Urologists Follow the Money

"Follow the money," suggested Deep Throat, the source Washington Post reporter Bob Woodward consulted during the Watergate scandal in the 1970s, as the journalist tried to understand the Nixon administration's covert activities.

Today, that same advice applies if you're trying to figure out why some physicians might be ordering too many tests and procedures.

Over-ordering tests has been an issue for years in many aspects of healthcare. It's been investigated by outside agencies and continues to be—with one of the primary questions involving self-referral. The term "self-referral" describes arrangements in which a physician refers a patient to a healthcare facility in which the physician has a financial interest. Self-referrals can be considered legitimate, because of what many consider a loophole in the law.

Suspicious Physicians
Sometimes though, docs themselves get suspicious and upset when they see too much money being funneled to their colleagues or competitors.

That's how a number of urologist groups have been feeling as word spreads that some of their colleagues have been getting a lot of money by self-referral arrangements between urologists and pathology groups. The result? Too many tests, too many evaluations and money too easily made. It was all too convenient, too cozy, too much of an opening for abuse of the system.

With the publication of an article in Health Affairs this month, concerned urologists now feel that they have some added proof with which to persuade Congress that the loophole needs to be closed.

The Health Affairs study focused on self-referral among urologists who conduct prostate biopsy evaluations in their own pathology labs. It found that urologists involved in self-referral arrangements bill Medicare 72% more for specimen evaluations for patients who have suspected prostate cancer than urologists who send specimens to independent providers of pathology services.

More Billing, Less Detection
Oddly enough, despite the increased billing, the study found that self-referring urologists usually detect cancer at a much lower rate—about 57%—than do non-self-referring urologists, according to the study's author, Jean Mitchell, PhD, an economist at Georgetown University in Washington D.C.

The study findings show that "lower cancer detection rates linked to self-referring urologists suggest that financial incentives prompt those urologists to perform prostate biopsies on marginal cases," Mitchell writes. "Thus, self-referral of prostate surgical pathology services leads to increased use and higher Medicare spending, but lower cancer detection rates."

The Loophole
Mitchell says it's time that the government closes loopholes that enable some self-referral. Although there are federal and state laws designed to curb self-referral, one of the biggest exceptions refers to "in-office ancillary services," Mitchell says. The exception allows physicians and group practices to self-refer or "in source" certain health services, such as diagnostic imaging, physical therapy and anatomic "pathology."

"The findings support eliminating the exception that permits physicians to self refer patients to in-office pathology laboratories," Mitchell writes in her study. "Both government and commercial insurers could reduce health care spending substantially by adopting measures to restrict self-referral in this context."

"They should close it down; get rid of the loophole," Mitchell tells HealthLeaders Media.

"Get rid of the ancillary services exception and say you can't do it anymore. That exception was in there originally to deal with doctors who do simple blood or urine tests in their office for patient convenience or for the orthopedic surgeon who had an X-ray machine in his office. It was never meant for pathology services where you have to get a biopsy and send it to the lab. What has happened is that the ancillary services exemption allows doctors who aren't trained in one area to basically incorporate the services and practices of physicians in another area into their scope of practice, which is problematic."

"Self-referral is an important concern in health policy because it injects financial self-interest into decisions regarding patient care," Mitchell wrote. She noted that research on advanced imaging shows that self-referral "results in increased use of imaging and escalating healthcare expenses, with little or no benefit to patients."

 

Mitchell wrote, "Although self-referral for advanced imaging is widespread, the consequences of self-referral on the use of other ancillary services, such as surgical pathology services, has received little attention." She says there is "anecdotal evidence that self-referrals have become increasingly prevalent in recent years."

Mitchell's report adds academic weight to growing concerns about self-referrals. In December 2010, The Wall Street Journalwrote that "groups of urologists across the country have teamed up with radiation oncologists to capture the lucrative reimbursements" of intensity-modulated radiation therapy (IMRT). 

The Journal reported that critics of the procedures, including "independent radiation oncologists who are losing business, say the urology groups steer many patients toward IMRT for financial gain," which could include Medicare payments of $40,000 per patient.

Physician groups are reacting to the Mitchell report. The Alliance for Integrity in Medicare, a coalition of medical specialty, laboratory, radiation oncology and medical imaging groups, said it welcomed the study because it provides independent, peer-reviewed evidence that the self-referral practice, in which urologists use their own pathology labs to test prostate biopsies for cancer  provides no benefits to patients, and is only serving to drive up Medicare costs.

"There is increasing evidence of self-referral leading to similar inappropriate, unnecessary overutilization of radiation therapy services for prostate cancer patients," said Laura I. Thevenot, of the American Society for Radiation Oncology, one of the sponsors of the study, in a statement.

In the wake of the Mitchell study, it's time that Congress follows the money and closes the self-referral loophole for good.