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The Government Accountability Office (“GAO”) published a report in September 2012 indicating that providers who self-referred patients for MRIs, CTs, and PET services cost Medicare about $109 million more in 2010 than it would have if the patients obtained the services from entities that did not employ, and were not owned by, the referring physician.

The GAO report argues that financial incentives are a major factor for the increase in the number of advanced imaging services ordered, based on the finding that providers who purchased or leased imaging equipment, or who joined practices that self-referred, substantially increased their referrals for MRIs and CTs. For example, the number of self-referred MRI services from 2004 through 2010 increased more than 80%, while the number of self-referred CTs during the same time period more than doubled.

As a result of the findings in the report, the GAO calls for a modifier “flag” that would be required on the submission of claims that involved a self-referred advanced imaging service. The GAO also proposed a payment reduction for self-referred advanced imaging services. The policies of the Centers for Medicare and Medicaid Services that restrict physician self-referrals were noted by the GAO as having a positive effect in reducing the utilization of the imaging services.

The GAO report is an indicator of the government’s persistence in detecting, monitoring, and curtailing certain types of referrals that the government perceives as abusive. This confirms the trend of increasing reviews and investigations into a physician’s referral patterns.

To read the full report, click here.