Saturday, December 22, 2007

HCFA Decries Self-Referral, Circa 1999

Googling "self-referral" brings up many interesting articles. Here are some exerpts from the testimony of Kathy Buto, who was then Deputy Director, HCFA Center for Health Plans & Providers U.S. Department of Health and Human Services, before the House Ways & Means Health Subcommittee on May 13, 1999:


Chairman Thomas, Congressman Stark, distinguished Subcommittee members, thank you for inviting us to discuss limits on physician self-referrals for Medicare and Medicaid beneficiaries. These limits were enacted into law, with leadership from this Subcommittee, to prevent increased program costs and potential harm to beneficiaries from unnecessary tests and treatments. They are based on numerous studies showing that physicians made far more referrals when they had a financial interest in a testing or treatment facility. Some studies also found higher prices and lower quality with self-referrals. The American Medical Association has declared self-referral unethical in most instances. . .

Concern about the ethical risks inherent in physician self-referral dates back at least to a 1986 Institute of Medicine study. A 1989 HHS Inspector General study documented that physicians who owned or invested in independent clinical laboratories referred Medicare patients for 45 percent more laboratory services than did physicians who did not have such financial interests. In 1991, the American Medical Association Council on Ethical and Judicial Affairs concluded that physicians should not refer patients to a health care facility outside their office at which they do not directly provide services and in which they have a financial interest. And in 1992, the American Medical Association House of Delegates voted to declare self-referral unethical in most instances.

So, Stark and HCFA, now CMS, had a pretty good understanding about self-referral, even back in 1999. And there was even a reasonable approach proposed:

We have taken steps in our proposed regulations to clarify the law and create appropriate flexibility. One of the most important provisions establishes that referrals to an entity with which a physician has a compensation arrangement are generally permissible as long as the compensation is at "fair market value," furthers a legitimate business purpose, and is not tied to the volume or value of physician referrals. This exception goes a long way in simplifying the policy under the law.


They were off to a pretty good start, weren't they? But somehow things got lost in the translation, and we have the mess created by "shysters and promoters" looking for ways through the Stark I and II loophole, as Stark himself phrases it.

But, keep it simple, and even doctors will be able to understand it. How about Dr. Reicher's "No machine fee for self-dealing in medical imaging." That's pretty simple, too, and right to the point.

Friday, December 21, 2007

Why Radiologists Should Avoid Imaging Self-Referral

Radiologists who read studies for self-referrers try to explain away their behavior with excuses like these:

"They will buy the scanners anyway, so we might as well read for them, and thereby not anger them and lose other business."

"The patients deserve the best reads that only we can provide."

"If we don't read for them someone else will..."

Here's the answer from an anonymous source who makes a great deal of sense:
The answer is that you can never justify doing something wrong because somebody else will if you don't. That condition is always true and always will be true, and could be used to rationalize any nefarious act. This type of logic didn't hold water at Nurenberg and still doesn't.

You can't live your life according to what other people might do. You can only control what you do and face the consequences. The consequences of refraining from unethical medical practice is that you gain self-respect. You may, in the very short term, sacrifice 10% of an income that already places you among the top of U.S. incomes and among to top medical specialists. You might slip a little in the short run. In the long run, you will do better financially by not participating.

The consequences of participating is that you lose self-respect, and must live with the constant understanding that at some point you are going to have to explain all of this to your family, friends, and community. And despite the positive very short term finanicical consequence of participating, you should realize that the long term negative consequences have already hit you and will only get worse--in that you have already suffered a 10-30% in CT, MRI, and PET reimbursement because of radiologists widespread participation in self-referral.

Think about it.

Sunday, December 16, 2007

GE Promotes In-Office Imaging



This little ad on GE's website really says it all. Let me quote:

Expand your practice with in-office CT


More continuity. More convenience. More ways for your practice to succeed.

There are compelling reasons to add CT imaging to your practice.

First and foremost? Enhanced patient care. The ability to identify a potential problem and then confirm or rule it out with a CT exam conducted in your own office – perhaps on the same day – improves the convenience, timeliness and continuity of care your patients receive.

In-office CT also provides a highly credible and effective means of differentiating your practice from others in your market. It places you on the leading edge of patient care and may engender positive word-of-mouth that has the potential to increase your revenue opportunities significantly.

GE’s comprehensive resources can help you get started

As you consider the decision to bring a CT scanner into your practice, the question is: how do you optimize its implementation and avoid any missteps along the way?

GE Healthcare can help. We understand medical practices and have years of experience in helping independent healthcare providers make smart equipment investments.

Moreover, GE offers the industry’s most comprehensive portfolio of resources to address your needs. We have the people and the programs in place to guide you through the critical issues surrounding CT acquisition, including:

  • Evaluating feasibility based on in-depth market assessment
  • Conducting cash flow analyses for a clear ROI picture
    Selecting the right scanner for your patient volume and procedure mix
  • Creating customized floor plans for your installation
  • Setting realistic design and construction timelines
  • Assisting with short- and long-term staffing solutions
  • Offering a range of financing instruments
  • Providing training, maintenance and service support


With GE by your side, you can concentrate on your practice, secure in the knowledge that an experienced team of professionals is guiding your CT implementation.

Wow. Doesn't that just make you feel all warm and fuzzy inside? GE is at the side of the self-referrers, guiding them down the path of, well, you know.
I have the feeling that it was the equipment companies that started this lovely trend in the first place, way back when. I don't think most docs would have thought of putting CT's, MRI's, or PET scanners in their offices without a little help from the folks that sell them. Why not have a complete GE small appliance selection for the "patient's convenience"? Perhaps a GE-designed car-wash in the back? They ARE doing this for the patients aren't they? Well, I do have to give GE credit for being honest...about "the potential to increase your revenue opportunities significantly."
Remind me to buy Philips light bulbs next time I go to Safeway.

The Excuses for Self-Referral

Those who practice imaging self-referral always have an excuse for their actions. Here are some of the most common, along with some possible rebuttals.

1. Having imaging in the office is sooooooo convenient for my patients. Just ask them and they will tell you how much they appreciate it. They don't mind that I own the equipment.


