The Self-Referral Issue

1. The Self-Referral Issue David C. Levin, M.D. NCQDIS, 12/2/04

2. If nonradiologists are allowed to self-refer, overutilization inevitably results

3. Frequency of imaging per episode of illness *Hillman, JAMA 1992; 268: 2050

4. U.S. GAO Report, “Referrals to Physician-Owned Imaging Facilities Warrant HCFA’s Scrutiny”, 10/94 • Compared rates of imaging for MDs having in-practice imaging equipt with rates for other MDs who referred elsewhere. • Based on Medicare claims covering 19.4 million office visits & 3.5 million imaging studies in FL during 1990. • Ratios of imaging rates, self-referrers/outside referrers:

5. % changes in Medicare utilization (proc/1000) & RVU rates, 1993-2002, among radiologists, cardiologists, all nonradiologists % change

6. % Changes in RMPI Utilization Rates, 1998  2002, Among Radiologists, Cardiologists, & Other MDs % change

7. Did the much more rapid growth in utilization of RMPI among cardiologists substitute for cardiac cath or stress echo? • From 1998 to 2002, cardiac cath utilization rate  19.5%. • Stress echo utilization rate  22.0%.

8. % Increases in Medicare Reimbursements for MRI, 1997  2002 % increase

9. Effect of Financial Incentives on Test-Ordering in an Ambulatory Care Center • Examined lab and x-ray ordering habits of 15 MDs in a for-profit ambulatory care center in Boston. Lab & x-ray were on-site. • Prior to 1985, the MDs were paid a flat salary. • During 1985, financial incentives were introduced, which allowed MDs to earn bonuses based upon revenues they generated. • 3 winter months of 1984-85 (before) and 1985-86 (after) were compared. • 11 of 15 ordered more x-rays in ’85-86; overall utilization by the group  by 16%. • 13 of 15 ordered more lab tests in ’85-86; overall utilization by the group  by 23%. *Hemenway, NEJM 1990; 322: 1059

10. Effect of On-Site Radiology Facilities on Frequency of Chest X-Rays • Assessed use of x-ray in 2 facilities operated by a single family medicine dept at the Univ of Western Ontario. One had on-site x-ray equipment; pts at the other were referred to an outside radiology office. • No financial link between the family physicians and the radiology service. • Pts had chest-related diagnoses. • Pts seen at the facility having on-site x-ray were 2.4X as likely to have a chest x-ray. • The family medicine residents’ hand-written impressions differed from the final radiology report in 23.5% of cases (usually overcalls). *Strasser, J Family Practice 1987; 24: 619

11. Levin DC & Rao VM. Turf Wars in Radiology: The Overutilization of Imaging Resulting From Self-Referral. JACR 2004; 1: 169-172….[March 2004] 2) Levin DC & Rao VM. Turf Wars in Radiology: The Quality of Interpretations of Imaging Studies by Nonradiologist Physicians – A Patient Safety Issue? JACR 2004; 1: 506-509….[July 2004] 3) Levin DC, Rao VM, Orrison WW Jr. Turf Wars in Radiology: The Quality of Imaging Facilities Operated by Nonradiologist Physicians and of the Images They Produce. JACR 2004; 1: 649-651 …. [Sept 2004]

12. If nonradiologists are allowed to interpret images, they will make lots of errors i.e. the quality issue on the professional side

13. PERFORMANCE ON A STANDARDIZED SET OF CHEST X-RAYS • 3 panels • 29 radiology residents • 111 board-certified radiologists • 22 nonradiologists (from 7 private practice & 6 academic medical groups) • 30 normal cases, 30 abnormals (infiltrates, pneumothoraces,masses, cardiac abnormalities) • ROC curves calculated for 5 physician categories: (1) top 20 radiologists, (2) bottom 20 radiologists, (3) all board-certified radiologists, (4) radiology residents, (5) nonradiologists. *Potchen, RADIOLOGY 2000; 217: 456

14. Potchen, RADIOLOGY 2000; 217: 456

15. Areas Under the ROC Curves (All Results Differ Statistically from Each Other) *Potchen, RADIOLOGY 2000; 217: 456

16. ACCURACY OF INTERPRETATION OF HEAD CTs IN THE ER BY EMERGENCY PHYSICIANS • 555 pts underwent head CT via the ER. • Scans interpreted first by an ER MD, then by a radiologist. • Nonconcordance in 206 cases (39%). • Potentially significant misinterpretations by ER MDs in 131 (24%). • Major misses: infarcts, masses, cerebral edema, parenchymal hemorrhage, contusions, subarachnoid hemorrhage *Alfaro, Ann Emerg Med 1995; 25: 169

17. 1) Levin DC & Rao VM. Turf Wars in Radiology: The Overutilization of Imaging Resulting From Self-Referral. JACR 2004; 1: 169-172….[March 2004] 2) Levin DC & Rao VM. Turf Wars in Radiology: The Quality of Interpretations of Imaging Studies by Nonradiologist Physicians – A Patient Safety Issue? JACR 2004; 1: 506-509….[July 2004] 3) Levin DC, Rao VM, Orrison WW Jr. Turf Wars in Radiology: The Quality of Imaging Facilities Operated by Nonradiologist Physicians and of the Images They Produce. JACR 2004; 1: 649-651 …. [Sept 2004]

18. If nonradiologists are allowed to perform imaging, the quality of the studies is likely to be poor i.e. the quality issue on the technical side

19. Quality Assessment of 562 Imaging Sites by a Health Plan (Single State) • Inspection by an RT – used a standard checklist. • Findings reviewed by a multispecialty panel of 15 physicians (radiologists, orthopods, neurologists, FPs, chiropractors, podiatrists). • For a problem to be considered a deficiency, the panel had to unanimously agree. • 90 of the 562 refused to participate. Carrier may drop them from reimbursement. • Of the remaining 472, 149 (32%) failed with 1-9 deficiencies. Orrison, Radiology 2002; 225(P):550 [abst]

