GAO Report Finds Self Referral Responsible for Overutilization and Rising Costs

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Physician self-referral of medical imaging exams is driving up imaging utilization and exposing patients to unnecessary health risks while increasing Medicare costs, according to a report released by the Government Accountability Office (GAO). The report, Higher Use of Advanced Imaging Services by Providers Who Self-Refer Costing Medicare Millions, investigated the role of self-referral in MRI and CT services from 2004-2010.

According to the GAO, providers who self-referred probably made 400,000 more referrals for advanced imaging services than they would have if they were not self-referring in 2010. GAO estimates that these additional referrals cost Medicare approximately $109 million in 2010.

And it is not just a financial issue. The GAO -- while naturally concerned with the financial aspect because of its role in rooting out government waste -- also noted the risks posed to Medicare beneficiaries who are sent for tests they may not need. Unnecessary imaging, especially in the case of CT services, exposes patients to ionizing radiation that has been linked to an increased risk of developing cancer.

From 2004-2010, MRI and CT imaging services both increased, with a large part of that increase driven by self-referred services, the GAO found. According to the report, the number of self-referred MRI services increased by more than 80 percent compared to a 12 percent increase for non-self-referred MRI services. For CT services, the growth of self-referred services more than doubled, while non-self-referred CT services increased by about 30 percent.

On average, self-referring providers referred two times as many of those services than non-self-referring providers, according to the GAO. Differences persisted after accounting for practice size, specialty, geography, or patient characteristics. The report suggests that financial incentives for self-referring providers were likely a major factor driving the increase in referrals.