The vast majority of self-referring clinicians schedule imaging at different time than the patient's clinical appointment. Thus, the patient has to make two trips anyway. How is that more convenient? Those places that do schedule the imaging on top of a clinical appointment run in a "just in time" fashion that puts undue stress on whoever is reading the study to get the interpretation out fast, which can lead to mistakes. Does this "convenience" outweigh the danger? And what if your patient has to go to the hospital? The potentially life-saving comparison images might be locked up in your office PACS, unavailable to those trying to take care of your patient for you.


2. Clinicians have lost income over the years and deserve to get it back any way they can.


If I lose money in the stock market, am I allowed to rob a bank? How did this entitlement mentality arise?


3. Advanced imaging helps me make decisions, and so it should be considered an ancillary service just like a chest x-ray.


But why does that warrent having a $2 Million scanner in your office?


4. Yes, my December volume is really high. The patients ask me to get their scans done before the end of the year since they have already met their deductables. I'm just helping them out.
And it's so much easier to collect from the insurance companies instead of the patients themselves, isn't it?


5. How dare you accuse me of ordering extra scans! Each scan I order is justified!


Perhaps, but then why do self-referring clinicians order from 2 to 8 times as many scans as those who don't self-refer? Are the latter group of doctors not taking proper care of their patients?


6. How can you call my equipment inferior? The radiologists that read my studies don't complain!


Maybe they should complain. Sounds like they are too timid to offend their revenue source.

7. What do you mean I might be causing cancers by ordering extra scans! The radiologists didn't warn me about that! Everyone says CT is safe!


Again, maybe they should be raising some warnings. All it's going to take is one good lawyer seeing a goldmine in this issue, and a lot of heads will roll.


9. I'm not hurting anyone. I only scan people with insurance.


And you send those without insurance to the hospital, having skimmed the cream for yourself.

9. If I'm doing such a bad thing, why are there lots of radiologists and equipment companies standing in line to help me do it?


Because there are always people out there willing to exploit a loophole in the law if they see a dollar at the end of it.


10. But the law allows me to do it!


You mean the loopholes in Stark I and II. Stark never intended for you to have anything beyond an x-ray and an ultrasound machine in your office.
11. So what are you going to do about it?


That's the big question, isn't it?

Monday, December 10, 2007

Two States Fight Imaging Self-Referral

Some states appear to understand the problem of self-referral, and are willing to do something about it. Let's hear it for Maryland and West Virginia, who seem to be at the forefront of the battle.

As reported in amednews.com, a Maryland court has upheld a rule banning non-radiologists from self-referring for in-office imaging.

The court battle ensued when a group of 14 medical practices challenged the board last December. The plaintiffs -- comprising orthopedic surgeons, urologists and emergency physicians -- are part of the Maryland Patient Care and Access Coalition, which was formed to advocate for the issues at stake in the case. The doctors say state authorities misread the law and several exemptions within it that allow in-office referrals for ancillary services, including imaging tests.

The court noted, however, that the statute's definition of ancillary services "specifically excludes MRI and CT scans for all doctors except radiologists" -- a delineation that "forecloses the two other exceptions."

But don't think the self-referrers will take this lying down:

Baltimore orthopedic surgeon Andrew N. Pollack, MD, said quality of care and patient convenience are improved when physicians have immediate access to the diagnostic testing.

"[Physicians] can get the information they need in evaluating the patient, whereas radiologists as third parties do not have the same background on the patient's condition," said Dr. Pollack, past president of the Maryland Orthopaedic Assn. and member of the American Academy of Orthopaedic Surgeons, which filed a friend-of-the-court brief in the case.

I thought radiologists were physicians. Here is what they have to say:

"Despite the intentions [of Maryland's self-referral law] to disarm this inherent conflict of interest, overutilization still exists, causing the cost of health to rise dramatically and exposing patients to unnecessary medical procedures," states the Maryland Radiological Society in a friend-of-the-court brief. The American College of Radiology supported the state chapter. Both groups declined to comment.

The radiologists also argue that they are better trained to interpret imaging than non-radiologists. The medical board in its opinion cited examples showing patients rarely benefit from getting tests on the same day of an appointment or at the same location as the referring physician.

The Charleston, West Virginia, Gazette, from December 9, has a somewhat similar story:

West Virginia doctors won’t be putting expensive diagnostic imaging equipment in their offices anytime soon.

Gov. Joe Manchin has rejected a state Health Care Authority-approved plan to let physician offices buy and install CT scanners, saying the proposal didn’t ensure that doctors would accept low-income patients unable to pay for digital X-ray services.

“He wanted to make sure that everyone who has these operates on a level playing field,’’ said Manchin spokeswoman Lara Ramsburg. “Otherwise, you’re giving an unfair advantage to one group over the other.’’

Hospitals are required to provide CT scanning services to all patients, including those without insurance and those covered by Medicaid.

“If the governor is sending this back to the authority to look at Medicaid, the uninsured and underinsured, that’s something that will be beneficial to patients,” said Joe Letnaunchyn, president of the West Virginia Hospital Association. “This will start to address the issue of a level playing field. Hospitals are providing care 24/7 to all patients.”

. . .Hospital executives say the proposal to allow doctors to have CT scanners will siphon away business, costing them tens of millions of dollars a year. CT scanning is one of the few profitable services that hospitals provide.

Again the self-referrers bleat the same refrain:
Doctors argue that more imaging machines would save lives, allowing them to diagnose diseases earlier.

And make them more money, but I guess that doesn't sound as good to their patients and the public.

The tide is turning, folks.

Monday, December 03, 2007

Stark Not Happy With His Laws

There is a pretty good interview in Forbes with Congressman Fortney Pete Stark, who wrote the Stark laws about self-referral. He is disappointed that all he did was make doctors jump through the loophole in the law to keep self-referring.

The Congressman had his doubts at the time: "I didn't think there was such a big deal. So the doctors wanted to make some extra money..." But then a study in Florida showed how much these self-referral arrangements were being abused. Some doctors would send every patient in for an X-ray at facilities they owned.
While the law's intent was good, the law banning these businesses might have done more harm than good, he says now: "It gave every shyster and promoter a loophole." A whole industry of Stark-compliant businesses was born--not unlike the sector devoted to tax avoidance. Stark had to rewrite and clarify the laws in 1995, and there's still debate about it. Currently Congress is looking into regulating the use of imaging machines in doctors' offices and fighting over banning doctor-owned specialty hospitals. "We now have to keep rewriting the laws like the tax code," Stark says.

