California Study: Growth in imaging spurred by physician self-referrals
California imaging growth attributed to self-referring physicians. Source: U.S. Air Force  
Increased referrals for CT, MRI and PET scans for privately insured patients in California is directly related to the number of physicians who refer patients to their own facilities, according to a study published in the April issue of Medical Care.

Jean M. Mitchell, PhD, a professor of public policy at Georgetown University in Washington, D.C., reviewed data collected between 2000 and 2004 by a large private insurer in California and compared that analysis to a report by the Medicare Payment Advisory Commission.

For purposes of the study, imaging was considered a self-referral if it was billed by non-radiologist physicians in small- to medium-size groups, who had imaging equipment in their offices or financial relationships with another provider who conducted the imaging.

The results showed that overall utilization of MRI scans in California increased approximately 50 percent from 2000 to 2004 and scans performed by self-referring physicians rose by as much as 374 percent in some patient groups, reported U.S. News & World Report.

Mitchell said that the bulk of the increase was for privately insured patients that paid a fee for service reimbursement.

"For many cases, use of an advanced imaging procedure in lieu of a less expensive diagnostic procedure results in higher revenues (profits) to the provider without any commensurate improvements in outcomes or quality," Mitchell wrote.

The study also found that many doctors did not have imaging equipment in their offices, but instead, they leased an imaging center's facilities and employees for a fixed amount of time per week, according to Vivian Ho, PhD, a professor of medicine at Baylor College of Medicine and an associate professor of economics at Rice University, reported U.S. News & World Report.

Most scans continue to be performed by independent radiologists and hospitals, according to Mitchell. For example, rates of hospital-performed MRI imaging per 1,000 enrollees in 2004 among men 45 and older were 16.92 in southern California and 14.32 in the north. For radiologist-performed MRIs, the corresponding rates were 37.20 and 15.33, she noted.

The 2004 rates of self-referred MRIs for men 45 and older were 8.01 in the south and 3.76 in the north, while the increases from 2000 rates were larger for self-referred MRIs than for radiologists or hospitals: 155.3 percent in the north and 328.2 percent in the south, according to the study.

The growth rates for radiologist-performed MRIs were 65.8 percent in the south and 30.8 percent in the north, and for hospital-performed MRIs the corresponding figures were 22.1 percent and 64.2 percent, according to the findings.

PET scans overall saw a huge surge during the study period, Mitchell reported, with usage rising from 2.4 scans per 10,000 enrollees in 2000 to nearly 12 per 10,000 in 2004. In northern California, self-referrals were essentially non-existent for PET scans in 2000, but by 2004, they accounted for 18.9 percent of usage in northern California among older men and 11.9 percent among older women, Mitchell noted.

In the southern California, self-referrals accounted for 7.9 percent of PET scans in 2000 among older men and 30.3 percent in 2004. Less than 1 percent of PET scans in older women were self-referred in 2000, rising to 34.4 percent in 2004.

"This creates revenues for both parties involved," Ho noted in a commentary about the study. "But it also raises a lot of questions, such as would it have mattered if another test had been done, one that didn't receive a reimbursement?"

Ho said that eliminating reimbursements would penalize doctors who actually provide in-office imaging as a convenience to patients. She said better measures are needed to distinguish genuinely patient-driven decisions on imaging referrals from those motivated by physicians' pecuniary interests, however, Mitchell said more fundamental change is needed.

"The whole driving force is fee-for-service medicine," Mitchell said. As long as physician income is tied to the number of procedures they perform, the incentive to maximize them would always be there, she added.