USE OF IMAGING SERVICES: 

PROVIDING APPROPRIATE CARE 

FOR MEDICARE BENEFICIARIES 

HEARING 

BEFORE THE 

SUBCOMMITTEE ON HEALTH 

OF THE 

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED NINTH CONGRESS 

SECOND SESSION 

JULY 18, 2006 

Serial No. 109-132 

Printed for the use of the Committee on Energy and Commerce 

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

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WASHINGTON : 2006 

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31-334PDF 
COMMITTEE ON ENERGY AND COMMERCE 

JOE BARTON, Texas, Chairman 

RALPH M. HALL, Texas 

MICHAEL BILIRAKIS, Florida 

 Vice Chairman 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

PAUL E. GILLMOR, Ohio 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

CHARLIE NORWOOD, Georgia 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN B. SHADEGG, Arizona 

CHARLES W. “CHIP” PICKERING, Mississippi 

 Vice Chairman

VITO FOSSELLA, New York 

ROY BLUNT, Missouri

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

CHARLES F. BASS, New Hampshire 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

C.L. “BUTCH” OTTER, Idaho 

SUE MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

JOHN D. DINGELL, Michigan 

 Ranking Member 

HENRY A. WAXMAN, California 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

SHERROD BROWN, Ohio 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

ALBERT R. WYNN, Maryland 

GENE GREEN, Texas 

TED STRICKLAND, Ohio 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MIKE DOYLE, Pennsylvania 

TOM ALLEN, Maine 

JIM DAVIS, Florida 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

BUD ALBRIGHT, Staff Director 

DAVID CAVICKE, General Counsel

REID P. F. STUNTZ, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON HEALTH 

NATHAN DEAL, Georgia, Chairman 

RALPH M. HALL, Texas 

MICHAEL BILIRAKIS, Florida 

FRED UPTON, Michigan 

PAUL E. GILLMOR, Ohio 

CHARLIE NORWOOD, Georgia 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

CHARLES W. “CHIP” PICKERING, Mississippi 

STEVE BUYER, Indiana 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO, California 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

SUE MYRICK, North Carolina 

MICHAEL C. BURGESS, Texas 

JOE BARTON, Texas 

 (EX OFFICIO)

SHERROD BROWN, Ohio 

 Ranking Member 

HENRY A. WAXMAN, California 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

GENE GREEN, Texas 

TED STRICKLAND, Ohio 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

TOM ALLEN, Maine 

JIM DAVIS, Florida 

TAMMY BALDWIN, Wisconsin 

JOHN D. DINGELL, Michigan 

 (EX OFFICIO)

(II)
CONTENTS 

Page 

Testimony of: 

Kuhn, Herb, Director, Center for Medicare Management, Centers for Medicare & 

Medicaid Services, U.S. Department of Health and Human Services ......................... 20 

Hackbarth, Glenn M., Chairman, Medicare Payment Advisory Commission ................... 27 

Douglas, Dr. Pamela S., Chief, Division of Cardiovascular Medicine, Duke University 

Medical Center ............................................................................................................... 72 

Van Moore, Dr. Arl, Chair, Board of Chancellors, American College of Radiology........ 82 

Donahue, John J., President and Chief Executive Officer, National Imaging 

Associates, Inc................................................................................................................ 92 

Laube, Dr. Doug, President, American College of Obstetricians and Gynecologists........ 100 

Griffeth, Dr. Landis, Director, Nuclear Medicine, Baylor University Medical Center ..... 112 

May, F. Lynn, Chief Executive Officer, American Society of Radiological 

Technologists ................................................................................................................. 119 

Baumgartner, Robert, Chief Executive Officer, Centers for Diagnostic Imaging ............. 123 

Rucker, Dr. Donald W., Vice President and Chief Medical Officer, Siemens Medical 

Solutions USA, Inc......................................................................................................... 137 

Additional material submitted for the record: 

Kuhn, Herb, Director, Center for Medicare & Medicaid Services, U.S. Department of 

Health and Human Services, response for the record.................................................... 165 

Hackbarth, Glenn M., Chairman, Medicare Payment Advisory Commission, response 

for the record .................................................................................................................. 167 

(III) 

(1) 

USE OF IMAGING SERVICES: 

PROVIDING APPROPRIATE CARE FOR 

MEDICARE BENEFICIARIES 

TUESDAY, JULY 18, 2006 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ENERGY AND COMMERCE, 

SUBCOMMITTEE ON HEALTH, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:13 a.m., in Room 

2123 of the Rayburn House Office Building, Hon. Nathan Deal 

(Chairman) presiding. 

 Members present: Representatives Upton, Gillmor, Norwood, 

Cubin, Shimkus, Pickering, Pitts, Ferguson, Rogers, Myrick, Burgess, 

Towns, Pallone, Eshoo, Green, Capps, Dingell (ex officio), and Deal. 

 Staff present: Melissa Bartlett, Counsel; Ryan Long, Counsel; 

Brandon Clark, Policy Coordinator; Chad Grant, Legislative Clerk; 

Bridgett Taylor, Minority Professional Staff Member; Amy Hall, 

Minority Professional Staff Member; and Jessica McNiece, Minority 

Research Assistant. 

 MR. DEAL. We will call the meeting to order and I will recognize 

myself for an opening statement for this hearing. 

 First of all, I am proud to say that we have two very good expert 

panels of witnesses again today. They are going to help us examine the 

concerns that have been raised by MedPAC, CMS, and others regarding 

the rapid growth of the use of imaging services in Medicare. Today’s 

hearing will also provide a forum for witnesses to provide suggestions 

for how to determine what is proper versus improper growth of services 

and how to best control over-utilization or misuse of services. 

 Over the past few years, there has been rapid growth in the volume 

of imaging services paid under Medicare fee-for-service. MedPAC has 

found that Medicare spending for imaging services paid under the 

physician fee schedule nearly doubled between 1999 and 2004, from 

$5.4 billion per year to $10.9 billion per year. In addition, the volume of 

imaging services has grown at almost twice the rate of other physician 

services. Clearly, this level of growth is unsustainable. Some growth in 

use of imaging services is argued to be attributable to technological 

innovations that allow physicians to better diagnose disease. However, 

many observers argue that such growth may reflect overuse or misuse of 
2

imaging services. MedPAC has determined that spending for MRI, CT, 

and nuclear medicine has grown faster than other imaging services. 

Accordingly, MedPAC has identified some factors that may contribute to 

the rapid growth in volume and intensity in imaging services, including 

one, the possible misalignment of fee schedule payment rates and costs, 

two, physician’s interest in supplementing their professional fees with 

revenues from ancillary services, and three, patients’ desire to receive 

diagnostic tests in more convenient settings. 

 In its March 2005 report to Congress, MedPAC recommended that 

Congress direct the Secretary to set standards for physicians interpreting 

or performing diagnostic imaging services. This is a recommendation I 

hope my colleagues on this subcommittee will carefully consider as we 

start to look at possible solutions to this problem. 