Some of the comments urge him to keep going and fix the problems. We can all only hope he does so.

Friday, November 16, 2007

How The ACC Sees It
...a matter of Spin

Click Image to animate

Image credit: www.lsus.edu/sc/math/rmabry/knots/2spin2.gif

While surfing the 'Net for an scrap of information, I stumbled upon an interesting page from the American College of Cardiology. Exerpted below are two pertinent paragraphs:


West Virginia Cardiologists Continue Battle for Freedom of Imaging

Ganpat G. Thakker, M.B.B.S., F.A.C.C., President, West Virginia Chapter of the American College of Cardiology, this week carried his campaign for freedom of cardiovascular imaging to the Charleston Gazette. In a letter to the editor Dr. Thakker pointed out that the Centers for Disease Control and Prevention reported last week that West Virginia citizens have the highest rate of cardiovascular disease in the United States. Cardiologists are dismayed that the West Virginia Legislature may vote to make it more difficult for patients to obtain needed cardiovascular services from their physicians. SB 266 and HB 2652, currently before the Senate and House Judiciary Committees, would let the state decide whether a physician can purchase computed tomography (CT) equipment. Both committees are expected to vote on this legislation soon.


Maryland Cardiologists Support Amendments to Self-Referral Law

Roger Leonard, M.D., F.A.C.C., President, Maryland Chapter of the American College of Cardiology, presented a statement this week to the Maryland House of Delegates Health and Government Operations Committee supporting HB 849. That bill would amend the state's restrictive self-referral law by removing MR, CT and radiation therapy services from the in-office ancillary exception for group practices in rural areas. Orthopaedic surgery is expected to support the bill while radiology's strong opposition is anticipated. In his statement Dr. Leonard argued that both the growth of imaging technology and patient access to improved techniques were unforeseen when the General Assembly passed the Maryland Self-Referral Law in 1993. Cardiac MR and CT have now become central to the safe and effective diagnosis and treatment of heart disease.

"Cardiologists are dismayed that the West Virginia Legislature may vote to make it more difficult for patients to obtain needed cardiovascular services from their physicians." Gee, that sounds an awful lot like the arguments AMIC puts forth to convince Congress of the need to amend DRA-2005. Listen to this quote from the debate in the West Virginia Lesislature over SB 266:
Senator Evan Jenkins attempted to amend the rule again by deleting the entire section prohibiting physician to physician referral. He argued strongly that a vote against his amendment would be a vote in favor of bigger government intrusion into the private practice of medicine, negatively impact access to patient care, negatively impact patient convenience and pose higher costs to patients by restricting competition.
My, but this sounds really, really familiar, doesn't it? How can we use the same arguments, but hope to achieve different results?

Thursday, November 15, 2007

"Trying to Regulate Imaging Self-Referral is Like Playing Whack-A-Mole"

Dr. Bruce Hillman authored the article "Trying to Regulate Imaging Self-Referral is Like Playing Whack-A-Mole" in the August issue of the AJR. The piece actually reviews and comments on another article, "The Prevalence Of Physician Self-Referral Arrangements After Stark II: Evidence From Advanced Diagnostic Imaging" from the April 17, 2007 edition of Health Affairs, by Dr. Jean M. Mitchell, a professor of public policy at Georgetown University.

Dr. Mitchell undertakes an analysis of imaging self-referral by sifting through data from a "large insurer in California". Her conclusion:


Nearly 33 percent of providers who submitted bills for magnetic resonance imaging (MRI) scans, 22 percent of those who submitted bills for computed tomography (CT) scans, and 17 percent of those who submitted bills for positron-emission tomography (PET) scans were classified as “self-referral.” Among them, 61 percent of those who billed for MRI and 64 percent of those who billed for CT did not own the imaging equipment. Rather, they were involved in lease or payment-per-scan referral arrangements that might violate federal and state laws.

Dr. Mitchell conducts a scholarly analysis of the data to come to her conclusions, and I won't try to reproduce it here. What is quite interesting, however, is the commentary to her article published on the HealthAffairs website. None of the letters were complementary, and one from a neurologist who self-refers was outright contrary:

I believe this article takes a simplistic, one-sided look at self-referral. Our private practice group has had MRI services since 1987, and we feel that we are saving health care costs. Two primary reasons: 1. Third-party insurers pay us much less than the local hospital system; 2. In-office MRI expedites diagnosis and reduces hospitalization rates. Abuses of the system should be curbed but not in a way that monopolizes services and prevent unique practice arrangements that foster excellent patient care.

Yeah, that old patient convenience and dead-granny argument. But saving the insurance companies money? Let's use an arbitrary figure and assume the outpatient charge is HALF of what a scan might cost in the hospital. (This I believe grossly overstates the discrepancy, but go with it.) So, if our self-referring friends order from 2-8 times what they would if they had to send the patients to the groady old stinky hospital, they aren't saving anyone anything at all.

More amusing is a comment from none other than Tim Trysla, "Counsel, Access to Medical Imaging Coalition." That would be the head of AMIC, folks, our ACR-sponsored lobby to help the self-referrers maintain their profits. (OK, I'll be fair and note that AMIC was supposed to help radiologists with outpatient imaging centers, too, but when you lie down with dogs, you get up with dog-hair in your mouth as well as fleas.) Here is Mr. Trysla's eLetter:

We have reviewed the article in Health Affairs on equipment leasing and are hopeful that the author will release the underlying study data so that her peers can replicate her analysis. Since its inception, the Access to Medical Imaging Coalition (AMIC) has worked with policymakers with the goal of ensuring appropriate utilization of medical imaging services. Unfortunately, the Health Affairs article does not offer any data on the appropriateness of the imaging procedures it analyzes -- which is the key to crafting responsible and sustainable policies on access to medical imaging services.

Without having access to the author's data, it is impossible to know if the conclusions she has drawn are reflective of the facts. However, if the arrangements described in the Health Affairs article are in violation of federal or state law, those violations of the law should be prosecuted.

