Regulatory Report: Gains Made in Campaign to Limit Self-referral

Twitter icon
Facebook icon
LinkedIn icon
e-mail icon
Google icon

Organized radiology has been devoted to the self-referral issue for more than a decade. Early literature that documented increased physician referral rates for diagnostic imaging when there is a financial incentive led to the Stark laws in the 1990s. Entrepreneurs, venture capitalists, and some medical specialties, however, have exploited opportunities either in the non-Medicare population or by taking advantage of safe harbors in the law, the largest of these being the in-office exemption.

Despite frustrating moments, there are signs that legislators, regulators, and even insurers are finally taking notice. It is useful to take a look back at 2008, review what has transpired, and consider what we may anticipate for 2009.

On the federal front, the ACR lobbying team was successful in getting significant provisions included in the Medicare Improvement for Patients and Providers Act (MIPPA), which averted the 10.5% physician-payment cut mandated by the Sustainable Growth Rate (SGR) rules. These provisions include mandatory accreditation for MRI, CT, PET, and nuclear medicine by 2012 (with private accrediting bodies being named by 2010) and the implementation of an appropriateness-criteria demonstration project to gather and analyze data at the point of ordering and the point of service.

Many of the same conflict-of-interest arguments used against self-referral also are used in attempts to limit specialty hospitals. Significantly, provisions against specialty hospitals were included in three bills on Capitol Hill as a pay-for to fund other programs, including the SGR fix. Although not included in final legislation, the limits indicate that legislators clearly are aware of the conflict of interest. Sen Chuck Grassley (R–Iowa) introduced the Medicare Imaging Disclosure Sunshine Act of 2008 (S 3343), which would have required physicians to inform patients of their financial interests in an imaging facility and provide a written list of other facilities in the area.

On the regulatory side, trying to follow the various proposed and final rules for CMS was particularly frustrating and confusing in 2008. CMS proposed that all imaging centers be subject to IDTF standards in the June review copy of the Medicare Fee Schedule. New IDTF regulations were introduced, which raised the bar for supervision and credentialing. The net result was considered to be a positive step for the anti–self-referral cause.

Unfortunately for the self-referral cause, CMS elected to defer the IDTF changes until a later time in its 2009 Medicare Physician Fee Schedule Final Rule, released on November 1. CMS specifically cited provisions in MIPPA as the reason for the delay. The rule did finalize the anti-markup provision, however. Some experts believe that the provision’s effectiveness is significantly neutered by the IDTF deferral. In the rule, CMS also stated that self-referral was a significant factor in imaging utilization.

CMS did make a number of revisions to the Stark laws that will affect certain commercial arrangements that have developed in recent years. Services addressed include under-arrangement agreements, percentage-based compensation, per-click leasing, and stand-in-the-shoes provisions. A more detailed summary is available from the ACR.

The major obstacle to significant self-referral reform remains the Stark in-office ancillary services exemption. The ACR has argued that high-tech medical imaging, such as CT, MRI, and PET, should not be considered ancillary services. There is increasing evidence that CMS understands and may begin to support this approach. Any limitation to the in-office exemption would be a major win for the cause.

Other Federal Agencies

Several other federal agencies have also weighed in on self-referral. In June, the Government Accountability Office issued a report stating that Medicare spending on imaging services more than doubled between 2000 and 2006, to about $14 billion. In particular, it noted that advanced imaging, such as CT, MRI, and nuclear medicine, far outstripped other imaging services. The analysis cited self-referral as a major driver for the increased expenditures. While the proportion of physicians who self-refer has grown rapidly, more than doubling from 2000 to 2006 (from 2.9 to 6.3 per 100 physicians), it is much higher for certain specialties, such as cardiology. Orthopedics and urology also saw significant increases. The GAO report also stated that geographic variability suggested that