Self-Referrals Rampant

Back in August, 2005, physicians at Urological Associates ordered 9 CT scans for patients covered by the local BCBS carrier. They ordered 8 in September. That rate was lower than most physicians in the community.

But in October, the Iowa-based group ordered 35 scans and then 41 and 55 in the ensuing 2 months. That was about 3 times higher than local norms.

The sudden jump began when the practice purchased its own CT scanner, according to the Washington Post, and the tale repeats itself all over the US. 

The bump in imaging does not translate to improved health outcomes, as numerous studies have shown.

And the excessive radiation from the scans may cause up to 1% of all cancers in the US.

The self-referral problem was thought to be solved in 1992 with passage of the Stark Law, but a loophole allowed physicians to keep up the practice, so long as the devices were housed under the same roof as their practice.

The exception was intended to permit physicians to use the machines for expedited diagnoses of fractures, pneumonia and the like, but soon after Stark passed, CT and MRI scanners shrank magically in size.

“Physicians who purchase machines for their offices have a financial incentive to refer patients for additional services,” MedPAC stated in a recent report. “Physician ownership could influence the judgment of some physicians, particularly when there is not strong evidence to guide their decisions.”

Meanwhile the Web site of GE Healthcare posts testimonials from physicians about the nifty return on the imaging devices. “We’re already beating our pro forma in terms of the return on investment,” says one West Virginia physician.

Congress, by the way, is considering a proposal to prohibit the practice.

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