AMIC looks forward to continuing to work with the Congress to enact a reasonable Medicare imaging policy that preserves and strengthens beneficiary access to the right imaging procedure at the right time.

Gee, if he applied any more spin to the situation, he would have the worst case of vertigo in the room. Note the usual political tactic of trying to discredit Dr. Mitchell's data. I'm not sure what data Tim feels is missing here. Oh, yes, the appropriateness data. Well, you know, that is really the crux of the entire self-referral debate, isn't it? Every patient that makes it through the door of a specialist, say a neurologist, has some symptom related to that specialty, such as the neurological system in this example. Therefore, a head CT could be considered appropriate for every last one of them. So, why does the data (from this and other sources) show an increase in the number of scans ordered when the doc can profit from it? Are those in a non-self-referring situation neglecting their patients, or is the system being abused? I guess it is appropriate for a bank-robber to ply his trade at banks, since that is where the money is. Every scan can be justified on an individual basis, and I'm sure Tim knows that. But when you have a massive shift in ordering behavior, something is very wrong.

Dr. Hillman furthers the argument, and even notes that his own research prompted a "change in the opinion of the American Medical Association Council on Ethics and Judicial Affairs (AMA CEJA) on physician conflict of interest and self-referral arrangements":

Physicians are free to enter lawful contractual relationships, including the acquisition of ownership interests in health facilities, products, or equipment. However, when physicians refer patients to facilities in which they have an ownership interest, a potential conflict of interest exists. In general, physicians should not refer patients to a health care facility which is outside their office practice and at which they do not directly provide care or service when they have an investment interest in that facility. The requirement that the physician directly provide the care or services should be interpreted as commonly understood. The physician needs to have personal involvement with the provision of care on site.


Personal involvement by a self-referring clinician with an on-site scanner? Yeah, right. I've never seen that happen, and neither has anyone else in this venue. You would think this closes the book, but of course it does not. Stark II was supposed to keep this stuff at bay, but it didn't. Hillman notes:


The in-office exception to the Stark II regulations and state laws, on which the arrangements described by Mitchell are based, conveys the right of physicians to maintain imaging capabilities—expected at the time of the bill’s passage to be largely plain X-ray and sonography—in their office practices. While hard to rationalize even then, given the research results, the exception recognized the political reality of how difficult it would be to pass the legislation if the law did not contain this exemption.

It would have made no sense to remove X-ray and U/S from clinicians' offices, because in most cases, those clinicians are actually reading and using those studies themselves, in other words, they are directly involved. Just like the AMA suggests. But because scanners have become cheaper and easier to place in an office setting,

Equipment manufacturers have taken advantage of these trends to market high-tech imaging devices to physicians on the basis of their projected financial return.

In fact, the acquisition of high-tech imaging capabilities has become the favored approach of nonradiologists’ practices to replace lost revenue from declining reimbursement for their traditional services [6]. In pretty much all regions of the United States, physicians are becoming more entrepreneurial, even to the point of ceasing to provide poorly reimbursed traditional services in favor of higher-paying services such as imaging. Many are outsourcing interpretations to radiologists—at lower rates than they are receiving from insurers—and making a profit on the professional fees as well. Elevated technical fees for imaging are promoting this activity and facilitating the kinds of lease-by-the hour and “pay-per-click” arrangements described by Mitchell, which are in direct conflict with the AMA opinion detailed above and, as Mitchell notes, quite possibly with existing anti-self-referral legislation.

But, but, but....it's for my patients' convenience! Granny will die if she can't get scanned on my in-office money printing press, I mean CT scanner!


. . .such arrangements cannot be rationalized on the basis of quality of care, convenience, access to care, or any of the other explanations commonly offered by the apologists for self-referral. It’s about the money and, if we accept that physicians are susceptible to financial incentives, in conflict with yet another AMA CEJA opinion addressing conflict of interest:

"Under no circumstances may physicians place their own financial interests above the welfare of their patients. The primary objective of the medical profession is to render service to humanity; reward or financial gain is a subordinate consideration. For a physician to unnecessarily hospitalize a patient, prescribe a drug, or conduct diagnostic tests for the physician’s financial benefit is unethical. If a conflict develops between the physician’s financial interest and the physician’s responsibilities to the patient, the conflict must be resolved to the patient’s benefit [7].


Sadly, Hillman ends on a disheartening note:
Given Mitchell’s [1] demonstration of the susceptibility to self-referring physicians to placing their own financial interests above patients’ health interests, it’s hard to be sanguine about the prospects for further regulation improving on the situation. As a sympathetic health economist once said to me, “Finding ways around regulation is the American national past-time” (Albert Williams, PhD, The RAND Corporation, personal communication, 1985). Closing the Stark II in-office exception is a noble regulatory goal, however, we must recognize that there are limitations to what regulatory actions can accomplish. History tells us that even if a Stark III were to pass Congress, there almost surely will be adverse and unintended consequences.

Hence, the Whack-A-Mole analogy. The ugly little critter just keeps popping up somewhere else. In other words, if we staunch the financial hemorrhaging from imaging self-referral, those who are willing to suspend their morals enough to participate will find some other way to pillage the system. No doubt that is true. However, to carry the analogy a bit further, this mole needs to be whacked with a really big hammer, and really hard. There needs to be prosecution, and punishment, with fines, revocation of licenses, and even jail-time. But of course that won't happen, because the practice is so wide-spread, and there is so much money involved. We are seeing more litigation of sham leasing arrangements, as noted in this blurb from the AMA, but there is a long way to go. A very long way.

The worst part of this whole fiasco is that the patients have become pawns in a big financial game. They trust their clinicians, which is as it should be, and they hang on every word they are told. They truly believe it when they are told that they need a scan, and that it is best if they have it right here in the office, which is after all so very convenient. I have heard patients request to have their scans done at the hospital, and be told that their doctor "would be mad" if they did so. This is a complete abuse of the power a physician has over his patient, and if my own position wasn't so precarious in all this, I would have brought the gentleman in question before the medical board.

Because of the wording of Stark II, many clinicians act as if it is their God-given right to buy a surplus East German CT and run it until the rotor melts, and that radiologists should be ever-so-grateful to read the blurry scans produced in this manner. What we are fighting is the mentality of entitlement, and that is something that seems to be drilled into four-year-olds and physicians in this country with equal vigor. I haven't a clue as to the solution. Except perhaps a bigger whacking hammer.

