Stark prepares for summer offensive on self-referrals

April 10, 1991

Rep. Fortney "Pete" Stark (D-CA) will launch a frontalassault early this summer on referring physicians who have financialstakes in freestanding imaging clinics. Medicare payments formagnetic resonance imaging and computed tomography will also

Rep. Fortney "Pete" Stark (D-CA) will launch a frontalassault early this summer on referring physicians who have financialstakes in freestanding imaging clinics. Medicare payments formagnetic resonance imaging and computed tomography will also betargeted.

An aversion in the executive branch to budget cuts as wellas prevailing economic rules on Capitol Hill may help Stark winadditional support for his health-care initiatives.

"If Congress makes any improvements in Medicare (whichrequire additional funding), we either have to cut some otherpart of Medicare or raise taxes, and I don't see us raising taxessoon," said William K. Vaughan, administrative assistantto the congressman.

Stark's office has asked the General Accounting Office to analyzedata on high-tech imaging and self-referrals to make a case thatmoney can be freed up for other Medicare programs. Much of thisinformation has been gathered by other agencies or associations,providing Stark with the opportunity to estimate savings beforethe reports from the GAO are in.

Up to $300 million might be saved annually by prohibiting physiciansthroughout the U.S. from ordering tests at outpatient facilitiesin which they have financial investments, Vaughan said.

These estimates are based on a Florida study that indicatedmore than one-third of referring physicians in the state wereordering tests at facilities in which they had at least partialownership.

More data regarding physician ownership of outpatient facilitiesin that state and a GAO report on the methodology of the researchare expected in late spring or summer.

A GAO report on charges for CT and MRI and the savings thatmight accrue from price reductions in those modalities is alsodue in spring.

"We're paying too much. The reimbursement rate is toohigh," Vaughan said.

These claims are based on advertisements sent to potentialinvestors in freestanding clinics and medical facilities thatmight be interested in leasing imaging equipment--advertisementsthat show excessive profit margins, according to Vaughan.

An American College of Radiology report lent support to thecase that MR and CT Medicare reimbursements are too high. Thereport showed that costs are less than half the current rate ofcharges.

The GAO's role is to validate predictions of the amounts thatmight be saved by eliminating "abusive" self-referralsand cutting MR and CT costs. Stark will then ask the Congressionalbudget office to credit the expected savings to pay for amendmentsto improve Medicare coverage.

Stark should find ample support for his actions.

"We can turn to our members and say, `We have things seniorcitizens want: programs for nursing homes and home health care.And we have fraud, waste and abuse. We can package them,'"Vaughan said. "We can exert pressure to pass Medicare improvementsby offering pay taken from the area wearing a black hat."