Medicare panel mulls oversight of outpatient imaging services

Washington -- Rapid growth in Medicare spending for imaging services and concerns about the safety of equipment in doctors' offices soon could lead to tougher federal oversight and regulation.

At its March meeting, the Medicare Payment Advisory Commission considered the prospect of using private-sector strategies to try to rein in Medicare spending for outpatient imaging services, but it was patient safety issues that caught the panel's attention.

Cherrill Farnsworth, CEO and chair of HealthHelp Inc., a radiology benefit management company, said her firm performs site visits to physicians' and other practitioners' offices to inspect imaging equipment and had found many safety problems.

"I don't think Medicare enrollees or any citizens of our country should be exposed to some of the old imaging equipment and high radiation doses that we see," Farnsworth said. "We've seen a lot of equipment that's pretty shocking that's used in physicians' offices."

HealthHelp recently undertook a review of imaging equipment used by chiropractors for a health plan in Utah. It found that 49% of the chiropractors used equipment that did not meet basic safety standards. And even when equipment is in good condition, doctors are not always trained on how to read the images correctly.

"We have discovered that the quality in a non-radiologist's office on equipment and on the professional read is very low," Farnsworth said. Studies have shown that non-radiologists have a 10% to 35% error rate in their imaging examinations. And 60% to 90% of all doctor-based imaging is performed by non-radiologists.

MedPAC Vice Chair Robert Reischauer, PhD, called the evidence alarming.

"We almost everywhere in the United States inspect cars for safety, but apparently not imaging equipment when we allow Medicare patients to go to those facilities," he said.

Congress addressed a similar problem with mammography equipment in 1992 when it passed the Mammography Quality Standards Act, which led to inspections of mammography equipment by the Food and Drug Administration beginning in 1995. A MedPAC recommendation could represent the first step toward inspections of other imaging equipment.

The American College of Radiology has developed an accreditation program for certain imaging services, such as magnetic resonance. About half of the MRI facilities in the country are accredited by ACR.

According to Tom Ruane, MD, medical director of PPO and care management programs for BlueCross BlueShield of Michigan, part of the problem is that physician practices cannot always afford the latest equipment and look for more affordable, older units.

"The diagnostic equipment that becomes somewhat obsolete in our tertiary medical centers often does not go to the Third World," he said. "It often goes down the street to another doctor's office where it lives another life."

BlueCross BlueShield of Michigan has restricted payment for imaging services to specific specialties. Radiologists are paid for all of their studies, and specialists are paid for other appropriate studies. Primary care physicians, however, are shut out, because the plan doesn't have the overhead to certify physicians on an individual basis.

A growth area

MedPAC's interest in the imaging sector stems from the 9% average annual growth in Medicare spending for diagnostic imaging since 1993. Most of that increase was fueled by a few specific categories -- nuclear medicine, certain CT scans and MRIs -- that are growing by 15% to 20% each year.

Dr. Ruane attributed the growth in imaging in part to defensive medicine, particularly given the rising liability premiums physician face in many parts of the country.

"I think that's a genuine concern of most physicians, but it's also maybe an excuse to act out for other physicians who are so annoyed with [the liability environment]," he said.

But there is also anecdotal evidence of a consumer demand for more frequent and more complex imaging services. As a result of direct-to-consumer advertising of full-body scans and other imaging procedures, patients have inundated physicians with requests for new and expensive screenings.

"We heard from a focus group of physicians who say that there is significant pressure at the office [from patients who] say, 'I want this procedure, I want this test,' " said Miriam Sullivan, director of Allied Health Services for the Tufts Health Plan, serving patients in Massachusetts, New Hampshire and Rhode Island.

The plan has seen a marked increase in physician-owned imaging equipment over the past 18 months and has experienced a 48% increase in advanced imaging procedures, including CT, MRI, nuclear cardiology and positron emission tomography, from 2000 to 2003.

The rate of growth of imaging services under Part B could prompt MedPAC to recommended restrictions to control spending growth. The commission could back site inspections, ensuring that minimum safety and quality standards are met. Medicare currently uses some coding edits to restrict inappropriate use of imaging but could expand those further, as many private plans have done.

Physicians are barred from referring patients to separate facilities in which they hold an ownership stake, but they can provide ancillary services within their own offices. Expanding the self-referral laws to cover in-office diagnostic imaging is potentially an option as well.

But with physician revenues from public-sector programs dropping, many practices are adding imaging capabilities. A recent study from the Medical Group Management Assn. found a 19% increase in the number of cardiology groups that offered office-based nuclear imaging in 2002. Unless new limits are introduced, that trend is likely to continue.

"This is one of the areas in which in fact the technology is considerably less expensive than it was four or five years ago," said Ralph Muller, managing director of the Chicago hospital consulting firm Stockap & Associates. "Some of the large companies, the General Electrics, the Siemens and so forth, seem to have an aspiration to put one of their imaging devices in every doctor's office in America."