SB 1215 by Senator Ed Hernandez would repeal the current in office exemption under the California self-referral law for advanced imaging and radiation oncology. The CRS supports this bill and it is now scheduled for hearing in the Senate Business, Professions and Economic Development Committee on Monday, April 28, 2014. It is important that CRS members that are constituents of the members of that Committee make contact to show support for the bill. Here are some of the talking points that you can raise in your letters, emails or phone calls:
The in office exception was originally created so that physicians could continue to render non-complex services, like X-Rays and simple blood tests, within their offices at the same time as the patient's visit. It was never intended to include complex and costly advanced imaging services, radiation therapy, physical therapy or biopsy testing. Instead, this exception has created perverse incentives and led to overutilization. For example:
- A GAO report late last year confirmed that physician self-referral for advanced imaging services is costing Medicare more than $109 million in unnecessary spending each year. According to the GAO: "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."
- Doctor-owned imaging machines have been used four times more than those used by radiologists since 2000.
- Self-referring non-radiologist physicians perform up to eight times as many imaging studies as physicians who refer their patients to radiologists.
- Only 10% of advanced imaging services are performed on the same day as an office visit.
- Medicare data shows that 2/3 of these machines are now within physician offices.
- A 2013 GAO study on the utilization of intensity modulated radiation therapy (IMRT) by urologists for prostate cancer treatment showed that IMRT utilization among self-referring groups increased by 456%. Overall utilization of IMRT was almost entirely driven by services performed by limited specialty groups, while utilization among non-self referrers decreased by 5%. The increases in IMRT utilization among self-referring practices could not be attributed to patient preference, age, geographic location or patient's health status. Financial incentives for self-referral groups led to patients not receiving other appropriate and less expensive treatments, including brachytherapy or active surveillance.
To the extent that these additional referrals were unnecessary, they cost Medicare hundreds of millions each year and can 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.
SB 1215 will eliminate diagnostic MRI, CT, PET and other advanced diagnostic imaging services, anatomic pathology, radiation oncology and physical therapy from the in-office exception. SB 1215 continues to allow physicians to perform ultrasound and plain film imaging and only removes advanced and more expensive imaging from the in-office exemption.
The evidence of increased utilization through self-referral is overwhelming. Radiologists and radiation oncologists compete for referrals of patients from physicians based upon competency, quality and the availability of multiple diagnostic modalities, i.e. imaging centers have CT, MRI, PET or therapeutic modalities. Opponents claim that this practice occurs due to patient convenience or no alternative location for services, i.e. the only option is the more expensive hospital setting. Neither argument has merit since few of these services occur at the time of the office visit, less than 10%, and freestanding imaging centers are in every community and are a convenient and cost effective alternative to the hospital setting.
Here is the contact information for the members of the Committee and their district city/county. Please send copies of letters to bachermann@amgroup.us. Thanks for your help and please act prior to April 28th. There will be opposition from other specialists and the CMA.