 As my colleagues are no doubt aware, the Deficit Reduction Act of 

2005 included a provision that caps reimbursement for the technical 

component of imaging services performed in a physician’s office at the 

hospital outpatient payment rate. Imaging services paid under the 

physician fee schedule involve two parts, a technical component and a 

professional component. The technical component of the payment 

covers the cost of the equipment, supplies, and non-physician staff. The 

DRA provision capping the technical component of physician payment 

for imaging services was intended to move toward payment neutrality 

across sites of service delivery. This provision takes effect January the 

1st of 2007 and will save the Medicare program almost $3 billion over 5 

years. Of course, many physician groups and industry stakeholders are 

pushing for a delay in the effective date of this provision. However, it is 

important to remember that these savings were a major financial 

component in preventing physicians from taking the 4.4 percent 

reduction in fee schedule payments that was scheduled to be 

implemented under the SGR formula for 2006. 

 Unfortunately, few groups are offering legitimate offsets in order to 

pay for this requested delay in implementation. It reminds me of the 

lyrics I believe from an old Bobby Gentry song that says “Everybody 

wants to go to heaven, but nobody wants to die.” 

 I am looking forward to having a cooperative and productive 

conversation on this topic today and to working with my colleagues on 

both sides of the aisle to come up with effective solutions to the 

problems addressed at today’s hearing. Again, I would like to thank our 

witnesses for participating, and we look forward to your testimony. 

 At this time, I would ask unanimous consent that all members be 

allowed to submit statements and questions for the record. Without 

objection. 

 [The prepared statement of Hon. Nathan Deal follows:] 
3

PREPARED STATEMENT OF THE HON. NATHAN DEAL, CHAIRMAN, SUBCOMMITTEE ON 

HEALTH

3⁄4 The Committee will come to order, and the Chair recognizes himself for an opening 

statement. 

3⁄4 I am proud to say that we have two expert panels of witnesses appearing before us 

this morning that will help us examine the concerns raised by MedPAC, CMS, and 

others regarding the rapid growth of the use of imaging services in Medicare. 

3⁄4 Today’s hearing will also provide a forum for witnesses to provide suggestions for 

how to determine what is proper versus improper growth of services, and how to 

best control for overutilization or misuse of services. 

3⁄4 Over the past few years, there has been rapid growth in the volume of imaging 

services paid under Medicare fee-for-service. 

3⁄4 In addition, the volume of imaging services has grown at almost twice the rate of all 

other physician services. 

3⁄4 Clearly, this level of growth is unsustainable. 

3⁄4 Some growth in use of imaging services is argued to be attributable to technological 

innovations that allow physicians to better diagnose disease. However, many 

observers argue that such growth may reflect overuse or misuse of imaging 

services. 

3⁄4 MedPAC has determined that spending for MRI, CT, and nuclear medicine has 

grown faster than for other imaging services. 

3⁄4 Accordingly, MedPAC has identified some factors that may contribute to the rapid 

growth in volume and intensity of imaging services, including: 

1. The possible misalignment of fee schedule payment rates and costs 

2. Physicians’ interest in supplementing their professional fees with revenues 

from ancillary services 

3. Patients’ desire to receive diagnostic tests in more convenient settings. 

3⁄4 In its March 2005 report to Congress, MedPAC recommended that Congress direct 

the Secretary to set standards for physicians interpreting or performing diagnostic 

imaging services. 

3⁄4 This is a recommendation I hope my colleagues on this subcommittee will carefully 

consider as we start to look at possible solutions to this problem. 

3⁄4 As my colleagues are no doubt aware, the Deficit Reduction Act of 2005 (DRA), 

included a provision that caps reimbursement for the technical component for 

imaging services performed in a physician’s office at the hospital outpatient 

payment rate. 

3⁄4 Imaging services paid under the physician fee schedule involve two parts, a 

technical component and a professional component. The technical component of 

the payment covers the cost of the equipment, supplies, and non-physician staff. 

3⁄4 The DRA provision capping the technical component of physician payment for 

imaging services was intended to move toward payment neutrality across sites of 

service delivery. 

3⁄4 This provision takes effect January 1, 2007, and will save the Medicare program 

almost $3 billion over 5 years. 

3⁄4 Of course, many physician groups and industry stakeholders are pushing for a delay 

in the effective date of this provision. 

3⁄4 However, it is important to remember that these savings were a major financial 

component in preventing physicians from taking the 4.4% reduction in fee schedule 

payments that was scheduled to be implemented under the SGR formula for 2006. 

3⁄4 Unfortunately, few groups are offering legitimate offsets in order to pay for this 

requested delay in implementation. 
4

3⁄4 It kinda reminds me of the lyrics of an old Bobbie Gentry song, “Everybody wants 

to go to Heaven...but nobody wants to die.” 

3⁄4 I am looking forward to having a cooperative and productive conversation on this 

topic today and to working with my colleagues on both sides of the aisle to come up 

with effective solutions to the problems addressed at today’s hearing. 

3⁄4 Again, I would like to thank all of our witnesses for participating today, and we 

look forward to hearing your testimony. 

3⁄4 At this time, I would also like to ask for Unanimous Consent that all Members be 

allowed to submit statements and questions for the record. 

3⁄4 I now recognize the Ranking Member of the Subcommittee, Mr. Brown from Ohio, 

for five minutes for his opening statement. 

 MR. DEAL. I now recognize Mr. Pallone, who is standing in for our 

Ranking Member, for 5 minutes for his opening statement. 

 MR. PALLONE. Thank you, Mr. Chairman. 

 Without a doubt, recent advancements in medical imaging, such as 

computerized tomography, magnetic resonance imaging, and ultrasound 

have greatly improved physicians’ ability to diagnose and treat patients. 

These technologies have the potential to improve health outcomes and 

lower healthcare costs by minimizing the need for invasive procedures 

and improve patient safety. 

 Over the past few years, however, we have seen an explosion in the 

use of medical imaging services. According to MedPAC’s March 2005 

report, between 1999 and 2002, the per beneficiary average annual 

growth rate in the use of fee scheduling imaging services was twice as 

high as the growth rates for all fee schedule services. Predictably, this 

type of growth has raised some eyebrows about the appropriate use of 

medical imaging technology. 

 Healthcare experts have identified several sources that are 

responsible for this growth, most of which has been attributed to the 

increased utilization in medical imaging in physician’s offices as 

opposed to hospital outpatient departments where radiologists 

traditionally provided these services. One obvious benefit brought about 

by this change is that patients no longer have to be shuttled from one 

place to another simply to have an imaging study performed. This saves 

the patient both time and money. On the other hand, this change has also 

raised concerns that doctors are inappropriately using medical imaging 

services, whether it is a result of insufficient training or simply to boost 

their reimbursements. As a result, some experts have argued that as 

more and more doctors offer these types of services, Federal standards 

need to be put into place to ensure physicians are appropriately ordering 

imaging studies and patients have access to safe imaging services. 

