January 2005 | Vol. 23, No. 1

Pressure Grows for Tighter Medicare Oversight of Imaging Services

By John Reichard, CQ HealthBeat Editor

Re-printed from the Dec. 10, 2004 issue of CQ HealthBeat News

The staff of the Medicare Payment Advisory Commission unveiled a set of draft recommendations recently to help ensure Medicare isn't wasting money on medical imaging, one of the fastest-growing areas of physician-related spending.

The recommendations aim to ensure not only that medical images are of good quality, but also that they are necessary. If MedPAC votes to adopt them and Congress and Medicare eventually implement them, the impact on imaging industry profits and on physician profits from imaging could be large. MedPAC will vote on final recommendations early in 2005.

Seven recommendations

Commissioners seemed interested in moving ahead on all but one of the seven draft recommendations presented at the MedPAC meeting. That recommendation said HHS should "educate beneficiaries about the risks and benefits of imaging including the dangers of radiation exposure associated with overuse of imaging procedures." Commissioners said they weren't sure how that should be done or what it would accomplish.

To help weed out unneeded imaging, a second recommendation called for profiling individual doctors on the number and type of images they order and confidentially showing them how they compare with their peers. As in other types of physician profiling, the idea is to let data show doctors they can practice more efficiently and their peers already are doing so. The draft language said HHS should undertake such measurement and Congress should direct the department to do so.

Another recommendation deals with forms of billing that drive up Medicare spending on medical imaging. The draft language says the HHS Secretary "should improve Medicare's coding edits that detect unbundled and mutually exclusive services and reduce the technical component payment for multiple diagnostic imaging services performed on contiguous body parts." The "technical component" payment is for actually performing the imaging test as distinct from interpreting it.

Another draft recommendation said "Congress should direct the [HHS] Secretary to require all diagnostic imaging providers meet quality standards for imaging equipment, non-physician staff, the images produced, and patient safety protocols."

A fifth recommendation said "the Congress should direct the [HHS] Secretary to develop standards for physicians who bill Medicare for interpreting diagnostic imaging procedures. The standards should be based on the training, education, and experience required to interpret studies. The Secretary should have the authority to set less stringent standards in medically underserved areas."

A sixth draft recommendation would end the exemption doctors have who own nuclear medicine facilities from the so-called "Stark Law," which bars referrals by physicians to facilities in which they have a financial interest. Nuclear medicine facilities perform PET scans, which increasingly are covered by Medicare. The recommendation said "the Secretary should include nuclear medicine and head procedures as designated services under the Ethics in Patient Referrals Act." Doctors still could refer to owned-imaging of that kind under an exception for "in-the-office ancillary" care, but as a practical matter that kind of imaging isn't office-based, observers said.

The final draft recommendation said "the Secretary should expand the definition of physician ownership in the Ethics in Patient Referrals Act to include interests in an entity that derives a substantial portion of its revenue from a provider of designated health services." The language would target physician ownership of businesses that provide services and equipment to facilities covered by the self-referral prohibition.