Doctor Self-Referrals Part of Health-Care Cost Trend

By Shankar Vedantam
Washington Post Staff Writer
Friday, July 31, 2009

In August 2005, doctors at Urological Associates, a medical practice on the Iowa-Illinois border, ordered nine CT scans for patients covered by Wellmark Blue Cross and Blue Shield insurance. In September that year, they ordered eight. But then the numbers rose steeply. The urologists ordered 35 scans in October, 41 in November and 55 in December. Within seven months, they were ordering scans at a rate that had climbed more than 700 percent.

The increase came in the months after the urologists bought their own CT scanner, according to documents obtained by The Washington Post. Instead of referring patients to radiologists, the doctors started conducting their own imaging -- and drawing insurance reimbursements for each of those patients.

In focusing on health-care reform this year, President Obama pledged that a revamped system would hold down exploding costs. But none of the players -- Congress, the administration or the array of interests involved in the process -- has offered a clear path to that goal. And efforts to control medical practices that have driven up expenses, including physician "self-referrals," underscore how difficult it is to alter entrenched patterns.

A host of studies and reports by academics and the federal government shows that physicians who own scanners order many more scans than those who do not. As a result, Americans pay billions of dollars in extra taxes and insurance premiums.

Government panels have found that, across several areas of medicine, ordering more procedures does not improve health outcomes. In the case of medical scans, unnecessary imaging also creates a health risk -- as many as 1 percent of all cancers in the United States appear to be caused by radiation from medical imaging, according to Amy Berrington de Gonzalez, a radiation epidemiologist at the National Cancer Institute.

A lawyer for the Iowa urology practice defended its medical decisions. "The standard of care for a certain category of patients may require a CT scan and the practice may have decided to purchase a CT scan as a result," Victor Moldovan said in an e-mail. "Any assertion that there is some wrongdoing simply because of an increase in scans is unfounded." The urology practice, he added, "understands its obligations very well and complies with all applicable standards."

He noted that in many cases scans must be pre-approved by insurers, "which effectively limits any over-utilization." The Wellmark data compared how often the urologists and equivalent physicians in the region ordered scans. Before their scanner was installed, the urologists ordered fewer CT scans than the other doctors. Afterward, the urologists ordered more than three times as many as the other doctors.

Critics of self-referral say that, just as doctors are not allowed to write prescriptions and then sell medications, they should not profit from imaging. Congress, as part of health-care-reform efforts, is considering a proposal, championed by Reps. Jackie Speier (D-Calif.), Anthony Weiner (D-N.Y.) and Bruce Braley (D-Iowa), to prohibit the practice. Maryland is the only state that bans self-referrals, but the law is rarely enforced.

Physicians, medical associations and imaging-device manufacturers argue that allowing doctors to own and operate scanners increases patient convenience and allows quicker diagnoses.

"It is important for legislators not to take tools out of the hands of doctors," said Jim York, an orthopedic surgeon and president of the Maryland Patient Care and Access Coalition, a group fighting to allow physicians to operate their own scanners.

Detailed analyses by several peer-reviewed researchers, the Government Accountability Office and an independent congressional agency known as the Medicare Payment Advisory Commission, or MedPAC, show that, while self-referrals might improve care and convenience in some cases, that is not the case nationally.

The issue was ostensibly settled in 1992 when the Stark Law was enacted. The legislation prohibited physicians from referring patients to the doctors' own scanning devices. The law offered an exception, however, for physicians whose scanners were in the same office building as their practice. The exception was designed to allow doctors to keep small X-ray machines to quickly figure out, for example, whether a limping patient had a sprain or a fracture.

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