 Such proposals are not without controversy. As MedPAC noted, and 

I quote, “It would be a major policy change for Medicare to require that 

physicians meet standards to receive payment for interpreting imaging 
5

services.” But clearly, physician groups remain skeptical. That is why I 

think it is important that we are having today’s hearing, so that we can 

flesh out some of these ideas. 

 Unfortunately, Congress has already enacted significant payment 

reforms regarding medical imaging services without any debate. In the 

final hours before Congress passed the Deficit Reduction Act, a 

provision was slipped into the bill that would limit payment for medical 

imaging services provided in physician offices. Neither Congress, nor 

MedPAC, nor any other public forum has held a hearing or meeting on 

this proposal, and because there is no record, we don’t know the impact 

this proposal will have on beneficiaries’ access to medical imaging. 

 So Mr. Chairman, in the future, I would hope that you would call for 

regular order and ensure that this subcommittee and the full committee 

exercises their right to adequately review such policies before they go 

into effect. And while we are on the subject of regular order, I would 

like to just take a minute to highlight the fact that you still have not 

responded to our request, to the Democrats’ request under Rule 9 under 

the Rules of the House to have another hearing held on implementation 

of Medicare Part D. 

 Mr. Chairman, it has been about 5 months since we have made this 

request formally, and we still haven’t heard back. I think we deserve to 

hear from beneficiaries about their experiences with this program. For 

example, I am hearing more and more now about the donut hole as more 

and more people fall into the donut hole, you know, they contact my 

office and complain because they are not really aware of the impact of 

the donut hole. So there are problems, and some beneficiaries aren’t 

getting the medications they need. Others aren’t getting the subsidies 

they are entitled to, and we should be hearing from them. 

 So Mr. Chairman, I just wanted to say in conclusion, I want to thank 

you again for holding today’s hearing. Ensuring the appropriate use of 

medical imaging services is an important topic, but so is the impact of 

Medicare Part D and its effect on beneficiaries. So I once again urge you 

to heed our requests and hold an additional hearing on that program and 

allow Democrats to call their own witnesses. 

 Thank you, Mr. Chairman. 

 MR. DEAL. We look forward to having another hearing on Medicare 

Part D and hear of the huge successes that that program has been, the 

great contributions that it has made to healthcare in this country, and we 

will honor that request. 

 MR. PALLONE. Thank you, Mr. Chairman. 

 MR. DEAL. I recognize Dr. Norwood for his opening statement. 

 MR. NORWOOD. Thank you very much, Mr. Chairman. I am very 

happy that we are exercising our jurisdiction over this issue. It has been 
6

on the radar screen of others for some time, though they have done 

absolutely nothing about finding out the facts. They have just simply 

written some legislation. So I am delighted that our committee is 

beginning to look at this. 

 The New England Journal of Medicine recently identified medical 

imaging as one of the top 11 medical innovations of the past 1,000 years. 

Without hesitation, imaging has improved the health of all of our Nation 

by enhancing preventive and diagnostic medicine. And as imaging 

technology has progressed, local doctors have been able to provide these 

services. Has there been a growth in utilization of diagnostic imaging? 

Well, of course, yes, there has. Should this growth come as a surprise? 

It really shouldn’t to anybody. We have an aging population, spent years 

encouraging preventative medicine. And like the rest of healthcare 

industry, innovation does not produce savings up front. But more than 

the quality of life issues involved, I will guarantee you that imaging 

saves money. 

 That said, in fact, I am a pretty good example of that. That said, is 

there some unnecessary imaging? Well, it only makes sense that there is. 

There is over-utilization in lots of places, frankly. Should we be 

concerned about any dramatic increase in spending? Well, as protectors 

of the taxpayer funds, we have to pay very close attention to that, and 

yes, we should be concerned. However, if we are worried about overutilization, how do we specifically target that without simply cost 

shifting? Can we do that? 

 I know this is a general hearing, but we need to take a step back and 

reevaluate the payment adjustments in the DRA. We can say we don’t 

want Part B to pay more than a hospital for the technical component of 

the same service, but has anyone asked how the payment systems differ? 

No. Or how beneficiary co-pays will be affected? No. Or how hospitals 

can spread costs? No. Hopefully, this committee is going to start asking 

those questions. 

 Wait times in hospital outpatient departments are too long already. 

If patients are left with fewer options, wait times are certainly going to 

increase dramatically. What if hospitals drop cost and drive private 

practices out? What will this do for competition, for patient care, 

especially in rural areas and for the taxpayer? And what at the end of the 

day have we done to address the real issue? Well, very little, I believe. 

 I hope this hearing will get to the heart of what we are trying to 

accomplish and see if what Congress has done matches that goal. 

 I thank Representative Pitts for his leadership, and agree, a 

moratorium on these adjustments is responsible, and until we get to a 

responsible policy, to do otherwise, because we haven’t done our 

homework, is, in my mind, irresponsible. 
7

 Thank you again, Mr. Chairman, for this hearing. It is so very 

important. I look forward to the testimony of our witnesses, and yield 

back my time. 

 MR. DEAL. I thank the gentleman. 

 I now recognize the Ranking Member of the full committee, Mr. 

Dingell, for an opening statement. 

 MR. DINGELL. Mr. Chairman, thank you. Good morning to 

everybody. 

 Mr. Chairman, while addressing the issues about imaging services in 

Medicare is certainly important, my constituents talk to me much more 

about the Part D drug benefit than they do about imaging services. I note 

that the Minority members still have not had the opportunity as is 

afforded us under the Rules of the House to have a hearing on Medicare 

Part D drug benefit with witnesses of our choosing. I note that we have 

made that request. It is a matter of entitlement to us. It has not been 

honored. I am saddened by the inattention to the Rules of the House and 

the rights of the Minority. The Medicare program provides health 

security for more than 40 million beneficiaries today. Getting the 

addition of a new complicated benefit for prescription medicines where 

we have evidence that problems exist and improvements should be made, 

I believe that we must go into this matter with considerably more care, 

and that we must hear from all parties, not just administrative witnesses 

and representatives of the company and companies that are receiving 

financial gains from this program. 

 Today, the committee has chosen to focus on imaging services. That 

is an important question. Some of the problems that will be explored in 

today’s hearing are yet another example of what goes wrong when 

legislation is cobbled together in haste and passed in haste. The Deficit 

Reduction Act, which remains under a legal cloud because of 

irregularities in its passage, made a number of changes to Medicare 

payments for diagnostic imaging services, changes that may have 

overreached in some areas and underreached in others. We know we are 

receiving complaints, but we do not know exactly what we have done or 

how well or poorly we have done it. 

 Payment cuts to meet a budget target are a blunt tool which may 

result in unintended consequences. Some of the witnesses today will 

explain to us how not all imaging services are alike, that changes 

appropriate for one set of services may not be appropriate for another 

type of service. We will also hear about quality standards to protect 

patient health and safety. I believe this is an issue that should be 

carefully explored by the committee. Our utmost concern should be to 

ensure that beneficiaries have access to the best quality of services, and 

we should not do anything which would create a solution which does not 
8

achieve that purpose. That is an important purpose and it is a solution 

that the committee must address carefully. 