Tuesday, October 16, 2007

From the "Duh!" Department
...Study finds high utilization rate on scanners owned by self-referring physicians

Image courtesy of http://www.tomgpalmer.com

Diagnostic Imaging magazine online today reviewed this article from the upcoming issue of Radiology. (The link will work if only if you already have online access to the Grey Journal.)

To make a long story and article short, the team from the Institute of Technology Assessment at Massachusetts General Hospital "analyzed more than 526 million claims filed between 1999 and 2003 with an employer-based health insurance plan having about four million members." Dr. G. Scott Gazelle, lead author, took a slightly different approach than some other researchers in this field:
We chose to look at same-specialty referral instead of just self-referral because "self-referral" may represent referral to one's partners or colleagues. This broader definition may have resulted in the inclusion of some physicians with no financial or other relationship with the referring physician and may thus have reduced the magnitude of the observed increase in utilization (ie, if same-specialty–referring physicians without financial relationships did not demonstrate increased utilization of diagnostic imaging, their inclusion would have diluted the effect). Compared with Hillman (4) and Hillman et al (5), who defined self-referring physicians as individuals who charged at least once for an imaging procedure, we categorized referring physicians on the basis of their entire referral history for the condition of concern. Same-specialty referrers must have always referred patients to themselves or to others in the same specialty. Finally, our logistic regression analysis, which controlled for patient age and comorbidity, may provide a more accurate estimate of the effect of same-specialty referral on the utilization of diagnostic imaging procedures.
The bottom line, from DI's review:

The results indicate that physicians who refer their patients to themselves or to others of the same specialty for imaging use imaging 1.12 to 2.29 times more often than physicians who refer their patients to radiologists for imaging.

The study also found that patient age and comorbidity do not explain the increased frequency for self-referred imaging. After controlling the data set for patient age and comorbidity, imaging frequency was 1.196 to 3.228 times greater for the self-referred patients.

The numbers are somewhat lower than those Drs. David Levin and Bruce Hillman, and others have found over the years, perhaps due to the methodology of this particular paper.

Levin criticized the study design for focusing only on the professional component of insurance claims, a tactic he believes misses "carloads" of self-referred cases.

"The numbers in this study are impressive enough on their own, but they significantly underestimate the magnitude of the problem," Levin said. "Policymakers have to realize that if we continue to allow self-referral, costs will skyrocket."

But they already have, Dr. Levin, they already have.

A companion piece in today's DIMAG.com notes another "Duh":

Self-referring physicians are among the first casualties of reductions in Medicare technical payments from the new 2005 Deficit Reduction Act rules implemented in January. Some nonradiologists are shutting down their self-referred imaging businesses, according to Dr. Harvey L. Neiman, executive director of the American College of Radiology.
Neiman spoke Oct. 25 at the 2007 Economics of Diagnostic Imaging National Symposium in Arlington, VA. . .

Estimates on Medicare's cost-savings from the DRA cuts vary from $1.4 billion in first year to as much as $13 billion over a three-year period.

While the DRA cuts were probably not designed to limit self-referral per se, they will have that effect, at least in some cases.

I smell a schism within the ACR. Half of the ACR is rabidly trying to overturn the imaging cuts of DRA, and they don't mention self-referral in polite company so as not to offend their "friends" within AMIC. But here, we have Dr. Neiman speaking very publically about how DRA is helping to curb self-referral. Hmmmmmmmmm. Maybe if we all worked together on this, we might accomplish something. Ya think?

Sunday, September 16, 2007

Three Interesting Articles

The recent changes in imaging payment as proposed by CMS have brought about a lot of discussion. Today, three articles pertinent to the discussion were referenced in the "Daily Scan", a newsletter from the RSNA.

The first is excerpted from the Wall Street Journal. Author David Armstrong has often dealt with the self-dealing issue, and in today's Wall Street, he reviews Medicare's apparent targeting of the practice. He notes several projects that have been derailed by the new thinking, such as this:

In February, a group of cardiologists in Gainesville, Ga., announced they were building a diagnostic heart center in an $18 million joint venture with the local hospital. Last month, they said the project was dead. . .

. . ."A lot of people have just called a time out on these deals," says Daniel Mulholland, a Pittsburgh health-care attorney who has advised hospitals on such investments. "The party is over. . ."

The reason? Federal Medicare officials want to crack down on arrangements like the one that was planned in Gainesville, where doctors refer patients to businesses in which they have a financial stake.

In recent years, many physicians have become wealthy by investing in magnetic resonance imaging, or MRI, facilities, surgery centers and diagnostic sites -- and then sending their patients to them. A recent McKinsey & Co. study pegged doctors' profits from this practice, known as self-referral, at $8 billion a year.


His assessment of the new CMS proposals:


. . . tough new restrictions proposed by the federal Medicare authority. . .would essentially ban Medicare payments for many self-referred services. In unusually blunt language, the Centers for Medicare & Medicaid Services said the self-referral arrangements are "creating incentives for overutilization and corrupting medical decision-making."
What else is there to say? Well, a few graphs from the article tell much of the story. See any trend?


It goes with what I have been saying for a while. Imaging spending is skyrocketing, having doubled in the last several years. Of this, Armstrong notes that $8 Billion goes to self-referral, although other sources have pegged this at $16 Billion. He does note that the glaring loophole known as the in-office exception remains in place.

The second article comes from Capitol Hill, via thehill.com's Jeffrey Young. It seems that our friends at the big imaging companies are starting to worry about their bottom line, and are lobbying the White House to turn things around.

GE Health President and Chief Executive Joseph Hogan and other imaging company officials gathered at the White House Monday for an audience with presidential advisers to press their case that their industry is being asked to bear an unfair burden as Congress and the administration look to rein in Medicare spending.

Lawmakers have set their sights on imaging spending in particular based on evidence that spending doubled in the first five years of the decade.Trade groups representing the companies are engaged in a push against additional regulations and legislation that they say will threaten Medicare patients’ access to the innovative, but expensive, technology.

Sound familiar? It should. . .

