Association for Quality Imaging Issues Comment on Medicare Program: Modernizing, Clarifying Physician Self-Referral Regulations

WASHINGTON, Jan. 23 -- Association for Quality Imaging has issued a public comment on the Centers for Medicare and Medicaid Services's proposed rule entitled "Medicare Program: Modernizing and Clarifying the Physician Self-Referral Regulations". The Comment Submitted by Maggie Sayre, CEO/executive director; Clete Madden, chairman of the board, president and COO of Touchstone Medical Imaging, LLC, Franklin, TN; Steve Forthuber, vice chairman, president & COO of RadNet, Inc., Baltimore, MD; Rich Jones, COO of Alliance Radiology, Newport Beach, CA; Eric Schnipper, M.D., M.B.A. radiologist, RadNet, New York, NY; Rick Long, CEO, Center for Diagnostic Imaging, Minneapolis, MN; Scott Arant, CEO, American Health Imaging, Atlanta, GA; Per B. Normark, General Counsel, Center for Diagnostic Imaging, Minneapolis, MN; Howard Berger, M.D Chairman & CEO, RadNet, Los Angeles, CA; Robert Carfagno, CEO, Radiology Affiliates Imaging, Trevose, PA; Aaron Ramsay, CEO, Envision Radiology, Colorado Springs, CO; Joel Schuessler, General Counsel, MedQuest Associates, Alpharetta, GA. The comment was written on Dec. 30, 2019, and posted on Jan. 15, 2020:

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The Centers for Medicare & Medicaid Services ("CMS") proposed new regulations (the "Proposed Rule") to modernize and clarify the regulations that interpret the federal physician self-referral law. Many of the proposals in the Proposed Rule are intended to address the health care industry's shift from the traditional fee-for-service model toward a value-based payment and delivery model. On behalf of the Association for Quality Imaging ("AQI"), we urge CMS to add provisions to the Proposed Rule limiting the in-office ancillary services ("IOAS") exception1 (or eliminating the exception in its entirety); and to incorporate changes described below to the electronic health records ("EHR") exception2. AQI represents over seven hundred imaging centers and three hundred mobile imaging units throughout the United States. AQI members aim to provide the most effective, high quality, and patient-centered care available to Medicare beneficiaries. Incorporating the changes suggested in this letter would further CMS' goal of deterring overutilization and promoting more value-based care.

I. The IOAS Exception

AQI and its members are deeply concerned that the purpose of the physician selfreferral law is being thwarted by a minority of referring physicians who exploit the IOAS exception and have used the exception in ways that may harm patients and increase cost to the Medicare program. For these reasons, we believe that the Proposed Rule should preserve the original intent of the IOAS exception and protect Medicare beneficiaries and resources from misaligned provider financial incentives.

The original intent of the physician self-referral law was to ensure that quality patient care was not affected by a physician's personal gain. The IOAS exception was intended to enable referring physicians to make rapid diagnoses and initiate treatment during patient office visits as well as improve patient convenience and adherence. Unfortunately, use of the IOAS exception has greatly expanded beyond its original intent and has resulted in the abusive arrangements the physician self-referral law originally intended to prohibit. Since its inception, physician self-referrals for advanced diagnostic imaging ("ADI") services have significantly grown. A portion of this growth is attributable to the unrestrained use of the IOAS exception, which allows inappropriate utilization of ADI services and ultimately increases health care costs.

Moreover, as numerous studies suggest, the IOAS exception is placing a financial burden on the Medicare program and encouraging the overutilization and improper use of referrals for ADI services. Many studies, and our industry experience, confirm that ADI is overused by selfreferring physicians. Not only does the IOAS exception, in its current form, contradict the original intent of the physician self-referral law, but it also defeats the Proposed Rule's goal of transitioning towards a value-based health care delivery system because it incentivizes overutilization.

Studies show that ADI performed in the office of a referring physician are not commonly used to make rapid diagnoses, nor are they regularly performed during the same office visit. For example, a 2010 report by the Medicare Payment Advisory Commission ("MedPAC") found that only 8% of nuclear medicine studies occurred on the same day, 8-9% of MRI studies occurred on the same day, and 25% of CT studies occurred on the same day.3 In 2010, the Government Accountability Office ("GAO") estimated that providers who self-referred likely made 400,000 more referrals for ADI services that year than they would have if they were not self-referring.4

From 2004 through 2010, the number of self-referred ADI services increased by more than 80% compared to an increase of 12% of non-self-referred ADI services. The GAO also noted that providers' referrals of ADI substantially increased by 67% the year after the provider began to self-refer. This has a monumental fiscal impact on the Medicare program; the GAO estimated that the increase in self-referrals cost the Medicare program close to $109 million in 2010 alone.

Additionally, in 2011, MedPAC reported that physician investment in ADI equipment contributed to the rapid growth of imaging and other tests under the physician fee schedule and has resulted in a high level of utilization that likely includes unnecessary services.5 The same 2011 MedPAC Report found that physician self-referral of ancillary services when combined with fee-for-service payment systems resulted in rapid volume growth that contributes to Medicare's growing financial burden on taxpayers and beneficiaries.

As these studies suggest, the IOAS exception is placing a financial burden on the Medicare program and encouraging the overutilization and improper use of referrals for ADI services. Most importantly, patients suffer clinically from abusive self-referrals. A 2012 study by Health Affairs found that Medicare costs rose as a result of the IOAS exception, yet fewer diagnoses were made.6 The study explored the impact of the IOAS exception as it pertains to urologists - finding that the self-referring physicians conducted many unwarranted procedures because they financially benefitted. Urologists who self-referred billed Medicare for 72% more specimens for patients than did urologists who referred specimens to independent providers.