 I look forward to the testimony of witnesses here today, and to 

additional hearings on the Medicare program. It is rapidly being put into 

something of a mess. 

 Thank you, Mr. Chairman. 

 MR. DEAL. I thank the gentleman. 

 Mr. Pickering is recognized for an opening statement. 

 MR. PICKERING. Mr. Chairman, I thank you for holding this hearing. 

Please excuse my voice. 

 I want to just take a moment to talk about a bill that I introduced, the 

CARE bill, 129 sponsors, and I think it helps address some of the issues 

that will be raised in this hearing. 

 As we seek to improve the quality of care, reduce costs, and improve 

safety in the use of imaging, I think that the bill can help set the Federal 

standards for the education and the credentialing then implemented by 

the States. I am looking forward to hearing the panel today, and the 

testimony, and to see if the CARE bill and other things that we can do to 

address from the reimbursement side as well as the education side can 

begin making the progressive steps forward on how we should balance 

the great care that comes, the improved care that comes from imaging 

services, but to do it in a responsible way and to do it in the right way. 

 Mr. Chairman, I yield back. Thank you. 

 MR. DEAL. I thank the gentleman, and recognize Ms. Capps for an 

opening statement. 

 MS. CAPPS. Thank you, Mr. Chairman, and thank you for holding 

the hearing today. I look forward to the testimony of our witnesses. I 

am pleased that we have the opportunity to discuss the importance of 

preserving access to imaging services for Medicare beneficiaries, 

because I know there is great bipartisan support for maintaining the 

current system. I want to associate myself with two pieces of legislation, 

H.R. 5238, by my colleague Carol McCarthy from New York, who has 

asked me to ask for unanimous consent to insert a letter that she has 

written. She has written a letter to this subcommittee regarding the 

legislation she has introduced which would repeal the cuts altogether, so 

with permission, I ask for unanimous consent to have this letter inserted 

into today’s proceedings. 

 MR. DEAL. Without objection. 

 [The information follows:] 
9
10

 MS. CAPPS. I also want to acknowledge our colleague, Mr. Pitts, bill 

H.R. 5704, which I am sure will be part of our discussion today. 

 Along with my colleagues, I am deeply disturbed by the cuts to 

Medicare reimbursement for outpatient diagnostic imaging services, as I 

said, that were included in the Deficit Reduction Act. It is one of the 

very many reasons I voted against the bill, and I want to associate myself 

with the remarks of the Ranking Member of this full committee on many 

of the aspects of Medicare services that need to be addressed by this 

committee. 

 I am especially appalled that these cuts, upward of 30 to 50 percent, 

were enacted arbitrarily with little discussion, without any consideration 

for the effects of these cuts on patients, on real people. Logically, the 

reduction of reimbursements for outpatient imaging services will mean a 

reduction in the number of physicians who are going to be able to 

provide these services. This will mean Medicare beneficiaries traveling 

further to find providers who offer diagnostic imaging. It may leave 

beneficiaries themselves with no option but to obtain these services at 

hospitals where waits are longer and costs are often much higher. The 

logistical problems and higher costs may even result in patients opting 
11

out of diagnostic imaging services altogether, and those people who are 

practitioners out in the field, out in the communities, know that this is a 

very real threat. There will be a lessening of the quality of healthcare we 

will be providing to America. Diagnostic imaging includes 

mammograms, ultrasounds, bone density screenings, MRIs, which are 

key to early detection of serious, fatal diseases. We are in an age where 

we know that early detection equals early treatment, which saves lives. 

Of course, it also saves money and great cost to our society, to families. 

 If we allow these cuts to go through, access to imaging services will 

be reduced, while wait times will be increased. The architects of these 

cuts did so in the name of cost saving. Well, you can be sure that the 

cost, as I mentioned, of treating a patient for advanced breast cancer 

certainly is going to be higher than the cost of a mammogram and early 

intervention. I am sure we are going to hear today even more about the 

innovation in diagnostic imaging, and I am sure that we will jointly 

praise the accomplishments of new technologies and techniques that 

allow us to detect disease early on, but let us not just sit here and listen. 

Let us discuss. This is our responsibility, the ways in which we can save 

access to these services and save lives. 

 I yield back. 

 MR. DEAL. I thank the gentlelady. 

 Mr. Pitts is recognized for an opening statement. 

 MR. PITTS. Thank you, Mr. Chairman. Thank you for convening 

this hearing today on such an important issue. 

 Mr. Chairman, I know the focus of this hearing is not just on the 

diagnostic imaging cuts included in Section 5102 of the Deficit 

Reduction Act, the DRA. We are also addressing the issue of overutilization of imaging services, and its rapid growth in the last few years. 

 Regarding over-utilization, I am troubled by MedPAC’s March 2005 

report on the skyrocketing use of imaging services, and its conclusion 

that increased use of these services is not linked to better health 

outcomes for patients. I am also interested in CMS’s and MedPAC’s 

recommendations on quality standards for imaging equipment and 

radiology technicians, image quality, patient safety, and interpreting 

physicians. 

 However, I would also like to discuss the impact of these cuts. 

Section 5102 of the DRA will result in drastic cuts in reimbursement, 

upwards of 30 to 50 percent for the technical component of critical 

imaging services provided in physician’s offices and independent 

imaging centers. No analysis has been conducted regarding the impact 

that this change in policy will have on Medicare beneficiaries’ access to 

imaging services in a setting that allows for more timely diagnosis and 

treatment. 
12

 Barring any statutory change, these cuts will go into effect on 

January 1 of next year, and that is why I have introduced a common 

sense, fiscally responsible bill, H.R. 5704, the Access to Medicare 

Imaging Act of 2006, which would simply delay implementation of these 

cuts by 2 years, to January 1, 2009. This delay will give the GAO time 

to conduct a study, required by the legislation, on the impact these cuts 

would have on patient access and service issues, with special attention to 

rural and medically underserved areas. H.R. 5704 enjoys bipartisan 

support from over 55 cosponsors, including 12 members of this 

subcommittee--six Republicans and six Democrats. Additionally, my 

bill is supported by the Access to Medical Imaging Coalition, which 

represents more than 75,000 physicians and providers and patients, as 

well as medical imaging manufacturers who employ tens of thousands of 

workers. In fact, several of today’s witnesses, Dr. Donald Rucker, 

testifying on behalf of the National Electrical Manufacturers Association, 

Dr. Arl Van Moore from the American College of Radiology, and Mr. 

Robert Baumgartner, testifying on behalf of the National Coalition of 

Quality Diagnostic Imaging Services, represent organizations which are 

a part of this coalition. 

 Mr. Chairman, I look forward to hearing from our distinguished 

witnesses and learning their views and recommendations on these 

important issues. I would like to extend a special welcome to Donald 

Rucker from Siemens Medical Solutions, USA, and a resident of my 

home State of Pennsylvania. 

 I yield back the balance of my time. 

