Self-Referred MRI and CT Services and Expenditures Grew Overall, While Non- Self-Referred Services and Expenditures Grew Slower or Decreased

From 2004 through 2010, the number of self-referred MRI and CT  services performed in a provider’s office and non-self-referred MRI and  CT services performed in a provider’s office or IDTF increased, with the  larger increase for self-referred services. Number of Self-Referred and Non-Self-Referred MRI and CT Services Increased Overall from 2004 to 2010, with the Larger Increase among Self-Referred Services

While the number of self-referred MRI services performed in a provider’s  office and non-self-referred MRI services performed in a provider’s office  or IDTF both increased from 2004 through 2010, a significantly larger   Specifically, the  increase occurred among the self-referred services.number of self-referred MRI services increased from about 380,000  services in 2004 to about 700,000 services in 2010—an increase of more  than 80 percent (see fig 2). Self-Referring Providers Referred Substantially More Advanced Imaging Services on Average Than Did Other Providers

We found that, in 2010, providers that self-referred beneficiaries for MRI  and CT services referred substantially more of those services than did  providers who did not self-refer these services, even after we accounted  for differences in practice size, specialty, geography, and patient  characteristics. We also found that the year after providers purchased  MRI or CT equipment, leased MRI or CT equipment, or joined a group  practice that self-referred, they increased the number of services they  referred when compared with providers that did not begin to self-refer  advanced imaging services. Our analysis indicated that providers’ referrals for MRI and CT services  substantially increased the year after they began to self-refer. Overall, the switcher group of providers  who began self-referring in 2009 increased the average number of MRI  and CT referrals they made by about 67 percent in 2010 compared to the  average in 2008. In the case of MRIs, the average number of referrals  switchers made for MRI services increased from 25.1 in 2008 to 42.0 in  2010. This comparison suggests that the increase in the  average number of referrals for switchers from 2008 to 2010 was not due  to a general increase in the use of imaging services among all providers. This suggests that financial incentives for self-referring  providers may be a major factor driving the increase in referrals. These  financial incentives likely help explain why, in 2010, providers who self- referred made 400,000 more referrals for advanced imaging services than  they would have if they were not self-referring. These additional referrals  cost CMS more than $100 million in 2010 alone. To the extent that these  additional referrals are unnecessary, they pose an unacceptable risk for  beneficiaries, particularly in the case of CT services, which involve the  use of ionizing radiation. CMS first needs to improve its ability to identify services that are  self-referred. Including a self-referral flag on Medicare Part B claims submitted by  providers who bill for advanced imaging services is likely the easiest and  most cost-effective approach. In its comments, HHS stated that it would  consider one of our recommendations but did not concur with our other  two recommendations. Given these findings, we continue to believe that CMS  should take steps to monitor the utilization of advanced imaging services  and ensure that the services for which Medicare pays are appropriate. GAO staff who made major contributions to this report  are listed in appendix V.

Appendix I: Scope and Methods

This section describes the scope and methodology used to analyze our  three objectives: (1) trends in the number of and expenditures for self- referred and non-self-referred advanced imaging services from 2004  through 2010, (2) the extent to which the provision of advanced imaging  services differs for providers who self-refer when compared with other  providers, and (3) the implications of self-referral for Medicare spending  on advanced imaging services. As part of developing this claims-based  methodology to identify self-referred services, we interviewed officials  from CMS, provider groups, and other researchers.
Why GAO Did This Study

Medicare Part B expenditures--which include payment for advanced imaging services--are expected to continue growing at an unsustainable rate. Questions have been raised about self-referral's role in this growth. Self-referral occurs when a provider refers patients to entities in which the provider or the provider's family members have a financial interest. GAO was asked to examine the prevalence of advanced imaging self-referral and its effect on Medicare spending. This report examines (1) trends in the number of and expenditures for self-referred and non-self-referred advanced imaging services, (2) how provision of these services differs among providers on the basis of whether they self-refer, and (3) implications of self-referral for Medicare spending. GAO analyzed Medicare Part B claims data from 2004 through 2010 and interviewed officials from the Centers for Medicare & Medicaid Services (CMS) and other stakeholders. Because Medicare claims lack an indicator identifying self-referred services, GAO developed a claims-based methodology to identify self-referred services and expenditures and to characterize providers as self-referring or not.

What GAO Found

From 2004 through 2010, the number of self-referred and non-self-referred advanced imaging services--magnetic resonance imaging (MRI) and computed tomography (CT) services--both increased, with the larger increase among self-referred services. For example, the number of self-referred MRI services increased over this period by more than 80 percent, compared with an increase of 12 percent for non-self-referred MRI services. Likewise, the growth rate of expenditures for self-referred MRI and CT services was also higher than for non-self-referred MRI and CT services.
GAO's analysis showed that providers' referrals of MRI and CT services substantially increased the year after they began to self-refer--that is, they purchased or leased imaging equipment, or joined a group practice that already self-referred. Providers that began self-referring in 2009--referred to as switchers--increased MRI and CT referrals on average by about 67 percent in 2010 compared to 2008. In the case of MRIs, the average number of referrals switchers made increased from 25.1 in 2008 to 42.0 in 2010. In contrast, the average number of referrals made by providers who remained self-referrers or non-self-referrers declined during this period. This comparison suggests that the increase in the average number of referrals for switchers was not due to a general increase in the use of imaging services among all providers. GAO's examination of all providers that referred an MRI or CT service in 2010 showed that self-referring providers referred about two times as many of these services as providers who did not self-refer. Differences persisted after accounting for practice size, specialty, geography, or patient characteristics. These two analyses suggest that financial incentives for self-referring providers were likely a major factor driving the increase in referrals.
GAO estimates that in 2010, providers who self-referred likely made 400,000 more referrals for advanced imaging services than they would have if they were not self-referring. These additional referrals cost Medicare about $109 million. To the extent that these additional referrals were unnecessary, they pose unacceptable risks for beneficiaries, particularly in the case of CT services, which involve the use of ionizing radiation that has been linked to an increased risk of developing cancer.

What GAO Recommends

GAO recommends that CMS improve its ability to identify self-referral of advanced imaging services and address increases in these services. The Department of Health and Human Services, which oversees CMS, stated it would consider one recommendation, but did not concur with the others. GAO maintains CMS should monitor these self-referred services and ensure they are appropriate.