“We acknowledge there’s a growth in the sector. We don’t necessarily agree you can equate that growth as bad,” said Amy Jensen Cunniffe, director of government relations for the Advanced Medical Technology Association (AdvaMed).

AdvaMed is one of three trade groups leading the charge against the imaging cuts, along with the National Electrical Manufacturers Association’s Medical Imaging and Technology Alliance division, and the Access to Medical Imaging Coalition, which includes industry, physician and patient groups.

Yes, they are working side-by-side with NEMA and AMIC. All three are still pushing the same agenda suggesting that cutting back on machine expenditures will limit patient access to sophisticated scans. I have yet to hear that DRA-2005 has harmed or significantly inconvenienced even one little old lady. Some self-dealers and enterpreneurs, maybe. And of course GE and Siemens. But not Granny.

The final article of the treo is from the AP newswires, and it may be the most ominous of the bunch. "Health care premiums rise 6.1 percent," writes Emily Fredrix.

The increasing cost of health insurance is putting coverage out of reach for many small to midsize companies and their workers, even though the rise in premiums this year was the lowest increase in eight years. Since 2001, the cost of premiums has gone up 78 percent, far outpacing a 19 percent increase in wages and 17 percent jump in inflationaccording to a survey released Tuesday by the Kaiser Family Foundation, a health care research group that annually tracks the cost of health insurance.

"There's no scientific tipping point that you can point to at which health insurance becomes unaffordable," said Drew Altman, the foundation's president and CEO. "But it does seem like we've crossed a threshold where health insurance is increasingly unaffordable for medium-sized employers, particularly smaller employers and average people this year."

We have been treating the healthcare money pool as endless, that another dollar can always be printed to cover this cost or that. I think we have just discovered the bottom of the pool, as we rush headlong toward it after a high-dive.

As an aside, I am certainly not letting the insurance companies off the hook. They have a lot of questions to answer on how we got where we are, while they add considerable wealth to their coffers. My son has a chronic disease, and recently generated a $14,000 bill for diagnostic procedures. Because our company hadn't made a "good deal" with our provider, I'm going to pay at least $4,000 of this out of pocket. I can afford it, thank Heavens, but what about someone who can't? And this is with paying a rather high premium for group coverage.

The hemorrhaging and wasting of money cannot go on, and CMS is in the lead to staunch the bleeding. I'm not going to anoint them as saints just yet, however, as their ambitions are not necessarily to keep things honest, but in the words of the Monty Python Blackmail Sketch: "No, no, sir, it's alright, we don't morally censor, we just want the money." They have observed the huge flow of cash into imaging, and they are going to tap it. Nothing personal.

I once had great respect for the equipment companies, who invest zillions of dollars to build the latest and greatest of scanners. We all benefit from this, especially our patients. But does this end necessarily justify the means of selling an excess of scanning capacity by pushing machines in venues where they really aren't required? I have to think not. But it's pretty clear that this party is about over, and the question will shortly become moot. Especially if Hillary wins, and Rush Limbaugh says there is an 80% chance of that.

Monday, April 16, 2007

The First Salvo Is Fired
...Self-Dealing in Medical Imaging: Call for Action



The Battle of Fort Sumter, the beginning of the Civil War


Image courtesy of http://www.civilwarhome.com



Dr. Murray Reicher is well-known in PACS circles as the founder of DR Systems and their famous Catapult technologist workstation. Dr. Reicher has made his mark on imaging.

In a guest editorial in the Journal of the American College of Radiology (JACR, the Blue Journal), Dr. Reicher takes aim squarely at self-referral:

I have great concern over the possible destruction of my profession caused by self-dealing in medical imaging. Self-dealing occurs when a referring doctor makes money, directly or indirectly, simply by referring a patient for a medical imaging procedure, especially by gaining a financial benefit from the technical component of the procedure. . .Do you care about the future of the medical imaging field? Are you appalled by doctors who refer on the basis of personal economic gain? Do you realize that this practice not only threatens your profession but impairs the health care of your community and sucks resources away from legitimate health care providers and hospitals?

Wow. Pretty powerful stuff. Dr. Reicher goes on to provide us with a battle cry of sorts:

No machine fee for self-dealing in medical imaging.


This position is written in plain language because nonphysicians must understand it. The statement means that no referrer should make money, directly or indirectly, through ownership or lease, from the technical component associated with a medical imaging examination.

Dr. Reicher goes on to explain why the practice should bother you:

As a result of these legal loopholes (Stark in-office exception, etc), this practice of referring patients to self-owned or leased imaging equipment has again become rampant. Self-dealing radically raises costs . . . and subjects patients to unnecessary procedures. Technical and professional quality is lowered when radiologists are not directly involved. . . Opponents of legislative or private restrictions on self-dealing see self-referred medical imaging as an opportunity for physicians to add an income source in their own offices. They cloud the issue with demands for more study and statistics. Statistics can show us how much self-dealing is costing us but can never prove that it’s ethical, because it isn’t.

In medical imaging, first, we had no rules against self-dealing. Then, we adopted rules with loopholes. Surprise: the greedy and unethical minority of physicians have jumped through the loopholes, and if we don’t close them, the reputation of all health care providers will suffer. The truth will come out, eventually.

Italics are mine. Basically, this is what people have been saying all along concering the DRA-2005 fight. But that situation took a markedly tangential course when non-self-referring radiology-owned operations were tainted with the same tar-brush. I cannot help but think that this was a result of the ACR's incomplete job of educating Congress about self-referral. Maybe they should have brought Dr. Reicher with them to the various hearings.

Dr. Reicher goes on to dismiss many of the arguments out there that support self-referral/self-dealing. First, he makes it clear that this is not a "turf" issue, which is how the ACR managed to lose the interest of Congress:

To most people, even doctors, the discussion of professional turf isn’t relevant, and nobody feels qualified to make turf judgments. But most people can understand that when your doctor collects a technical component or “machine fee” just for ordering an examination, your doctor has lost the ability to independently advise you with regard to the right test or the right facility.

He notes that it is indeed not a matter of radiologists protecting our turf, since they stand to make a significant amount of money by reading the self-referred scans.

