Orthopedist-owned MRIs a recipe for soaring costs

February 08, 2011|By Jay Hancock

The United States is the No. 1 prescriber of MRI scans, expensive radiological procedures used as an alternative to X-rays. This dubious distinction is one reason American health care is so expensive.

Maryland is No. 2 in the rate of MRI tests performed in the United States, an even more alarming accomplishment that inflates medical costs for residents and helps keep health-insurance premiums heading steadily upward.

A group of Maryland orthopedists and other doctors wants to make sure things stay that way.

They're trying to get the state legislature to nullify a Court of Appeals decision that would make them refer MRI and CT scan business to independent radiologists instead of performing scans themselves.

Last month the state's highest court ruled that Maryland's "self-referral" law prohibits orthopedists from ordering radiology tests for patients on their own machines.

As well it should. Study after study show that when doctors prescribing procedures also profit from the procedures, they prescribe lots more of them — more than twice as many, according to some investigations.

"Every single bit of research that has been done over the years has shown that when you allow self-referral, you're going to get a lot of extra and likely unnecessary utilization," said Dr. David Levin, professor emeritus of radiology at Thomas Jefferson University Hospital in Philadelphia and the author of much research on the subject.

The General Assembly understood this when it limited self referral in 1993, even for in-office procedures allowed under federal law. But Maryland orthopedists decided the law didn't apply to them. They began installing MRI machines in their offices and sued the state Board of Physicians when it objected. They lost before the Court of Appeals.

Doctors and their advocates paint a dire picture of what happens next.

If the legislature doesn't nullify the court decision, Maryland patients "become the only ones in the country who are not allowed to choose for themselves where they get medically needed MRIs and CTs," says Howard Rubin, a lawyer representing orthopedists and other doctors. (The Maryland law banning in-office MRI and CT scans is unique.)

Lord forbid a patient might have to drive to a separate radiology lab for a $1,000, state-of-the-art MRI scan paid for by government or insurance. But even when scans are done in the orthopedist's office, many patients have to make a second visit because of delayed insurance authorization or crowded schedules.

So much for the convenience argument.

Regardless, a lack of convenience isn't what's choking American health care. The system is becoming unaffordable because of too many unneeded heart stents, lab tests, surgeries and MRI scans.

It's unclear how many Maryland orthopedic practices are ordering up MRI scans on their own machines or how many other specialists — urologists searching for kidney stones with CT scans, for example — would be affected by the court decision.

"People are not exactly coming forward and saying they are doing this," says Thomas W. Keech, assistant attorney general for the Board of Physicians.

The coalition urging the General Assembly to allow self-referral includes 18 practices of orthopedists, urologists, urgent-care doctors and others, Rubin said.

What is clear is that the ownership of MRI machines by non-radiologists (ie. the treating physicians who order the tests) has ballooned, rising 245 percent from 2000 to 2005, according to the Center for Research on Utilization of Imaging Services at Thomas Jefferson University. The number of MRI tests also has been soaring, especially in Maryland.

"MRI utilization in Maryland is on the high end of things," says Laurence Parker, director of health services and outcome research at the center. "It's the second state overall" in MRI tests per capita reimbursed by Medicare, after Florida.

The average Medicare reimbursement per MRI scan in 2008 was $532, according to the American College of Radiology. Last year CareFirst BlueCross BlueShield, Maryland's biggest health insurer, paid $190 million for MRIs, CTs, X-rays and other imaging, a company spokesman said.

People defending self-referral portray this as a turf battle between the radiologists and the orthopedists and other treating physicians, which it is. But here's the thing: Radiologists don't have the power to run up medical bills on their own.

The medical system is exploding because financial incentives encourage dubious or unneeded procedures. A key step toward sanity is reducing those incentives by separating the people who prescribe the procedures — including orthopedists — from the people who profit from them — in this case radiologists.

Sure, medical procedures are often necessary, George Bernard Shaw wrote in a scathing commentary on physician self-referral a century ago.

"It may also be necessary to hang a man or pull down a house," he wrote. "But we take good care not to make the hangman and the housebreaker the judges of that. If we did, no man's neck would be safe, and no man's house stable."

Maryland's self-referral law is a model for the nation. The legislature should leave it substantially alone.

If they don't own the machines, orthopedists can prescribe MRI scans based on clinical need, not the need to make next month's MRI mortgage payment.


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