High cost of self-referral with no patient benefit

The article, "Urologists Use of Intensity Modulated Radiation Therapy (IMRT) for Prostate Cancer," authored by noted Georgetown University health care economist Jean M. Mitchell, PhD, analyzed Medicare claims from 2005 through 2010 and constructed two samples -- one comprised of 35 self-referring urology groups in private practice and a matched control group comprised of 35 non-self-referring urology groups in private practice, and the other comprising non-self-referring urologists employed at 11 National Comprehensive Cancer Network (NCCN) centers matched with 11 self-referring urology groups in private practice. The study compared the use of IMRT in the periods before and during ownership to evaluate changes in IMRT use according to self-referral status. Among the survey findings:

• Increased Likelihood of Undergoing IMRT. The report concludes that "men treated by self-referring urologists, as compared with men treated by non-self-referring urologists, are much more likely to undergo IMRT, a treatment with a high reimbursement rate, rather than less expensive options, despite evidence that all treatments yield similar outcomes."

• IMRT Utilization Among Self-Referring Urologists Increased Dramatically while Non-Self-Referring Groups Remained Nearly the Same. IMRT utilization among self-referring groups increased from 13.1 percent to 32.3 percent, a 146 percent increase, once they became self-referrers. In contrast, IMRT utilization by non-self-referring urologists, who were peers practicing in the same community-based setting, was virtually unchanged with a modest increase of 1.3 percentage points. Additionally, IMRT utilization among a subset of 11 self-referring urology practices near NCCN centers increased from 9 percent to 42 percent, an increase of 33 percentage points, from the pre-ownership to the ownership period, compared to an insignificant increase of 0.4 percentage points at the NCCN centers.

• Self-Referring Urologists Decreasingly Used Effective, Less Expensive Treatments. Data showed a decrease in utilization of other effective, less expensive treatment options by self-referring urologists, while the study found "virtually no change in practice patterns" for non-self-referring urologists.

"The College of American Pathologists (CAP) applauds the latest research from the New England Journal of Medicine," said CAP President Gene N. Herbek, MD, FCAP. "We also applaud Rep. Jackie Speier (D-CA) for her introduction of the Promoting Integrity in Medicare Act of 2013 (PIMA), H.R. 2914. We agree with Senate Finance Committee Chair Max Baucus (D-Mont.) that 'Enough is enough.' Now is the time for Congress to close this loophole and fix the problem."

Previous Studies Show Similar Costs Associated with Self-Referral

The study comes on the heels of a recent Government Accountability Office (GAO) report, "Higher Use of Costly Prostate Cancer Treatment by Providers Who Self-Refer Warrants Scrutiny," released in early August which also found significant increase in cost and utilization due to radiation therapy self-referral. The report found Medicare expenditures for IMRT services performed by self-referring groups increased rapidly from 2006 through 2010 by approximately $138 million, as compared to a $91 million decrease in the non-self-referral group. During the same time period, IMRT utilization among self-referring groups increased by 456 percent, while the number of IMRT services performed by non-self-referrers decreased by 5 percent. GAO could not attribute any of these findings to patient preferences, age, geographic location, or patient's health status.

Two other GAO reports on advanced diagnostic imaging and anatomic pathology have had similar findings on self-referral, including the study "Action Needed to Address Higher Use of Anatomic Pathology Services by Providers Who Self-Refer," which found that in 2010, providers who self-referred made an estimated 918,000 more referrals for anatomic pathology services than they likely would have if they were not self-referring. CMS estimated these additional referrals cost Medicare about $69 million in 2010.

The studies reveal similar findings to the CAP co-sponsored independent research previously published by Jean M. Mitchell, PhD, in Health Affairs in 2012. The article, "Urologists' Self-Referral for Pathology of Biopsy Specimens Linked to Increased Use and Lower Prostate Cancer Detection," compared Medicare billing practices for anatomic pathology services related to prostate biopsies by self-referring and non-self-referring urologists, and using Medicare's own data, showed that self-referring urologists billed Medicare for 72 percent more prostate biopsy specimens compared to non-self-referring physicians, with no increase in cancer detection. In fact, self-referring urologists had a 40 percent lower cancer detection rate than those who did not self refer despite billing for nearly twice as many specimens.

Additionally, the Office of the Inspector General of the U.S. Department of Health and Human Services, peer-reviewed, published academic studies, as well as recommendations from several bipartisan groups such as the Moment of Truth Project and the Bipartisan Policy Group have all stated the need to narrow the in-office ancillary services (IOAS) exception under the Stark Law.

Need for New Legislation to Amend Stark Law

In response to the GAO radiation therapy report released August 1, 2013, Senate Finance Committee Chair Max Baucus (D-Mont.) said in a statement, "Enough is enough. Congress needs to close this loophole and fix the problem."

Also, on August 1, 2013, U.S. Rep. Jackie Speier (D-CA) introduced legislation, "Promoting Integrity in Medicare Act of 2013," which would amend the Stark Law's IOAS exception by removing anatomic pathology, physical therapy, advanced diagnostic imaging, and radiation oncology from the list of services that may be self-referred under the current exception. It would not change the status of clinical pathology or other services covered by the IOAS exception.