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.