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Study: Medicare Shouldn’t Pay For Self-Referral

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American College of Radiology researchers say doctors who “self-refer” for imaging on equipment they own or lease should not receive Medicare reimbursement except for X-rays. According to the study, self-referral almost never shortens the duration of an illness and usually increases costs.

Supporters of self-referral—in which patients are sent for imaging on equipment controlled by the referring physician, and for which the referring physician bills—say that it means shorter waits for imaging, quicker and more accurate diagnoses, faster treatment, and shorter duration of illness.

Danny R. Hughes, PhD, and colleagues looked at Medicare claims data for 2004 through 2007, examining a random sample of 733,459 medical episodes. They concluded that self-referral was associated with a higher total cost for 14 of the 20 medical conditions or imaging types that they studied. Total costs compared with costs associated with referrals to outside facilities were 10 percent more for CT, 9 percent more for MRI, 10.5 percent more for nuclear medicine, 7 percent more for ultrasound, and 4.5 percent more for X-ray.

The study found that self-referral decreased illness duration (by an average of 5 percent) only for X-rays to diagnose chest pain, respiratory illness, or sinusitis. The authors suggest that’s probably because X-rays are the only type of self-referred imaging that normally takes place on the same day as the office visit that led to the referral. Self-referred X-rays for chest pain did not increase costs, but X-rays for respiratory illness and sinusitis did.

“Based on our findings, for types of imaging other than X-rays, we reject the hypothesis that self-referral for imaging in nonhospital settings is associated with shorter episodes of illness that occur in the absence of self-referral,” the authors wrote.

Medicare and Medicaid generally prohibit physicians from referring patients to facilities in which they have an ownership interest, but there’s an exception for ancillary services, including imaging, that are delivered in the same office. Dr. Hughes and his colleagues advocated nothing short of cutting off Medicare reimbursement entirely for most forms of self-referred imaging:

Based on our findings, we conclude that the Medicare exemption for self-referred imaging should be narrowed so that it includes only X-rays, not other forms of imaging. To the extent that state laws or private payers permit self-referral for imaging, they would also do well to follow this policy.

The research was published in the December issue of Health Affairs.

It should be noted that the researchers aren’t exactly disinterested. They work for the American College of Radiology in Reston, Virginia. Dr. Hughes is the assistant director for research. Self-referral usually means that imaging is done in the offices of nonradiologists rather than outsourced to a radiology practice.

Related seminar: Radiology Review

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One Response to “Study: Medicare Shouldn’t Pay For Self-Referral”

  1. Radiology Daily»AlertArchive » Maryland Court Upholds Self-Referral Ban on January 28th, 2011 at 10:01 am

    […] radiologists cheered and orthopedic surgeons booed. Radiologists say, with some empirical justification, that self-referral by doctors for imaging on machines they own or control leads to financially […]