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Medicare Advisory Group Urges Closer Look at Costs for MRIs, CT Scans

BY Betty Ann Bowser  June 20, 2011 at 1:59 PM EDT

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A 17-member independent advisory group has urged Congress to get tough on doctors who order too many diagnostic imaging tests for Medicare patients. These tests include MRIs and CT scans, which the Medicare Payment Advisory Commission (MedPAC) says are driving up the cost of health care for America’s seniors.

In its latest report to lawmakers, MedPAC, an independent congressional  advisory agency established in 1997,  said doctors who invest in their own imaging equipment and place it in their offices have “contributed to the rapid growth of imaging and other tests” and have “resulted in a high level utilization that likely includes unnecessary services.” When a doctor orders an X-ray or MRI for a patient, and that test is given in the physician’s office, the doctor keeps the profit from the charge for that test.

Under the new recommendations, MedPAC would have the Centers for Medicare and Medicaid Services come up with guidelines for ordering these tests, and doctors who order too many of them would have to get prior approval.

The proposal has set off a howl of protest from doctors and medical groups who argue it will delay much-needed medical care for Medicare patients and likely intrude on the doctor-patient relationship.

According to Politico Pro, the American Medical Association is circulating a sign-on letter urging members to oppose the MedPac recommendations. The letter says if followed they will not drive heath costs down, as MedPac intended, but push them up by driving patients to hospitals for the tests, where they are traditionally more expensive.

The MedPAC recommendation is also taking heat on the political front. In May, even before it was issued, House Energy and Commerce Health Subcommittee Chairman Joe Pitts, a Republican, and ranking member Frank Pallone, a Democrat, wrote MedPAC Commission Chairman Glenn Hackbarth and questioned the commission’s conclusion that imaging is a major contributor to increased Medicare spending.

This is not the first time Congress has looked into Medicare imaging spending.

In 1989, it passed a law that prohibits doctors from making money when they refer patients to outside testing centers in which they have financial interests.

More recently, Congress mandated that Medicare cannot pay a doctor more for imaging services than it does in a hospital outpatient facility.

The new health law also requires physicians who refer Medicare and Medicaid patients to their own in-house imaging services to disclose their financial interests in the equipment. They must also give patients a list of at least 10 other testing facilities within 25 miles to also choose from. And the law calls for payments for imaging to be cut by $3 billion over the next 10 years.

The Government Accountability Office looked at the issue of the cost of imaging for seniors and found that when doctors were required to get prior approval, spending went down 12 to 13 percent.

Congress is not required to go along with MedPAC recommendations. But in this climate of heated debate over how to lower the federal deficit, lawmakers may take a closer look.