November 9, 2012
James C. Cosgrove
Director, Health Care
U.S. Government Accountability Office
441 G Street, NW
Washington, DC 20548
Katherine Siggerud
Managing Director, Congressional Relations
U.S. Government Accountability Office
441 G Street, NW
Washington, DC 20548
Dear Mr. Cosgrove and Ms. Siggerud:
On behalf of the American College of Radiology (ACR), a professional organization representing more than 36,000
radiologists, interventional radiologists, radiation oncologists, nuclear medicine physicians, and medical physicists, I
thank the Government Accountability Office (GAO) for studying the impact of physician self-referral on Medicare
utilization rates and expenditures. ACR was extremely pleased that the data, analysis, and conclusions published in
“Higher Use of Advanced Imaging Services by Providers Who Self-Refer Costing Medicare Millions (CMS-12966)” substantiates our ongoing concerns surrounding misapplication of the in-office ancillary services (IOAS)
exception within the Ethics in Patient Referrals Act, commonly referred to as the “Stark self-referral law.” In
addition, we applaud the three recommendations GAO provided to the Centers for Medicare and Medicaid Services
(CMS) to better identify and curb inappropriate utilization of diagnostic imaging services stemming from abuse of
the Stark law’s IOAS exception. Although they indicated a willingness to implement an approach to ensure the
appropriateness of advanced diagnostic imaging services referred by self-referring providers, ACR was frustrated
that CMS did not concur with the recommendation to more clearly identify self-referring physicians on Medicare
claims. The College was also disappointed that the Centers elected not to concur with the recommendation to
determine and implement payment reduction policies solely for physicians that self-refer patients for advanced
diagnostic imaging procedures. Yet, of greatest concern to the thousands of practicing radiologists throughout the
United States is the shocking decision by CMS not to even comment on GAO’s finding that self-referring providers
referred substantially more advanced diagnostic imaging services at a considerable cost to the Medicare system. As
the premiere national medical professional society representing the specialty of radiology, we felt compelled to
applaud your work and provide more detailed comments.
Since the College has consistently alerted policymakers of the deleterious impact of the IOAS loophole, ACR was
not surprised that the GAO’s analysis of Medicare Part B claims between 2004 and 2010 revealed that self-referring
physicians were the primary reason behind increases in advanced diagnostic imaging utilization and expenditure
rates during this time period. Upon closer examination of select advanced diagnostic imaging modalities,
specifically magnetic resonance imaging (MRI) and computed tomography (CT), GAO’s analysis showed that selfreferring providers referred about two times as many of these services as providers who did not self-refer. Most
importantly, these differing referral rates persisted after controlling for practice size, specialty, geography, or patient
characteristics indicating that misaligned financial incentives are likely the key cause of increased utilization and
expenditure rates among self-referrers.
GAO’s focus on referral rates for “switchers,” or a category of providers who began self-referring in 2009, lends
even further credibility to the argument that financial incentives drive increasing advanced diagnostic imaging
utilization and expenditure rates. For example, average MRI and CT referral rates among “switchers” increased by
approximately 67 percent in 2010 in comparison to 2008 figures. In the case of just 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.
Paul Ellenbogen, M.D., FACR
American College of Radiology
February 12, 2016
Page 2
Increases in inappropriate imaging utilization rates have real consequences on the Medicare program. In 2010, GAO
estimated that self-referring physicians likely made 400,000 more referrals for advanced diagnostic imaging services
than they would have if they were not self-referring. These increases in inappropriate referrals translated into an
additional $109 million in Medicare spending in 2010, alone. Although difficult to calculate and beyond the scope of
this study, the associated risks of patient overexposure to unnecessary radiation is also important to highlight.
In light of this indisputable data analysis, GAO provided three key policy recommendations:
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Recommendation #1: Insert a self-referral flag on its Medicare Part B claims form and require providers to
indicate whether the advanced imaging services for which a provider bills Medicare are self-referred or not.
Recommendation #2: Determine and implement a payment reduction for self-referred advanced imaging
services to recognize efficiencies when the same provider refers and performs a service.
Recommendation #3: Determine and implement an approach to ensure the appropriateness of advanced imaging
services referred by self-referring providers.
Unfortunately, the Department of Health and Human Services (HHS) expressed in written comments that they did
not concur with the first and second recommendations. ACR disagrees with the different rationales cited in
opposition to these two recommendations. With respect to the inclusion of a flag on Medicare Part B claims forms
which would enable Medicare to more easily identify self-referring physicians, HHS believes this policy presents
administrative challenges to implement and is insufficient to eliminate all types of Stark law variations. In addition,
the Department believes that innovative care models enacted through the Patient Protection and Affordable Care
Act, including Accountable Care Organizations (ACOs), and policies that reimburse physicians based on the quality
of care they provide will more adequately address the negative byproducts of physician self-referral.
