Give + take: Budget proposal closes Stark exemption, pushes RBMs

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The Obama administration’s budget proposal for Fiscal Year 2014, announced April 10, recommended closing the in-office ancillary services exception (IOASE) to the Stark law, which the Office of Management and Budget (OMB) said would save the government over $6 billion over 10 years.

Due to political gridlock, the budget is not likely to pass. The fact there’s no legislative hammer with the proposal, though, doesn’t mean the recommendation to close the loophole in the Stark self-referral law is merely symbolic, noted Cindy Moran, assistant executive director for government relations and health policy for the American College of Radiology (ACR).

Health and Human Services Secretary Kathleen Sebelius currently has the legal authority to close the IOASE herself, and the 10-year savings score of $6 billion is not insignificant, Moran told Health Imaging.

“If the secretary decides to go forward and implement this policy administratively, then it would require the Congress to overrule her and then they would have to make up the budget cost,” she said.

The announcement was encouraging, said Ramsey K. Kilani, MD, a neuroradiologist at Duke University Medical Center in Durham, N.C., and member of the Future Trends Committee for ACR, who noted this was the first time the government has looked at addressing the in-office exemption for medical imaging within the Stark laws. “Previous to this, attempts to address medical imaging expenditure have come in the form of across the board cuts that didn’t specifically look at the over-utilized fraction,” he said.

The wording of the budget did add one wrinkle, saying the Stark law exception would remain available “in cases where a practice meets certain accountability standards, as defined by the Secretary.” At this time, it’s unclear exactly what that means, but Moran said it could be interpreted as setting up a process to allow certain integrated practices like accountable care organizations and medical homes to be exempt from the loophole closure.

Another recommendation in the budget proposal that concerns the medical imaging community is the imposition of third-party prior authorization for select imaging services through for-profit radiology benefit managers (RBMs). Statements released by ACR, the Access to Medical Imaging Coalition (AMIC) and the Medical Imaging & Technology Alliance all railed against this provision. AMIC’s executive director, Tim Trysla, said this policy would jeopardize access to care by inserting an “artificial middle-man” in the imaging process, while ACR said the budget itself “essentially renders this concept meaningless” by acknowledging the policy would not generate any savings.

Historically, prior authorization through radiology business managers has not led to the type of savings many expected, added Kilani. “I think that in many cases self-referrers are able to game the system or use the appropriate indications to get through that third-party authorization process.”