 MR. DEAL. I thank the gentleman. 

 Mr. Green is recognized for an opening statement. 

 MR. GREEN. Thank you, Mr. Chairman, for holding the hearing on 

imaging services on Medicare. I would like to welcome our first panel 

today, and the following panel. 

 There is no question the volume of imaging services increased 

dramatically over the last couple of years. In fact, from 1999 to 2003, 

imaging volume grew twice as fast as other physician services. The 

potential explanations for this growth are numerous: quality of imaging 

technology improving so it is being utilized more; more physicians 

investing in imaging technology so they can diagnose diseases right in 

their offices; and there is a growing trend among physicians investing in 

freestanding imaging facilities which can lead to increased referrals. 

 While there are a number of plausible explanations, they are 

accompanied by even more questions. Are the imaging services being 

delivered in the most efficient manner? Are the payment rates 

appropriate? Are patients better off, that is, is the volume growth in 
13

imaging services leading to quicker detection and treatment of disease? 

Does increased utilization necessarily mean over-utilization? 

 Despite all these questions, conferees and the Deficit Reduction Act 

rush to include payment cuts for imaging services without the benefit of 

stakeholder input or an in-depth analysis of the issue. In fact, the 

provision wasn’t even in the House or the Senate versions. It was a last 

minute inclusion in the conference report. That is why I am a cosponsor 

of Congressman Pitts’ H.R. 5704 to delay these cuts for 2 years so we 

will have time to analyze its impact. This policy, which is set to go into 

effect in January of 2007, will have tremendous impact on physicians 

offering imaging services. Those utilizing ultrasound for guidance 

procedures will see their reimbursement rates fall by approximately 35 

percent. Reimbursements for PET or CT scans used to diagnose cancer 

would be reduced by 50 percent. Can we estimate the effect of this 

policy on the physician, but what impact will it have on the Medicare 

beneficiaries, the very folks who depend on this technology for their 

healthcare? I know personally, Mr. Chairman, that a lot of physicians 

use imaging particularly in our effort on aortic aneurysms to screen for 

those. If this policy leads physicians to term if they one, cannot afford to 

offer these services or two, can’t afford to accept Medicare beneficiaries, 

we find ourselves with an access problem. Our office hears from 

Medicare beneficiaries who already find it difficult to make it to the 

doctor for their appointment. What effect would this policy have on 

them if they are forced to schedule multiple appointments for imaging? 

 We also need to look more closely at the quality of imaging services 

and how the proliferation of non-radiologist imaging is affecting quality, 

if at all. There hasn’t been enough analysis of these issues and I am 

concerned that the Deficit Reduction Act may be cutting the meat and 

not just the fluff. 

 To look deeper into the issue, I, like I said, joined my colleagues on 

this subcommittee in cosponsoring Mr. Pitts’s legislation. I would also 

like to see more analysis of the appropriateness of any imaging 

utilization. I look forward to hearing from our witnesses in the amounts 

of charges of over-utilization. 

 I yield back my time. 

 MR. DEAL. I thank the gentleman. 

 Dr. Burgess is recognized for an opening statement. 

 MR. BURGESS. Thank you, Mr. Chairman. I also want to thank you 

for holding this hearing today. 

 Medical imaging is, of course, extremely important technology. It is 

entering into its second century of existence. We have seen 

embellishments of old technology and we see new technology emerging 

almost daily in the challenges to adequately reimburse for both. 
14

 In my practice, the use of ultrasound was pretty much a standard 

practice of medicine in OB/GYN. OB/GYN practices are kind of 

unique, and ultrasound is ubiquitous to our ability to deliver care to our 

patients. In fact, probably 90 percent of OB/GYN practices across the 

country possess their own in-office ultrasound machines. It is analogous 

to the use of a stethoscope in clinical practice. 

 New modalities allow doctors to identify and diagnose disease in a 

manner that was unthought of even as much as 2 years ago. I hope this 

hearing today will help us understand where medical imaging technology 

is assistive and where there may be opportunities to gain efficiency and 

subsequent savings in the Medicare program. 

 I am pleased that we have today with us Dr. Douglas Laube, the 

President of the American College of OB/GYN. I have been a fellow of 

the College for nearly 25 years, and know very well the fine work of this 

specialty organization. Dr. Laube chairs the Department of OB/GYN at 

the University of Wisconsin Medical School in Madison, and he also 

holds a medical education degree from the University of Iowa. He has 

been teaching and training OB/GYNs since the mid-‘70s. He has chaired 

the Council on Residency Education for OB/GYNs, as well as the 

National Board of Medical Examiners. 

 I am also pleased to welcome from Dallas, Dr. Landis K. Griffeth, 

M.D., Ph.D., who is the Director of Nuclear Medicine at Baylor 

University Medical Center in Dallas. He is also the National Medical 

Director for Positron Emission Tomography at U.S. Oncology. 

 Mr. Chairman, I also just want to take one moment, and other 

Members have talked about issues with the coverage gap in the Medicare 

prescription drug program. I would point out, in my home State of 

Texas, there are five companies that offer generic medicine coverage in 

the gap. There is one company that offers both generic and branded 

medicines in the gap. I think it is a shame that other members didn’t take 

the time to educate their constituents about these very valuable programs. 

They are not necessary for every senior on Medicare, but certainly, they 

are valuable and assistive to many patients who take a variety of 

medications to meet their healthcare needs. 

 With that, Mr. Chairman, I will yield back. 

 MR. DEAL. I thank the gentleman. 

 Ms. Myrick is recognized for an opening statement. 

 MS. MYRICK. Thank you, Mr. Chairman. I look forward to the 

discussions all the rest today, and welcome all of our panelists, but I 

especially wanted to recognize Dr. Arl Van Moore, who is a friend and a 

constituent from Charlotte, North Carolina. Dr. Van Moore has over 20 

years experience as a radiologist, and he can share not only his expertise, 
15

but his real world experience in dealing with the payment system in 

Medicare. We are glad you are here today. 

 We haven’t really gotten our arms around the growth in the imaging 

services in Medicare, and a lot of stakeholders don’t think that the 

technical cap in the DRA was the most effective way to do so. Particular 

specialties may be affected more than others, and it is not clear that the 

hospital outpatient codes are always accurate when it comes to reflecting 

actual cost. 

 With that said, we need to recognize the scope of the problem. It is 

not a bad thing that Medicare beneficiaries are using more MRIs, CT 

scans, et cetera. Imaging can detect disease and save lives, and many of 

us know firsthand. I am a breast cancer survivor, and I had three 

mammograms and five doctors examined me, and they all told me I was 

fine. It wasn’t until I had an ultrasound that they found my tumor, which 

saved my life. I am very thankful for that. Nevertheless, doctors have a 

responsibility to use these technologies appropriately, and we have a 

responsibility to the taxpayers to make sure that the Medicare payment 

structure makes sense. 

 So I hope this hearing is going to give us some direction going 

forward, and I want to say thanks again to both panels. 

 Mr. Chairman, I yield back my time. 