20. Failure Rates

21. 1) Levin DC & Rao VM. Turf Wars in Radiology: The Overutilization of Imaging Resulting From Self-Referral. JACR 2004; 1: 169-172….[March 2004] 2) Levin DC & Rao VM. Turf Wars in Radiology: The Quality of Interpretations of Imaging Studies by Nonradiologist Physicians – A Patient Safety Issue? JACR 2004; 1: 506-509….[July 2004] 3) Levin DC, Rao VM, Orrison WW Jr. Turf Wars in Radiology: The Quality of Imaging Facilities Operated by Nonradiologist Physicians and of the Images They Produce. JACR 2004; 1: 649-651 …. [Sept 2004]

22. Imaging Utilization Skyrocketing in Boston? • Harvard Pilgrim Health Care of MA (750,000 members) saw a 62% increase in use of advanced imaging studies in 2 years. • Tufts Health Plan saw a 48% increase in all imaging between 2000 & 2003. • BCBS of MA saw a 20% increase in MRIs and a 25% increase in CTs from 2002 to 2003. L. Kowalczyk, Boston Globe, 2/27/04

23. “An MRI Machine For Every Doctor? Someone Has To Pay” – R. Abelson, N.Y. Times, 3/13/04 • In Syracuse, NY the number of MRIs has grown by 1/3 in 3 years. • In the past year alone, utilization of MRI studies  by 23%. • “Unfortunately it’s the business community that pays for these” – John Driscoll, local business leader. • In NY, hospitals must get CONs for MRIs but private physician offices don’t have to. • “I don’t think you should limit the use of technology [and] competition” – Michael Vella, MD, head of a 23-physician orthopedic group that installed 2 MRIs and a nuclear camera in their office.

25. “Financial Pressures Spur Physician Entrepreneurialism” • Based on 270 interviews during 2003 with senior MD & non-MD leaders of hospitals, health plans, physican groups. • “A common theme across markets was that harsh business realities had left physicians feeling financially beleagured, forcing them to become more business oriented.” • “Investment in ancillary services (such as imaging or laboratory testing) was mentioned by the most respondents as a major strategy among physicians in their market.” • “Physician strategies threaten to raise costs for public and private payers through increased use.” • “….physician self-referral and antikickback laws regulating potential conflicts of interest include exemptions that may deserve reexamination.” * Pham HH et al, Health Affairs 2004; 23: 70-81

26. MedPAC Report to the Congress3/6/03 • Assessed growth in medical services between 1999-2002 w/i the Medicare program. • Divided services into 4 categories: E&M, procedures, imaging, and tests. • Avg annual growth, 1999  2002: • E&M: 1.8% • Procedures: 4.1% • Tests: 5.6% • Imaging: 9.0%

27. Blue Cross Blue Shield Assoc. Report10/14/03 • Dx imaging costs in the U.S. were approx $75 billion in 2000 and are forecast to  to $100 billion by 2005. • Between 1999 and 2001, growth in the various areas of outpt Dx imaging was as follows: • X-ray 18% • US 23% • CT 45% • MRI 47%

28. A Possible Plan of Action – could be adopted by payers (assumes no action by fed or state govts) • Mandatory accreditation &/or site inspections of all imaging facilities. • Limitation of imaging privileges among nonradiologists.[see Verrilli, Radiology 1998; 208: 385 & Moskowitz, AJR 2000; 175: 9] • Precertification -But only for those studies not referred to radiologists (and therefore presumably self-referred). • Auditing of referring MD records to see if pt Hx matches the indications shown on the precert requests. • Benchmarking of referring MDs • Pay less for self-referred studies by nonradiologists (or don’t pay at all). • Institute (or reinstitute) CON laws. * Levin DC & Rao VM, JACR 2004; 1: 806

29. MedPAC Report to the Congress, “New Approaches in Medicare”, June 2004, pp 95-117: approaches being considered for the problem of rapid rises in imagingcosts • Preauthorization (i.e. precert) • Coding edits - Reduce payments for multiple studies - Pointed out that 40% of CT claims included 2 or more studies at the same time • Profiling physicians to compare frequency of utilization • Beneficiary education re risks of radiation exposure • Safety & technical standards – could include site inspections for quality of equipment & images, and qualifications of staff • Privileging - Payments limited to only those physicians qualified to perform imaging • Differential payment related to ability to meet performance standards

30. Maryland Health Occupations Article§1-301 (k)(2), 1993 • Prohibits self-referral but has an exception for “in-office ancillary services’, similar to the Stark law. • But this exception specifically does not include MRI, CT or radiation therapy. • Maryland AG comment on 1/5/04: “In our opinion, state law bars a physician in an orthopedic group practice from referring patients for tests on an MRI machine or CT scanner owned by that practice, regardless of whether the services are performed by a radiologist employee or member of the practice or by an independent radiology group. The same analysis holds true for any other non-radiology medical practice.”

31. Highmark BCBS Privileging Program (8/04) • All studies must have written reports. • QC and radiation safety programs required. • Current state inspection, calibration report, or physicist’s report required. • Automatic processing. • Accreditation by the appropriate accrediting body (e.g. ACR, AIUM, ICANL, ICAVL). • Services on leased equipment are not covered unless lease is on a full time basis. • To do MRI, CT, or fluoro, the practice must provide at least 5 different imaging modalities (e.g. plain films/DEXA, mammo, US, echo, CT, MRI/MRA, fluoro, nuc med/nuc cardiac). • A radiologist must be on-site during all normal business hours.