The ACP Advocate Blog

by Bob Doherty

Thursday, August 20, 2009

Should doctors be allowed to own the tests they order?

A front page article in the July 31 Washington Post investigated the practice of physicians having an ownership interest in diagnostic and ancillary procedures they order for their own patients.

Reporter Shankar Vendantum reports on a urology practice that had a whopping 700 percent increase in CT scans after it bought its own machine:

"In August 2005, doctors at Urological Associates, a medical practice on the Iowa-Illinois border, ordered nine CT scans for patients covered by Wellmark Blue Cross and Blue Shield insurance. In September that year, they ordered eight. But then the numbers rose steeply. The urologists ordered 35 scans in October, 41 in November and 55 in December. Within seven months, they were ordering scans at a rate that had climbed more than 700 percent.

The increase came in the months after the urologists bought their own CT scanner, according to documents obtained by The Washington Post. Instead of referring patients to radiologists, the doctors started conducting their own imaging -- and drawing insurance reimbursements for each of those patients."

A lawyer representing the practice responded that the increase was unrelated to buying a scanner and that all tests ordered were within the "standard of care."

This is not a new issue. As far back as 1993, the GAO found that physicians in Florida who owned diagnostic imaging facilities had higher referral rates for all types of imaging services than non-owners.

The reason the issue is now getting a fresh look is that physician ownership of diagnostic testing facilities has steadily increased, and related or not, so has utilization of high cost imaging procedures. As Congress looks for ways to trim costs, self-referral will be under scrutiny.

ACP policy "opposes any financial arrangement that links income generation explicitly or implicitly to the volume or revenues generated by the investor-physicians; referrals if there is no valid medical need for the referral; any arrangement that involves an explicit or implicit inducement or encouragement of physicians by the management of the entity to increase the volume of referrals to the facility; and referrals to any entity (except those specifically exempted by law) unless disclosure has been made to patients of the physician's financial interest in the facility and, to the extent practicable, a list of alternative facilities from which the goods or services can be obtained." At the same time, ACP supports the current "in office" ancillary services exemption, which allows physicians to refer patients for testing done in their own offices. This policy was originally written in 1998 but reaffirmed in 2004 by the Board of Regents. The intent when the policy was written was to allow physicians to keep X-ray machines and minor diagnostic procedures in their offices. Technological innovation, though, has since led to much more advanced diagnostic procedures falling under the exemption.

Today's question: Do you think that physician ownership of the diagnostic tests they own benefits or hurts patient care? Why or why not?

3 Comments :

Blogger PCP said...

A more pertinent question is why are such tests so well reimbursed, vis a vie the cognitive services that are inputted in the nascency of that order?
Until we as a country(and payers specifically) answer that simple question we will continue to play this silly game of cat and mouse.
Technical services have and continue to be highly paid in this country and that system is kept that way by the specialty interests and their CT Scanner/MRI/PET scanner etc etc. manufacturers whose interests it serves to keep those tests lucrative.
Americans want those tests, and physicians deliver them in a consumeristic 3rd party payer system. It hardly matters to joe public who owns that machine.
It befuddles me, the therapeutic relief that is seen on a patient's face when a scan is ordered . It is quite simply a stunning sight to me.
Until and unless we respect and reward the cognitive process that involves the ordering of that test by perhaps requesting letters of necessity and clinical need (addressed only to the interpreting radiologist by the Physician ordering or supervising the mid level provider ordering the test) say for each test costing over perhaps $300, AND REIMBURSING each of those well composed letters at say half the price of the scan, we will never see the end of this cat and mouse game.
Once again I ask, Why are we reimbursing these test so handsomely, while disprespecting the cognitive process behind it, heck in this country, the way the system is set up, even a mid level provider orders this test from a remote site with scant regard to costs/risks/benefits/options/or even sometimes without a clearly thought through plan? No wonder we get this messy scenario.

August 20, 2009 at 11:54 PM  
Blogger Steve Lucas said...

As a patient I feel it hurts care. Test are often a substitute for patient interaction and this is just one more way to limit patient care. While there may be a convince factor in providing some test in office, this has grown to a point, where some offices are now medical buildings, with the medical group participating in all of the associated income.

Recently, in a nearby community, 200 doctors are buying a dying hospital, located in a low income area, with the intent of moving the licensee to a high income area. This will allow the doctor/investors to participate in the income generated by the group. This will also leave an undeserved community with no medical facility.

We also have the incidental danger of the test itself. High doses of radiation over time will create a higher risk for certain cancers. The WSJ highlighted some time age that one whole body scan resulted in the same radiation dosage as exposure to one of the Japanese atom bomb blast. The Mayo is now the focus of treating those with very distinct cancers as a result of this exposure. Other test have other risk.

Overall I would bar doctor ownership of most testing equipment, unless a direct cost benefit, or lack of access for the patient, can be established prior to purchase.

Steve Lucas

August 21, 2009 at 9:34 AM  
Blogger Jay Larson MD said...

Agree with PCP, why is diagnostic imaging so well reimbursed in this country? I can fly from Helena, MT to Japan, have an MRI and fly back to Helena for the same cost of getting an MRI down the street.

August 21, 2009 at 10:12 AM  

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About the Author

Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog

Email Bob Doherty: TheACPAdvocateblog@acponline.org.

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