 MR. DEAL. I thank the gentlelady. 

 Mr. Ferguson is recognized for an opening statement. 

 MR. FERGUSON. Thank you, Mr. Chairman. Thank you for 

convening this very important hearing concerning an issue that is 

important to physicians and also to patients who benefit from imaging 

services. 

 There is no doubt that there have been tremendous advances in 

imaging over the last decade, but along with those advances have come 

increases in utilization of services and subsequently, costs to Medicare 

and the healthcare system. The payment policy included in the DRA for 

medical imaging procedures has raised a lot of concern from 

stakeholders, and I believe for good reason. As I understand it, the 

policy says that with regard to the technical component, more cannot be 

paid under the Medicare physician fee schedule for a medical imaging 

procedure done in a physician’s office than what is paid if that procedure 

were done in the hospital outpatient setting. This policy appears to make 

the assumption that the hospital outpatient perspective payment system 

more accurately reflects the true cost of a medical imaging procedure. If 

this is the case, then I am puzzled as to why in those cases where the 

hospital outpatient payment is higher than what is paid in a physician 

office for the same medical imaging procedure that this policy does not 

increase the payment in the physician office setting. This strikes me as a 
16

case where the OPPS is only more accurate when it pays less than a 

Medicare physician fee schedule, but not accurate when it pays more. 

This reminds me of the old saying “Tails, I win, heads, you lose.” 

 I hope that the witnesses from CMS and MedPAC today will shed 

light on what I see as a troubling aspect of the policy included in the 

DRA. It is vital that we spend the time to get this right and that is what 

this hearing is about. 

 I look forward to hearing from our panelists today, and to hear their 

proposals and ideas on how to control and manage utilization of imaging 

services properly. These are important issues to discuss, but I believe 

they must be discussed under the context of what was done in the Deficit 

Reduction Act. Above all, I look forward to working with you, Mr. 

Chairman, to craft a policy that can more accurately reflect proper 

payment for these services without encouraging over-utilization. 

 Thank you very much, Mr. Chairman. I yield back. 

 MR. DEAL. I thank the gentleman. 

 [Additional statements submitted for the record follow:] 

PREPARED STATEMENT OF THE HON. JOE BARTON, CHAIRMAN, COMMITTEE ON ENERGY 

AND COMMERCE

Good morning. I would like to welcome all of our witnesses here today. I look 

forward to hearing your perspectives on a troubling trend in Medicare: the year-in and 

year-out growth in spending for imaging services ordered by doctors. 

Physician spending for imaging services has more than doubled in the past five 

years, accounting for a significant portion of total increased physician spending each 

year. Why is this so? What accounts for this rapid growth? These are questions that are 

front and center for today’s hearing. 

The current rate of Medicare spending on Part B services is simply not sustainable. 

Overall, Part B spending increased by 11 percent in 2005, while expenditures for 

physicians’ services alone grew by 10 percent. According to CMS, such rapid growth is 

driven by more use of more intensive physicians’ services, including imaging services, 

among others. In addition, CMS has found that use of many of these services varies 

substantially across practices and geographic areas without any clear associated impact 

on patient health. 

More importantly, overuse or misuse of physician services has a direct impact on the 

health and well-being of the patient. Such use also has a direct impact on the costs of 

Medicare Part B services, reflected by the copayments beneficiaries must pay for services 

that may not be necessary or inappropriate. Rapid growth in utilization of services 

spending on Part B services also causes the Part B premium to rise each year. It is simply 

not fair for our seniors to shoulder the costs of improper growth in physician spending. 

We need to better understand what drives the growth. Is it medically beneficial or 

misuse of technology, or both? I understand that some growth may be attributed to 

technological innovations that allow physicians to better diagnose disease. To this extent, 

I applaud physicians for seeking out the best, most effective care available for our 

seniors. However, it is also my understanding that the rapid growth in volume and 

intensity of imaging services may be driven by the possible misalignment between fee 

schedule payment rates and actual costs. If that is true, how do we control for this? We 

must also examine the effect of defensive medicine on the increased use of these services. 
17

These are some of the questions I have for our witnesses today as we begin to look 

at one area of physician spending that continues to grow unsustainably each year. As we 

look ahead to how to best address problems with the underlying physician payment 

system, one important consideration is how to best control for overutilization of services 

that are not necessary or possibly harmful to patients. The SGR was designed to control 

for such overuse of services, but it appears it has not done the trick. As we look at 

building a new physician payment system, questions about how to control physician 

spending must be addressed. Today’s hearing is an important first step at looking at this 

issue. 

I want to thank Chairman Deal for calling this hearing, and reiterate my thanks to all 

the witnesses for coming today. I look forward to their testimony. 

PREPARED STATEMENT OF THE HON. ANNA ESHOO, A REPRESENTATIVE IN CONGRESS FROM 

THE STATE OF CALIFORNIA

Thank you, Mr. Chairman. 

Medical imaging has transformed the way modern medical care is delivered. The 

successes of medical imaging technologies are due in part to the research conducted by 

the National Institute of Biomedical Imaging and Bioengineering at NIH. This Institute 

was established in 2000 by the National Institute of Biomedical Imaging and 

Bioengineering Establishment Act, which then-Representative Richard Burr and I 

sponsored.

The benefits and promise of medical imaging are immense. Imaging technologies 

can often detect critical illnesses at their most curable stage when they are also less costly 

to treat. Less-invasive care, fewer complications, shorter hospital stays, and better patient 

management have also fostered greater efficiency and savings throughout the healthcare 

delivery system. 

Medical imaging is an essential tool of modern medicine. Physicians rate CT and 

MRI as the most important medical innovations in providing quality care for their 

patients. 

In the case of aging populations, imaging is particularly useful in preventing patients 

from undergoing invasive surgeries, avoiding extended periods of recuperation or 

disability. 

I’m eager to hear the testimony of our expert witnesses today who will explain the 

new and emerging imaging technologies that will help revolutionize the way health care 

is delivered. 

The Deficit Reduction Act (DRA) included severe cuts in payments for medical 

imaging in the Medicare physician fee schedule. These cuts were not included in either 

the House or Senate-passed versions of the DRA bill, but were added to the Conference 

report at the last-minute in order to increase revenue. 

Today, imaging comprises roughly one-tenth of Medicare spending, yet the cuts to 

imaging in the DRA comprise roughly one-third of the total Medicare savings in the bill, 

a highly disproportionate and unfair slice of the pie. Specific categories of imaging 

services fare no better: 

• Reimbursement for ultrasound guidance procedures, performed as part of a 

minimally invasive biopsy for the diagnosis of breast cancer, would be reduced 

by 30%. 

• Reimbursement for PET/CT exams used to diagnose cancerous tumors and 

determine the effectiveness of cancer treatment would be reduced by upwards 

of 50 percent. 

• Reimbursement for bone densitometry studies necessary for the diagnosis of 

women at risk for osteoporosis, a recently enacted Medicare screening benefit, 

would be reduced by over 40%. 
18

• Reimbursement for MRIs of the head used to detect the location of aneurysms 

would be reduced by 42%. 

