GAO: New law reduces medical imaging costs

Congressional efforts to rein in Medicare spending on medical imaging technologies have been successful — and without sacrificing beneficiaries’ access to the latest tests and scans, according to a federal audit.

Seeking to halt spending that had doubled in seven years, Congress in 2006 had enacted new limits on fees paid to doctors for administering the tests, such as MRIs, CT scans and X-rays.

{mosads}The new law said the government would reimburse doctors for the lowest cost of such tests when comparing their fees with hospitals’.

In 2006, Medicare spent $13.8 billion on these tests performed by doctors, more than twice the $6.7 billion it cost in 2000. Under new standards put in place in 2007, Medicare spent $12.1 billion on medical imaging services performed in physicians’ offices, a 12.7 percent decline from the previous year, the Government Accountability Office (GAO) reports in findings requested by Sens. Jay Rockefeller (D-W.Va.) and Gordon Smith (R-Ore.).

By comparison, the average annual rate of increase from 2000 to 2006 was 12.9 percent, while the overall rate of growth in Medicare spending on all physician services during those years was 8 percent. Spending on more complicated imaging services, like CT scans and MRIs, grew faster than spending on X-rays and other, older technologies.

Imaging companies such as GE, Philips and Siemens, joined by many physician groups, fought hard against the fee reductions, warning that lower payments would lead to fewer doctors providing cutting-edge diagnostic services and make it harder for patients to obtain them.

Despite the continued protests of these interests, the GAO found that the number of imaging procedures performed continued to rise in 2007, though at a slower pace.

From 2000 to 2006, the number of these tests conducted in doctors’ offices rose from 42.6 million to 65.5 million, an annual growth rate of 7.4 percent driven largely by increased use of more advanced and more expensive technologies.

In 2007, Medicare paid for 65.9 million imaging tests, an increase of less than 1 percent. As a result of the new payment policies, fees for more than 90 percent of the MRIs and CT scans performed in doctors’ offices were paid at the lower rate. By contrast, only 20 percent of ultrasounds were assigned the lower fees.

But though the fees for these more advanced scans declined, the use of these tests rose at four times the rate for other types of imaging. Utilization of advanced imaging tests increased 3.9 percent in 2007, compared to a 3 percent increase in other tests.

Federal authorities traced the increased spending from 2000 to 2006 largely to more doctors buying imaging machines and using them in their offices, a change that coincided with rapid growth in the number of imaging scans, especially the more costly ones, billed to Medicare. To address these rising expenditures, Congress capped payment levels for many tests at the level that Medicare pays for the same tests in hospitals and other facilities.

The industry’s protests about access to imaging services appear to have been off the mark, according to the GAO. “Although implementing the [payment] cap raised concerns that reduced fees might curtail beneficiary access to physician imaging services, our analysis suggests that this did not occur in 2007,” the report states.

But, the GAO concedes, its findings are based on a national overview and not a regional evaluation. “Substantial geographic variation” in how many imaging tests were performed from 2000 to 2006 was one of the signs that the spending may not have been warranted, the report notes.

Industry groups seized on this caveat. “We believe the GAO’s findings are flawed,” reads a statement issued by the Medical Imaging and Technology Alliance. “Evidence from towns and cities across America is revealing that patients are being turned away from imaging at the point of service,” said a statement from the Access to Medical Imaging Coalition, an umbrella group consisting mainly of imaging equipment makers and physician groups.