Despite the increase in testing, the per-patient cancer rate detection for self-referring physicians was 12% less than the rate for urologists who did not self-refer.

To curtail these abuses and achieve the intended purpose of both the physician selfreferral law and the Proposed Rule, AQI believes the IOAS exception should be amended to include additional requirements or eliminated in its entirety. At a minimum, to address those concerns, we ask that CMS consider adding two additional requirements to the IOAS exception in the rule that would be applicable to ADI services:

1. Require ADI services to be furnished on the same day as the referring physician's encounter with the patient that resulted in the referral for ADI services; and

2. Require ADI services to be furnished in the same building in which the referring physician's encounter with the patient resulted in the referral for ADI services, unless a physician practice with multiple locations utilizes a single centralized location for ADI services on an exclusive basis.

These requirements would ensure that the intended purpose of the IOAS exception--to make rapid diagnoses and initiate treatment during patient office visits--could still be achieved while also meeting the Proposed Rule's goal of eliminating the potential for overutilization and self-referral abuses.

Incorporating these suggested changes into the Proposed Rule would also align the revised physician self-referral law with current legislation under consideration by the House of Representatives. In April 2019, Reps. Jackie Speier (D-California) and Dina Titus (D-Nevada) introduced H.R. 2143, the Promoting Integrity in Medicare Act ("PIMA"). PIMA redefines the IOAS and physician services exception by narrowing the scope of the exceptions and adding a compliance review program. AQI supports PIMA and believes its proposed changes to the IOAS exception could be a good model for the Proposed Rule. PIMA prohibits physicians from self-referring for four complex services which are not typically performed at the time of the patient's initial office visit: ADI, anatomic pathology, radiation therapy, and physical therapy. We strongly urge CMS to take this opportunity to advance the goal of value-based care by following the policies proposed in PIMA to narrow the IOAS exception as part of the agency's efforts to revise the physician self-referral law.

II. The EHR Exception

The Proposed Rule includes several amendments to the EHR exception intended to further the exception's original purpose of encouraging widespread implementation of EHRs and allowing smaller provider groups to accept gifts of EHR software without violating federal fraud and abuse laws. We believe that relaxing the conditions on EHR donations would unfairly disadvantage providers unaffiliated with major health systems, such as independent imaging centers, by reducing competition and improperly influencing referral sources.

Under the current EHR exception, the recipient must pay at least 15% of the donor's costs of the donated items and services in advance of receiving such items and services. In the Proposed Rule, CMS solicited comments on alternatives to the current 15% contribution requirement, including the proposal to eliminate the 15% contribution requirement for all recipients. AQI opposes this proposal because removing this recipient cost-sharing condition offers hospitals the opportunity to improperly use the donation of EHR items and services for the purpose of tying referral sources to their network. Eliminating the 15% contribution requirement would make it even easier for hospitals to provide unlimited donations of technology to physicians and thus steer more patients away from independent imaging centers. We believe that the EHR exception must - at least - preserve its existing safeguards in order to maintain a competitive landscape for all providers.

Finally, AQI strongly supports the proposal to add requirements to the EHR exception that would require greater interoperability and prohibit information blocking. All practices of information blocking are harmful to patient care and should be prohibited. When a health system attempts to control referrals and enhance market dominance by limiting access to patient health records to specific providers operating on the same health information platform, it effectively shuts out providers who may be better equipped to handle the patient's needs. This conduct can be detrimental to independent medical providers who are blocked from accessing or receiving patient health records and information, and is ultimately damaging to the patient seeking care.

AQI and its members appreciate the opportunity to provide CMS with comments and recommendations on revisions to the Proposed Rule. As always, we are prepared to meet and discuss our recommendations with you.

Respectfully submitted,

Board of Directors,

Association for Quality Imaging

Maggie Sayre

CEO/Executive Director, Association for Quality Imaging

Washington, D.C.

Clete Madden

Chairman of the Board, Association for Quality Imaging

President & COO, Touchstone Medical Imaging, LLC

Franklin, TN

Steve Forthuber,

Vice Chairman, Association for Quality Imaging

President & COO, RadNet, Inc.

Baltimore, MD

Rich Jones

COO, Alliance Radiology

Newport Beach, CA

Eric Schnipper, M.D., M.B.A.

Radiologist, RadNet

New York, NY

Rick Long

CEO, Center for Diagnostic Imaging

Minneapolis, MN

Scott Arant

CEO, American Health Imaging

Atlanta, GA

Per B. Normark

General Counsel, Center for Diagnostic Imaging

Minneapolis, MN

Howard Berger, M.D.

Chairman & CEO, RadNet

Los Angeles, CA

Robert Carfagno

CEO, Radiology Affiliates Imaging

Trevose, PA

Aaron Ramsay

CEO, Envision Radiology

Colorado Springs, CO

Joel Schuessler

General Counsel, MedQuest Associates

Alpharetta, GA

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The proposed rule can be viewed at: https://beta.regulations.gov/document/CMS-2018-0082-0394

TARGETED NEWS SERVICE, Harwood Place, Springfield, Virginia, USA: Myron Struck, editor; 703/304-1897; [email protected]; https://targetednews.com