Because of the increased risk of disease and illness in aging populations, these cuts 

will affect the ability of Medicare beneficiaries to receive potentially life-saving imaging 

procedures and diminish the quality of care patients receive. 

The devastating effects these cuts will have are unfounded and unacceptable. That’s 

why I urge my colleagues to join me in supporting H.R. 5704, the Access to Medicare 

Imaging Act of 2006. This bipartisan bill places a 2-year budget-neutral moratorium on 

the cuts while GAO does a study on the impact of these provisions. 

Thank you, Mr. Chairman, I look forward to hearing from the witnesses. 

 MR. DEAL. I believe all the opening statements have now been 

concluded. It is my pleasure to introduce our first panel. First of all, Mr. 

Herb Kuhn, who is the Director of the Center for Medicare Management, 

that’s CMS. Mr. Glenn Hackbarth, who is the Chairman of the Medicare 

Payment Advisory Commission. Gentlemen, we are pleased to have 

both of you here. Your written testimony has been made a part of the 

record. We would ask you to use your 5 minutes to summarize that 

testimony for us today. 

 Mr. Kuhn, we will start with you. 

STATEMENTS OF HERB KUHN, DIRECTOR, CENTER FOR 

MEDICARE MANAGEMENT, CENTERS FOR MEDICARE 

AND MEDICAID SERVICES, U.S. DEPARTMENT OF 

HEALTH AND HUMAN SERVICES; AND GLENN M. 

HACKBARTH, J.D., CHAIRMAN, MEDICARE PAYMENT 

ADVISORY COMMISSION 

MR. KUHN. Chairman Deal, Representative Pallone-- 

 MR. DEAL. Turn your microphone on, please. 

 MR. KUHN. Thank you. 

 Chairman Deal, Representative Pallone, members of the 

subcommittee, thank you for the opportunity to discuss with you some of 

the changes in payment for imaging services under the Medicare 

physician fees schedule. Spending for these services has risen 

dramatically in the past several years, prompting a number of 

recommendations by MedPAC, many of which we have implemented, 

and of course, the subsequent actions we have heard about today by 

Congress to address the increased spending associated with the rise in 

both the volume and intensity of these services. We want to ensure that 

Medicare’s payment mechanisms encourage clinically appropriate use of 

resources and the highest quality of care, and we welcome input from 

this subcommittee, the physician community, and others interested in this 

issue. 
19

 Medicare’s spending for imaging services has grown rapidly. As we 

have heard, it is nearly doubled over the last 5 or 6 years. New 

information from CMS shows that between 2000 and 2005, spending for 

imaging services paid under the physician fee schedule doubled from 

$6.6 billion to $13.7 billion, an average annual rate growth of 15.7 

percent. This compares to the overall annual growth in physician 

services of 9.6 percent. We also see more extensive geographic variation 

in spending for imaging services than for other physician services. 

MedPAC has also found similar findings in terms of variation. This 

significant variation in use of imaging services, even among contiguous 

States, appears to be with no evidence towards better outcomes for the 

patients, as we see right now. The rapid increase in Medicare spending 

for imaging services, coupled with extensive geographic variation in 

their use, raises question about whether such growth is appropriate and 

whether all imaging services are used appropriately as well. 

 Currently, we estimate that spending for physicians grew by 10 

percent during 2005. Seven percentage points of this growth is 

attributable to the volume and intensity of physician services, a rate that 

is in line with the past few years. In March, we estimated that the 

increase in spending for imaging accounted for 27 percent of the increase 

in physician-related spending. This level of growth is adding additional 

pressure to the sustainable growth rate system. 

 As noted in last week’s mid-session review of the budget, growth 

and spending for physician services is a notable contributor to the 

increase in the Part B premium, which is now projected to be $98.40 in 

2007, an increase of almost $10 from the 2006 Part B premium. Rapid 

increases in spending for imaging services contributes significantly to the 

increase in spending for physician services, and thus help also fuel the 

Part B premium. 

 To address this situation, CMS, as I indicated earlier, has taken 

several steps. First, in response to a MedPAC recommendation, we 

added nuclear medicine services to the list of services for which a 

physician is prevented from making a self-referral under Medicare and 

Medicaid under the STARK law. 

 Second, in the physician fee schedule rule in 2006, we indicated that 

we would look at multiple imaging procedures, and we looked at 11 

families of related codes that are performed on contiguous body parts. 

Basically what we did was make a particular proposal and a 

recommendation that we would reduce the subsequent procedure by 50 

percent, 25 percent this year and an additional 25 percent next year. 

Under requirements for budget neutrality, we took the step of increasing 

payments for all 2006 physician fee schedule services in order to balance 

out those reductions. 
20

 The Deficit Reduction Act of 2005 contains two major provisions, as 

we have heard about today. The first one is on the contiguous body part 

recommendation that we made on last year’s rule, dealing with the 

technical component of that one. Instead of being budget neutral, there 

are savings associated with that and we will take those savings as part of 

the DRA. The second, of course, as we have heard is the provision 

dealing with the OPPS cap, and therefore reducing physician imaging 

services in physician offices to the level that is in the OPPS payment 

rate. Basically a side neutral payment system is what was envisioned in 

that particular legislation. 

 We realize that significant technology advances in imaging 

capabilities have made a difference in clinical practice and the lives of 

patients. I think this committee has well-articulated that in their 

openings statements. However, we want to ensure that our payment 

system rewards clinically appropriate care and does not provide 

inappropriate incentives for growth in volume and intensity of services 

with limited clinical benefit. To that end, CMS will continue to work 

with the physician community, other interested parties, and of course, 

this subcommittee and others in Congress as we refine our payment 

systems for medical imaging. 

 I thank the subcommittee for this time, and I look forward to your 

questions. 

 [The prepared statement of Herb Kuhn follows:] 

PREPARED STATEMENT OF HERB KUHN, DIRECTOR, CENTER FOR MEDICARE MANAGEMENT,

CENTERS FOR MEDICARE & MEDICAID SERVICES, U.S. DEPARTMENT OF HEALTH AND 

HUMAN SERVICES

Chairman Deal, Representative Brown, distinguished members of the 

Subcommittee; I thank you for the opportunity to discuss with you some of the changes 

in payment for imaging services under the Medicare physician fee schedule. Spending 

for these services has risen dramatically in the past several years, prompting a number of 

recommendations by the Medicare Payment Advisory Committee (MedPAC), some 

proposals by CMS, and subsequent actions by the Congress to address the increased 

spending associated with the rise in the volume and intensity of these services. We want 

to insure that Medicare’s payment mechanisms encourage clinically appropriate use of 

resources and the highest quality of care, and we welcome input from you, the physician 

community, and other interested parties as we do so. 

Background 

Medicare spending for imaging services has been growing rapidly. Between 2000 

and 2005, spending for imaging services paid under the physician fee schedule more than 

doubled from $6.6 billion to $13.7 billion, an average annual growth rate of 15.7 percent. 