ACR, however, agrees with GAO’s assertion that this checkbox should not be viewed as a way to enforce potential
Stark law violations. Instead, it should be viewed as a way to more accurately identify self-referrers and track
corresponding utilization and expenditure trends among this classification of physicians. Absent recommendation
one, CMS will continue to have no clear way to monitor self-referring physicians. There is universal agreement
among policymakers that the Medicare program faces serious fiscal challenges in the near future. With GAO’s
research proving that inappropriate imaging among self-referring physicians cost the Medicare program more than
$100 million in a single year, it’s irresponsible for HHS to provide such a flimsy refutation of the checkbox
recommendation. In addition, while ACR is very supportive of the movement towards greater coordinated care, it is
unclear how many physicians will elect to join ACOs in the near future. Even if the health care delivery system
witnesses a movement towards greater coordination of care in the long-term, ACR is fearful of referring physicians
continuing to exploit the IOAS exception for short-term gain in the near future.
My colleagues and I are also bewildered by HHS’s rationale for opposing recommendation two. GAO suggested a
differing payment rate for self-referring physicians because of inherent efficiencies associated with the same doctor
ordering and performing a service. According to HHS, CMS’s multiple procedure payment reduction (MPPR) to
both the professional and technical component of advanced diagnostic imaging services already captures any
duplication of work associated with the same physician or group practice providing multiple advanced diagnostic
imaging services in the same session, irrespective of whether those services are self-referred or not. ACR agrees
with GAO’s assertion that the MPPR policy fails to capture efficiencies associated with the same provider ordering
and performing a single advanced diagnostic imaging performance and is mystified how the agency could see any
parallels between the two policies. Furthermore, my colleagues and I are confused as to why HHS elected not to
highlight that GAO’s second recommendation is consistent with a similar policy concept adopted by the Medicare
Payment Advisory Commission (MedPAC) in the June 2011 Annual Report to Congress. In addition to citing a lack
Paul Ellenbogen, M.D., FACR
American College of Radiology
February 12, 2016
Page 3
of statutory authority stemming from a prohibition on reimbursing different physician specialties different payment
rates for the same service, CMS also claims that providers in a group practice could easily avoid the payment
reduction by having one physician order the service, while another renders the procedure. Again, we agree with
GAO’s assertion that employing recommendation number one could be an additional deterrent to abusing the IOAS
exception.
ACR, however, was encouraged that HHS looked favorably on the third recommendation and our organization
believes that expanded use of appropriateness criteria is the most effective way to eradicate all forms of inappropriate
imaging. ACR has been the leader in developing and disseminating evidence-based guidelines to assist referring
physicians and other providers in making the most appropriate imaging or treatment decision for a specific clinical
condition. Defined as ACR Appropriateness Criteria®, these guidelines are developed and maintained by more than
80 representatives from 20 non-radiology specialty organizations and over 300 volunteer physicians. The ACR
Appropriateness Criteria® can be easily integrated with computerized ordering and electronic health record (EHR)
systems so healthcare organizations can effortlessly consume the guidelines and ensure that the right patient gets the
right scan for the right indication. The ACR Appropriateness Criteria® is extremely robust with the June 2012
version covering 175 clinical topics with over 850 variants. It’s important to note that the College initially
championed the use of appropriateness criteria in the Medicare Improvements in Patients and Providers Act
(MIPPA) of 2008. In short, incentivizing the use of ACR Appropriateness Criteria® is far more effective than the
other “front-end” and “back-end” approaches to curbing imaging utilization and expenditures highlighted in the
study, including the implementation of prior authorization or expansion of physician payment audit programs.
Although HHS claims that they currently lack statutory authority to unilaterally enact self-referral utilization
management policies, I, as well as the thousands of practicing radiologists throughout the United States, applaud this
recommendation and ACR stands ready to work with the federal government to employ ACR Appropriateness
Criteria® in the Medicare program.
Finally, it’s important to note that GAO’s analysis is focused on physicians who are not radiologists but who have
either purchased imaging equipment or joined practices composed of other non-radiologists who own such
equipment. Radiologists do not refer patients but typically provide imaging services to patients upon a referral from
another physician. Unfortunately, in the recent past federal, policymakers have been quick to enact reimbursement
cuts as the primary solution to curb inappropriate utilization of diagnostic imaging services. We applaud GAO for
rejecting this flawed strategy and highlighting that abuse of the IOAS exception may be to blame for increases in
advanced diagnostic imaging utilization and expenditure rates, as well as offering more sensible, innovative
recommendations.
Once again, we commend GAO for the data, analysis, and conclusions published in “Higher Use of Advanced
Imaging Services by Providers Who Self-Refer Costing Medicare Millions (CMS-12-966).” Should you have any
additional questions or comments, please do not hesitate to contact Cynthia Moran, Assistant Executive Director,
either by phone, 703-648-8982, or email, cmoran@acr.org.
Sincerely,
Paul H. Ellenbogen, MD, FACR
Chair, Board of Chancellors
American College of Radiology