Dr. Reicher then very accurately points out that self-referral is anticompetitive:

In fact, the practice of self-dealing exposes patients and payers to a monopolistic, anticompetitive practice. When orthopedic surgeons send patients to scanners they lease, neither the patients nor their referring doctors select the facility on the basis of normal competitive merit; the doctors do not ask which facility in the region has the best technology, the best professionals, the best pricing, or the best service. Instead, they send the patients to the facilities with which they have business agreements that provide them a profit’s interest in the fees. Restricting the anticompetitive practice of self-dealing in fact favors competition.

So, what do we do about this lovely situation? Dr. Reicher gives us several approaches. He advocates asking the ACR to help fight this battle. Personally, I still harbor grave doubts about their ability, and even their willingness to do so after they have "hooked-up" (love the kids' phraseology) with every outfit that promotes self-referral under the guise of AMIC. What else can we do? Talk to vendors, and tell them:

. . .that if they support self-dealing, they don’t support you, and you won’t support them. Referring doctors who have purchased medical imaging equipment for their offices to self-deal in medical imaging via the “in-office” Stark safe-harbor clause have sales representatives from equipment vendors whispering in their ears, supported with beautiful color collateral materials and spreadsheets. If you want vendors to stop this behavior, you must show them that biting the radiology hand that feeds them is bad business.

Sadly, I don't think there would be any vendors left to deal with if we cut off those who pushed this agenda. Still, it doesn't hurt to make them squirm a little.

Perhaps the most effective approach is that of educating the payers, and somehow forcing physicians to disclose their financial conflicts of interest. How about this for a consent form?

Attention All Patients: We make money whenever we refer you for MRI (or PET, or CT) to the following facilities: _____. As a result, you cannot trust us to impartially consider when we send you to these facilities if the tests are really needed, if there are tests better suited for your problem, if there is a more qualified facility or imaging specialist in the area, or if competing facilities offer better pricing. Because we make money by referring you to the facilities we own or lease, you should consider the need for a second opinion from an independent provider before undergoing the test. We are required to provide you with a list of competing facilities in this community that may offer safer, more accurate, or less expensive medical imaging. They are _____.

I'm not holding my breath waiting to see that one out in public. There is a huge problem with this facet of the situation. Patients trust their doctors implicitly and explicitly. This is certainly a good thing, especially for those of us who grew up watching Marcus Welby, M.D. Is it right to point out to the patients that their trust in some cases is misplaced? Are we interfering in the doctor-patient relationship, one which I once thought sacred (before getting out into the real medical world) when we point out that their beloved doc just might be taking advantage of their trust and ignorance? I honestly don't know. On those rare occasions when I have broached the subject, I mainly get the response, "Oh, I trust my doctor. If he/she says I need a scan, I'll do it anywhere he/she suggests. It's so convenient to have the scan done in his/her office!" Maybe a little brainwashing, maybe a little hostage mentality. Either way, there is probably more of an uphill educational struggle on this front than you might think.

Perhaps the hardest pill for many radiologists to swallow is the fact that they are collaborators in this practice. The self-dealers ask them to read their scans, and they are happy to do so. After all, they reason, if they don't, someone else will. They might as well keep the otherwise lost revenue, and provide the patients the best of care. Right? Dr. Reicher answers:

I owe it to my community to behave in a trustworthy manner. Businesses that maintain the respect of their customers are the most successful in the long run. The “secret” of self-dealing is ultimately going to be widely understood by the public. If you are a collaborator, you are going to be seriously embarrassed at the least, and potentially personally liable.

Gulp. Not much I can say to that, is there?

There have been several objective articles before this, discussing the costs of self-referral. However, I have never before seen such a passionately-written article on the topic, one which calls a spade a spade, in this case blatantly declaring self-referral unethical. All I can say is, "BRAVO!" The problem is, sadly, I don't think too many folks are listening just yet. But, maybe that will change, and I hope that happens before Hillary uses this sort of information to justify destroying the American Health Care system.

Tuesday, January 16, 2007

Rife Machines, Travel Scams, Self-Referral, and Imaging Kickbacks


I just came back from a whirlwind visit to one of my relatives stricken with cancer. I am happy to report that she is doing well, with a clean PET/CT scan after 9 months of chemotherapy. Now, here's the bad news. My relative and her husband proudly announced that they had purchased a "Rife Machine," and this was the reason she had done so well. I'll let you Google the term to find out the details of this particular alternative medicine scam, but suffice it to say, it is supposed to zap the bacteria that "cause" cancer by sending a radio wave tuned to the exact "frequency" of the bacterium through the body. If you do take the time to Google, you will notice that the sites promoting this scam outnumber those exposing it by about 100 to 1. The Internet and human nature at their finest. Here is a good article debunking the outrageous claims. Check out this one as well. Anyway, in response I said, mostly under my breath, "It probably won't hurt you, and that's the best I can say for it." My relative then turned to me angrily and said, "I suppose you think it needs years of testing? You've been brainwashed by the medical establishment!" At that point, I changed the subject, knowing that I would not win this argument. I don't think I'm the one who was brainwashed at all.

There is a flaw in human nature that allows us to suspend rationality, to believe in whatever it is we want to believe at the moment. Sadly, there are people (I use the term loosely) with deficiencies of another sort that exploit the window of opportunity afforded by these lapses. This practice is not limited to health-care. My sick relative's husband, in the discomfort that followed the above exchange, went on to describe his latest money-making discovery, YTB Travel. To make a long story short, this is a multi-level marketing operation, like Amway, which sells travel-agencies. Well, to be more accurate, it sells websites that use the Travelocity engine to book travel. But the kicker is that each individual sucker, I mean client, can sell the program himself to other suckers, I mean clients, and the business they generate yields a commission for everyone in the chain above. Which means that the guys who are at the top of this pyramid scheme make big bucks, and the newly-joined make nothing. Oh, by the way, initiation into this little club is $500, and there is a $49 monthly fee. So, for $1100 the first year, you get a portal to Travelocity with your name on it. Whoopie. I went to half-a-dozen random YTB sites, and they are all absolutely identical. I even wrote to their owners, and received only one response, saying how good YTB was to him, and basically assuming that I would join up under his banner. You see, in the end, this is indeed nothing more than the same old pyramid operation with Dot.Com dressing. I'm anticipating a number of hateful emails from YTP devotees, but don't just take my word for it. Check this report from the BBB. A pyramid operation it is, folks. There's one born every minute, as old P.T. Barnum used to say.
Doctors are certainly not immune to any of these scams, and I am ashamed to say that there are real M.D.'s out there selling Rife machines, and probably owning YTB scam sites as well. Somehow, docs have become, well, indoctrinated with the idea that they know everything, that they can be experts at everything, and perhaps most unfortunately, that society owes them everything. You have read about self-referral, and that is a sad illustration of how far physicians will go to preserve the income some feel they deserve. One theory about imaging self-referral by clinicians is that since regulation and so forth have cut into their incomes, they are justified in "branching out" into other fields beyond their area of expertise to recover this income that was "theirs". One of these clinicians, Alan Boyar, M.D., admits as such in this AuntMinnie.com posting:

