OIG inspectors may
be cracking down

Imaging Costs Prompt OIG Inspections

October 14, 2009
by Brendon Nafziger, DOTmed News Associate Editor
The U.S. Department of Health and Human Services Office of Inspector General announced it was going to investigate the use of emergency room X-rays and imaging reimbursements, including utilization rates, according to its "work plan" for fiscal 2010 released on Oct. 2.

According to the plan, the OIG intends to see whether the high cost of some imaging services is justified by looking into Medicare Part B payments for taking and interpreting X-rays in the emergency room, as well as reimbursements for most Part B imaging procedures. This last investigation includes weighing in on the controversial assumed utilization rates.

ER waste?

According to the OIG, in 2007 Medicare shelled out over $200 million in reimbursements to physicians interpreting imaging in the emergency room. Presumably, OIG wants to see if this money is going to waste.

But Shawn Farley, a spokesman for the American College of Radiologists, tells DOTmed News it's a strange practice to investigate. "It is unusual that OIG would pick that area," he says. "I don't know what their concern is."

"These docs have seconds to make their decisions," he adds, noting that the potential for abuse is almost non-existent.

"The fundamental thing we want people to understand is that the only referral pattern in which a financial incentive to have more referrals exists, is in the self-referral setting," Farley says, which doesn't apply to emergency rooms, where an ER physician wouldn't see any of the money going to an on-the-spot radiological test.

Nonetheless, Farley says ACR has created a set of appropriateness criteria, covering over 200 clinical conditions, made available to ER doctors free of charge, so they can make better on-the-fly decisions for ordering imaging exams.

Regardless of its reasons, OIG expects its investigation into this field to be complete in fiscal 2010.

Utilization rates under scrutiny

The OIG will also look into reimbursements for imaging services to physicians. They intend to investigate practice expenses, which are payments that cover equipment costs, overhead and staff salaries.

But they also say they'll see if the utilization rates are accurate, which makes them at least the third governing body to look into utilization rates this year.

Under most Medicare plans, physicians are paid for their imaging equipment based on assumed usage. But in proposed changes announced this summer, the Centers for Medicare & Medicaid Services (CMS) plans on increasing the assumed utilization rates on expensive imaging equipment from 50 percent to 90 percent, meaning they think MRI or CT scanners are actually in use 45 hours out of a 50 hour workweek, and will thus, in effect, pay physicians less per procedure.

Both houses of Congress, in health care reform bills, are looking to increase assumed utilization rates, too, probably to around 75 percent.

However, these numbers are disputed, and the ACR suggests an OIG investigation could reveal what it believes are the real, lower assumed utilization rates.

"The Radiologist Business Managers Association [recently] did national sampling and discovered the actual utilization rate," Farley says. "And they found it's only 54 percent nationwide, and 48 percent in rural practices."

Farley says the 90 percent number used by CMS comes from a MedPAC survey of large, urban hospitals not representative of most imaging centers, and certainly not small, country ones.

What radiologists can expect

While the odds of an OIG agent showing up at a radiologist's office as part of an investigation are low, it could happen, Farley says. That's why the ACR is advising all radiologists to make sure their books are in order. "We're advising staff to document all exams," Farley says. "Our advice is to keep good records."

As for the increase in imaging costs, Farley says it should be seen in perspective. When the OIG or CMS looks at the costs of imaging rising from 1990 to 2006 -- around 2 percent a year in 2006 and 2007, Farley says, which he claims is in line with most other medical practices -- it's not, he thinks, evidence of something wrong, but of something right: imaging services are safe, accurate alternatives to invasive diagnostic methods.

"In the 1940s and '50s, orders for penicillin grew at a rapid rate -- because it worked," he says. "You can't simply look at growth rates in a vacuum."

Read DOTmed's additional coverage:
OIG to Open New Studies on Medicare Part B Imaging, DME Services