ACR Breaks Down Inspector General Report: Growth in Advanced Imaging Paid Under the Medicare Physician Fee Schedule
Summary and Analysis of Report by
Office of Inspector General, U.S. Department of Health and Human Services,
Growth in Advanced Imaging Paid Under the Medicare Physician Fee Schedule
(OEI-01-06-00260), October 2007
Summary
A recent Office of Inspector General (OIG) report documented the nature and extent of utilization and spending for advanced imaging services (computed tomography, magnetic resonance imaging, and positron emission tomography) paid under the Medicare Physician Fee Schedule (MPFS) provided in physicians’ offices and independent diagnostic testing facilities (IDTFs) between 1995 and 2005.
The report has found that both utilization and allowed charges for advanced imaging grew significantly between 1995 and 2005 and that utilization across states varied substantially throughout the period. The report presents spending by provider specialty and discusses at length the rapid growth of advanced imaging in IDTFs. The report recommends that the Centers for Medicare & Medicaid Services (CMS) monitor the growth of advanced imaging performed in ambulatory settings and reissue technical direction to Medicare carriers regarding oversight of the new IDTF performance standards as part of such monitoring. The OIG report may be found at www.oig.hhs.gov/oei/reports/oei-01-06-00260.pdf.
Analysis
Table 1 below is derived from information presented in the OIG report.
| Table 1. Imaging Billings by Selected Specialties, 1995 and 2005 | |||||
| CMS Specialty Description | Number of studies, 1995 | 1995 share of studies | Number of studies, 2005 | 2005 share of studies | AAGR**, 1995-2005 |
| Urology | 1,572 | 0.11% | 79,498 | 1.29% | 48.0% |
| IDTF/IPL* | 37,939 | 2.63% | 1,403,156 | 22.77% | 43.5% |
| Orthopedic surgery | 4,841 | 0.34% | 160,672 | 2.61% | 41.9% |
| Cardiology | 1,954 | 0.14% | 57,086 | 0.93% | 40.1% |
| Medical oncology | 2,590 | 0.18% | 58,253 | 0.95% | 36.5% |
| Radiation oncology | 4,870 | 0.34% | 107,578 | 1.75% | 36.3% |
| Hematology/oncology | 8,196 | 0.57% | 120,256 | 1.95% | 30.8% |
| Family practice | 6,642 | 0.46% | 75,573 | 1.23% | 27.5% |
| Otolaryngology | 2,402 | 0.17% | 24,487 | 0.40% | 26.1% |
| Rheumatology | 2,800 | 0.19% | 27,669 | 0.45% | 25.7% |
| Pulmonary disease | 2,281 | 0.16% | 18,516 | 0.30% | 23.3% |
| Internal medicine | 16,599 | 1.15% | 132,097 | 2.14% | 23.0% |
| Neurosurgery | 4,127 | 0.29% | 24,256 | 0.39% | 19.4% |
| Gastroenterology | 2,583 | 0.18% | 13,645 | 0.22% | 18.1% |
| Nuclear medicine | 7,805 | 0.54% | 32,285 | 0.52% | 15.3% |
| General practice | 7,125 | 0.49% | 22,560 | 0.37% | 12.2% |
| Diagnostic radiology | 1,203,662 | 83.39% | 3,556,470 | 57.72% | 11.4% |
| Thoracic surgery | 1,395 | 0.10% | 3,755 | 0.06% | 10.4% |
| General surgery | 3,153 | 0.22% | 7,946 | 0.13% | 9.7% |
| Interventional radiology | 28,991 | 2.01% | 72,359 | 1.17% | 9.6% |
| Total | 1,443,493 | 100.00% | 6,161,162 | 100.00% | 15.6% |
| * Independent Diagnostic Testing Facility/Independent Physiological Laboratory | |||||
| **Average annual growth rate | |||||
While the most recently available data from the OIG indicate that diagnostic radiology accounts for the majority of advanced imaging billings, its share of total billings shrank dramatically between 1995 and 2005. Moreover, Diagnostic Radiology’s growth rate over that 10-year period was less than average and much lower than that for other prominent specialties.
CMS agrees with the recommendation of the OIG that CMS should reissue technical direction of Medicare carriers regarding oversight of new IDTF standards, but notes that it does not have funding to support unannounced site visits of IDTFs.
Data presented in the OIG report (but not discussed in text) reveal that 2001 was the year of greatest year-over-year growth rates in services and allowed charges for advanced imaging services overall. Since then, growth rates have generally trended downward. Allowed services growth in 2005 was 17 percent for CT compared with 23 percent at its peak in 2002. MR grew 10 percent in 2005, down from and 27 percent in 2001. PET growth has displayed a similar time pattern but on an entirely different scale; growth in PET allowed services peaked at 345 percent in 2001, but moderated to 36 percent in 2005. Further, language from CMS contained in the OIG report states that “preliminary analysis of 2006 claims data shows that the overall rate of growth in imaging services is declining.”
The OIG report presents allowed services and charges data for technical component (TC) and professional component (PC) services combined. Separating the TC from the PC and calculating growth separately might have produced very different results; specifically, growth rates in TC services and charges may well have exceeded those for the PC.
Some elements are missing from the OIG report. While it implies much of advanced imaging is inappropriate by showing the vast geographic differences in utilization rates, it does not attempt to measure the extent of inappropriateness. Similarly, it does not discuss the problem of self-referral or cite numerous studies that show that imaging associated with self-referral is at least double that of non-self-referred imaging. Nor does it address how imaging has replaced other forms of diagnosis and treatment that are more invasive, less convenient to the patient, and possibly more costly.
Further imaging growth rate reductions will likely show up for 2007 and beyond due to the Deficit Reduction Act of 2005 (MPFS-HOPPS lesser-of payments and multiple procedure payment reductions), while imaging continues to be a prime target when Congress is looking for ways to cut Medicare expenditures.
Imaging and self-referral are still on the OIG’s radar screen. The agency’s work plan for 2008 includes determining the appropriateness of payments for diagnostic X-rays and interpretations in hospital emergency departments based on an analysis of Medicare Part B claims and medical records. Also, the OIG will review the arrangements under which MRI is provided by describing the business relationships among physicians, billing providers, and others who work together to provide imaging services and determine whether financial relationships among the parties involved in providing services are associated with high use of services. Finally, the OIG will investigate business arrangements that allegedly violate the federal health care anti-kickback and the statutory limitation on self-referrals by physicians.
This summary and analysis was prepared by James W. Moser, Ph.D., Senior Health Policy Research Economist, American College of Radiology, 1891 Preston White Drive, Reston, Virginia 20191, 703-648-0690.