I was compelled to add these services because unlike radiology, office procedures are reimbursed significantly below cost and it is not possible to keep a private office open in So Cal with current rates. Before I closed, I'm in New Mexico now, I figured I really needed $85 an office visit to stay open and insurance was paying $48, EKG complete is only $28 dollars whereas my derm colleges are getting $60 to freeze a wart! My CA practice had turned into an expensive hobby and the AMA and societies didn't negotiate better rates for us.

I'm sure that's all true, and it is a very sad state of affairs indeed. Now, in Alan's case, he isn't forcing anyone to the best of my knowledge to have their hair depilated or their wart removed, or to be scanned in his Electron Beam CT emporium. But the basis of the downfall of medicine is contained in his statement. What I'm doing doesn't pay well anymore, so I'm going to start doing things beyond my scope of practice to bolster my income. I'll wager that Alan has no intention of going back and doing a Derm residency. Or a Radiology residency for that matter. He just wants the money to compensate him for his losses in primary care. Noble thought.

As noted above, docs are not immune to the cessation of rational thought when it comes to making money. I love to cite the "scanner lease" arrangements that have become so popular. These are loosely camouflaged kickback arrangements, and they are considered by most to be just at the borderline of legality. Basically, I own a scanner, and you "lease" time on it for a set fee, then turn around and bill for the scan at a higher rate than the leasing cost. Thus you make money on every scan you order. I had an internist describe this very scenario with great glee, thinking he had discovered something new and wonderful. When I told him what he was really doing, he turned white as a sheet, and asked me, "Why didn't they tell me that?" Why, indeed...

Regulators, legislators, insurers, and everyone else who is sick and tired of the financial hemorrage are all starting to wake up to what is happening, and the results are not going to be pretty. There is currently a case in Illinois where a leasing scheme is under litigation for violating the kickback statutes:

The MRIs were performed at the radiology centers, though the financial arrangement made it appear that the doctors were in charge of the equipment and billed the services as their own, the suit said. The attorney general's office alleged that the centers concocted "sham 'lease' agreements" to benefit the doctors, who then referred patients to the centers, sometimes for unnecessary tests."Illinois has a clear policy against kickbacks, and making payments to doctors for referral of patients is illegal, no matter how those payments are disguised," Atty. Gen. Lisa Madigan said in a statement. "Our investigation revealed evidence showing that this practice occurs among doctors and radiology centers in Illinois. This is an illegal practice that must stop."

I truly anticipate more and more litigation and ultimately prosecution of this sort of thing. And this will extend to self-referral as well. We put our trust in our physicians, and that should not require a suspension of rationality. But some docs stretch this trust, if not violate it completely, by ordering tests that serve little purpose beyond padding their wallets. I guess I'm from the Marcus Welby school where doctors were good people who made housecalls, didn't testify against each other, and didn't worry about fees. Sadly, ol' Doc Welby is long gone, and his sidekick (James Brolin) is married to Barbra Streisand and is deeply involved in liberal causes.

I don't know how to return us back to the day when docs could be trusted to do the right thing, and not the lucrative thing. Some on AuntMinnie have seriously proposed that the government prop up the primary care docs so they aren't tempted to dabble in imaging and hair-removal. Personally, I think the government and insurers need to examine the increased revenue produced by self-referral mills, stop the bleeding, and retroactively penalize those gluttons who ruined the system. As for faith, one of the Rife-machine articles sums it up well:

Much of the frequency medicine practised today descends from Royal Rife, who did his research in the early 1930s. Rife identified the virus that caused all cancers (!), which he named “BX”. As this was before the invention of the electron microscope, Rife invented an optical microscope with a claimed magnification of 17,000x. A perusal of the web sites of Olympus, Nikon and Zeiss shows that the best theoretical magnification claimed today is about 1,400x, although practically it is about 1,250x. (Zeiss use an appropriate slogan to promote their microscopes: “Limited only by the laws of physics”.) The secrets of Rife’s microscope are lost, presumably suppressed by orthodox optical companies, but his method of curing cancer lives on.
Rife’s 1931 demonstration of the microscope involved creating a non-filterable form of the typhoid bacillus, which appeared as small moving turquoise dots in a static background. Scientists looked through Rife’s microscope and also saw these blue dots. Some astronomers once looked through Lowell’s telescope and saw canals on Mars; some scientists once saw evidence of the refraction of N-rays in Blondlot’s laboratory; some scientists were once convinced that deuterium could fuse at room temperature within the crystal matrix of palladium. All of them were mistaken. The difference between the last three delusions and Rife is that almost nobody believes them any more. The other difference is that a belief in Mars canals or cold fusion cannot kill anyone. A belief in a false cure for cancer can.

Ordering unnecessary scans probably won't kill anyone either, although the radiation exposure could add up eventually. But American Medicine is tarnished by the practice. In the self-referral scam, docs are the culprits; in the leasing scam, docs are the victims as well. But the patients are never at the top of the pyramid, and that is where they should be, lest we forget. My relatives with the Rife machine have made me very aware that a good segment of the population doesn't trust physicians or conventional medicine. They think they are a cabal organized for their own self-preservation, and the patient be damned, that organized medicine is the pyramid operation, designed to separate them from their money. They think the doctors would let a relative die rather than lose money on a simple "cure". With the behavior I'm seeing out there, I'm not sure I can blame them for their misbelief.