's findings to heart: Stark'ssubcommittee strengthened legislation under consideration thatwould ban all referrals regardless of the payer. That bill, HR345, would have banned about 95% of all self-referral arrangements.HR 345 has since been amended to ban the entire concept of self-referral,according to an aide to the committee.

HR 345 was folded into a budget reconciliation package thatpassed the subcommittee last week, the aide said. The as-yet unnumberedbill will be considered by the full Ways and Means Committee inthe next several weeks.

"The GAO report was the final nail in the coffin of physicianself-referral," the aide said. "The evidence is overwhelmingthat it should be banned."

BRIEFLY NOTED:

  • A congressional hearing scheduled for April 22 on theNuclear Regulatory Commission's regulation of nuclear medicineand radiation therapy was postponed because of conflicts withSen. John Glenn's schedule. Glenn (D-OH) chairs the GovernmentalAffairs Committee in which the hearing was to be held. The hearingwas called to investigate reports of radiation overdoses and laxfederal regulation of medical radiation (SCAN 4/7/93). A new datefor the hearing has not been set.