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Inappropriate Utilization

Discussion

As it pertains to radiology, inappropriate utilization has historically focused on referrals made by physicians to facilities in which the referring physician holds a financial interest.  Studies published in medical journals and by governmental agencies demonstrated that these arrangements led to increased utilization and excessive public and private insurer and beneficiary costs.  Some data suggest that imaging performed by non-radiologists may compromise quality of care.

In 1988, the ACR Council passed a resolution encouraging legislation aimed at prohibiting inappropriate utilization.  That same year, Congressman Pete Stark (D-CA), introduced the first of several bills aimed at prohibiting the referral of patients to facilities where the referring physician held a financial interest.  Studies done between 1989 and 1993 began to confirm what had been long assumed: that self-referral activity led to the over utilization of certain medical services.  In 1989, President George H.W. Bush signed into law the Omnibus Budget Reconciliation Act of 1989.  That bill contained a section that prohibited the referral of patients to clinical laboratories where the referring physician held a financial interest.  In 1993, the Stark II Amendment to OBRA added to the self-referral law several other designated services including referrals made to diagnostic imaging centers and radiation therapy centers.

This legislation, however, created a significant exception whereby physicians or groups of physicians can own their own equipment and refer patients for imaging studies payable by Medicare if performed within their office.  Thus, the predominant form of inappropriate utilization persists and grows.  Studies have shown that an overwhelming preponderance of the growth of radiological procedures has come at the hands of non-radiologists.  There are regions where radiologists perform little of the outpatient MRI. Nuclear medicine and PET are also excluded from the Stark laws.

In the early 1990s, concerned about the impact of improper utilization on their states, New Jersey, Florida, Illinois, New York, California, Louisiana, Maine, North Carolina, Rhode Island, Maryland, Georgia, Virginia, South Carolina, and Tennessee passed legislation aimed at limiting joint venture self-referral.  Other states have since passed legislation aimed at reducing self-referral activity or requiring the referring physician to disclose to their patients ownership interests in facilities to which they refer.   However, inappropriate utilization continues to pose clinical and economic problems, partly because the federal government has not yet finalized the regulations that would support stricter enforcement of Stark II.  Recent challenges include the proliferation of imaging centers that offer costly MR, CT and PET studies that may not be medically indicated.   

ACR Position

• The position of the American College of Radiology is that inappropriate utilization of a diagnostic or therapeutic medical procedure may not be in the best interests of the patient. 
• The ACR supports legislative efforts prohibiting reimbursement for any diagnostic or therapeutic procedure carried out in a facility in which the referring physician has a direct or indirect financial interest. 
• The ACR will continue to work with interested parties (including the states) in determining the costs associated with inappropriate utilization on the health care system and to develop alternative approaches to assure that patients receive medically necessary services. 

Contact

For further information on inappropriate utilization activity and its effect on radiology services, please contact Ariel González at the ACR offices (800) 227-5463, ext. 4488.