- Medicare spending for in-office imaging services increased from $6.9 billion in 2000 to more than $14 billion in 2006.
- The proportion of outpatient Medicare imaging performed in physician offices rose from 58% in 2000 to 64% in 2006.
- Spending on advanced imaging, such as CT, MRI, and nuclear medicine, rose 17% per year, substantially faster than spending on less expensive ultrasound and x-ray procedures.
- Cardiologists relied on medical imaging for 36% of their total Medical revenue in 2006, up from 23% in 2000.
In-office imaging spending in 2006 varied nearly eightfold from state-to-state, from $62 in Vermont to $472 in Florida. The huge difference led GAO analysts to express concern about whether Medicare payment policies have emboldened physicians to overuse imaging.
Basically, they want precertification. This is a good start, but I really don't think it will do the job. Possibly there will be some minor effect in the beginning, but those who make a lot of money from self-referral will be more than happy to jump through the hoops to get to the pot of gold. But at least the problem is getting some lip-service from places that count.
Given the pressures of a fiscally unsustainable Medicare program, CMS has undertaken several initiatives aimed at improving its performance as a purchaser of health care services. With respect to rapidly growing imaging services, the experience of the private plans in our study suggests that the benefits of front-end management of these services exceeded their costs. We believe CMS may be able to improve its prudent purchaser efforts by adopting strategies such as prior authorization and privileging.
The report includes a response from our friends at AMIC, who are none too pleased to have their masters' gravy-trains interrupted:
Blah, blah, blah. It's OK to talk about limiting self-referral, as long as we don't actually do anything about it, right? Well, the GAO is talking about it, and maybe CMS will eventually do something about it. I'm not all that keen on RBM's either, but it's a start, and we need to start somewhere.
AMIC representatives raised four principal concerns about the draft report. First, they stated the draft report should have focused on strategies such as accreditation (which improves quality), and adherence to clinical practice guidelines (that result in appropriate use of imaging services), rather than private sector strategies such as use of RBMs, prior-authorization, and other techniques which focus solely on controlling
costs. Specifically, AMIC representatives expressed several concerns about RBMs. They stated that the for-profit structure and lack of transparency in sharing appropriateness guidelines make RBMs incompatible with the Medicare program. They also contended that there is no evidence that RBMs improve care or add value, and RBMs involve physicians in lengthy interactions. Moreover, they stated that prior authorization had been tried and proven unfeasible for Medicare for lack of sufficient administrative resources. In the draft report, we noted plans’ increasing use of accreditation to assure quality of imaging services. With regard to prior authorization and RBMs, we are recommending that CMS consider the feasibility of these and other front-end approaches. We would also note that while HHS indicated that prior authorization might be inconsistent with the Medicare program, the department did not rule it out as a strategy that had been tried and proven unfeasible for Medicare.
Second, AMIC representatives stated that in emphasizing spending growth we had failed to recognize the benefits of imaging and its effects in reducing overall health costs by substituting for more invasive procedures or treatments. We acknowledged the benefits of imaging throughout the draft report and noted that while some of this spending growth may be appropriate, financial incentives inherent in Medicare’s payment policies for potentially inappropriate use of imaging in physicians’ offices, and their implications for a fiscally unsustainable Medicare program cannot be ignored. We are not aware of any peer-reviewed studies that conclusively show the role of imaging in reducing overall health care costs.
Third, AMIC representatives stated that by focusing only on Part B spending under the physician fee schedule, the draft report did not acknowledge growth in imaging across other sites of care such as hospitals. As we stated in the draft report, Medicare’s physician payment policies contain financial incentives for physicians to directly benefit from higher fees paid for the provision of imaging services in their offices, while receiving lower fees for interpretation of in hospitals. However, we have added additional information to the report, noting that about two-thirds of all imaging services were delivered in the hospital setting in 2006, and that spending on imaging services delivered in physician offices grew twice as fast compared to spending on services delivered in the hospital setting.
AMIC’s fourth concern was that the draft report did not discuss the fairness of the payment reductions resulting from the changes mandated in the DRA. As noted in the draft report, we will examine the effects of payment changes mandated by the DRA in a separate report.