This compares to an annual growth rate of 9.6 percent for all physician fee schedule 

services. 

As we noted in a letter to MedPAC on April 7, 2006 (see table 1), while imaging 

services represented an estimated 14 percent of 2005 spending included in the sustainable 

growth rate calculation (SGR-related spending), they represented 27 percent of the total 
21

increase in such spending between 2004 and 2005. Spending for imaging services 

contributed 2.3 percentage points of the 8.5 percent increase in SGR-related spending 

reported in our April 7th letter to MedPAC. No other service category affects the increase 

in SGR-related spending so disproportionately. 

Table 2 shows growth rates for imaging services for calendar years 2003, 2004 and 

2005, overall and for four subcategories of imaging services: standard imaging, advanced 

imaging, echography, and imaging procedures. Overall, spending for imaging services 

grew at 16 percent per year for each of these years. 

The “standard imaging” category includes services such as chest x-rays, contrast 

gastrointestinal imaging, nuclear medicine procedures, and PET scans. Spending for 

standard imaging procedures increased by an estimated eight percent during 2005 and by 

43 percent from 2003 to 2005. This category represents an estimated five percentage 

points of the 14 percent share that imaging represents of 2005 SGR-related spending. 

This category contributes an estimated 0.4 percentage points to the 2.3 percent increase in 

imaging spending and to the 8.5 percent increase in SGR-related spending. 

Spending for the “advanced imaging” category, comprised largely of CAT scans and 

MRI procedures grew by 25 percent during 2005 and 82 percent from 2003 to 2005. 

This category represents an estimated five percentage points of the 14 percent share that 

imaging represents of 2005 SGR-related spending. This category contributes an 

estimated 1.3 percentage points to the 2.3 percent increase in imaging spending and to the 

8.5 percent increase in SGR-related spending. 

The “imaging procedures” category includes services such as cardiac 

catheterization, fluoroscopy, and 3-D holographic reconstruction. Estimated spending for 

the imaging procedures category of services increased by 20 percent during 2005 and 47 

percent from 2003 to 2005. This category represents an estimated one percentage point 

of the 14 percent share that imaging represents of 2005 SGR-related spending. This 

category contributes an estimated 0.1 percentage points to the 2.3 percent increase in 

imaging spending and to the 8.5 percent increase in SGR-related spending. 

Estimated expenditures for the “echography” category of services increased by 17 

percent during 2005 and grew 49 percent from 2003 to 2005. This category represents an 

estimated three percentage points of the 14 percent share that imaging represents of 2005 

SGR-related spending. This category contributes an estimated 0.6 percentage points to 

the 2.3 percent increase in imaging spending and to the 8.5 percent increase in SGRrelated spending. 

No matter how one looks at it, Medicare spending for imaging services under the 

physician fee schedule is growing very rapidly and more rapidly than spending for other 

services tracked under the SGR system. While MedPAC suggested that some imaging 

services have shifted from being furnished in facilities, such as hospitals, to physicians’ 

offices, MedPAC also observed that about 80 percent of the growth in the volume and 

intensity of these services is unrelated to a shift in setting. The rapid increase in 

Medicare spending for imaging services, coupled with extensive geographic variation in 

their use, raises questions about whether such growth is appropriate and whether all 

imaging services are used appropriately. 

Last week the Administration released the Mid-Session Review of the Budget. Part 

B spending was up from prior estimates. Spending for physicians’ services is estimated 

to have increased by 10 percent during 2005, and 7 percentage points of this growth was 

attributable to the volume and intensity of physicians’ services. The volume and intensity 

of physicians’ services has increased at rates of 6 to 7 percent per year for the past few 

years. Growth in spending for physicians’ services has been a notable contributor to the 

increases in the Part B premium. Rapid increases in spending for imaging services 

contribute significantly to the increase in spending for physicians’ services. 
22

MedPAC Recommendations and the 2006 Medicare Physician Fee Schedule 

Limiting Physician Self-Referrals

Section 1877 of the Social Security Act, known as the “Stark Law,” prohibits a 

physician from making a referral for certain designated health services, payable by 

Medicare or Medicaid, to an entity with which the physician or one of his/her close 

family members has a financial relationship, unless one of a specific list of exceptions 

applies. Among other things, the statute defines designated health services to include 

“radiology services, including magnetic resonance imaging, computerized axial 

tomography and ultrasound services” and “radiation therapy services and supplies”. 

In its March 2005 report to Congress, MedPAC recommended inclusion of nuclear 

medicine services in a list of services for which a physician is prevented from making a 

self-referral under Medicare and Medicaid. 

In the notice of proposed rulemaking (NPRM) for the 2006 physician fee schedule, 

we pursued this MedPAC recommendation and proposed including diagnostic and 

therapeutic nuclear medicine procedures under the designated health services categories 

for radiology and certain other imaging services, and radiation therapy services and 

supplies, respectively. After considering comments on this proposal, we finalized this 

policy in the 2006 physician fee schedule final rule. To provide time for the industry to 

adjust, we deferred the effective date of this policy until January 1, 2007. 

Despite this change, most physicians in groups that own imaging equipment will be 

able to continue to make self-referrals for imaging services within their own group by 

qualifying for one of the broader exceptions to the law -- the “in-office ancillary services” 

exception. Thus, defining a given service as a designated health service and making it 

subject to the prohibition against self-referrals does not mean that it will no longer be 

delivered pursuant to a self-referral in all cases. This change in policy will therefore be 

only partially effective in addressing growth in the volume and intensity of that particular 

type of imaging services. 

Taking Efficiencies into Account

In general, payment amounts under the Medicare physician fee schedule are 

calculated using the assumption that each service is furnished independently. Prior to 

2006, fee schedule payments for imaging did not take into account efficiencies that occur 

when multiple services are furnished sequentially. For example, the fee schedule 

amounts for CT scans of the pelvis and abdomen are established as if each imaging 

service were the only one being furnished to a beneficiary during a given encounter. The 

March 2005 MedPAC report recommended reducing the technical component of fee 

schedule payments for multiple imaging services performed on contiguous body areas. 

The technical component of an imaging service captures the administration of the test; it 

does not include the professional interpretation of the test. 

In the NPRM for the 2006 physician fee schedule, we proposed revising payment 

amounts for the technical component of certain imaging services in order to more 

accurately reflect the economies of subsequent procedures when multiple imaging 

services are furnished within one of 11 families of imaging procedures on contiguous 

body parts in the same session with the patient. Specifically, we proposed establishing 

payment amounts at 50 percent of the technical component of any subsequent imaging 

procedures performed on a single patient during a single session if the initial and 

subsequent services were performed on contiguous body parts within one of 11 families 

of imaging procedure codes. The 50 percent figure was based on our view that most of 

the clinical labor and supplies are not furnished twice. In response to comments on the 

proposal, we indicated in the final rule for the 2006 physician fee schedule that we 

planned to phase in the 50 percent reduction over two years, beginning with a 25 percent 

reduction in 2006. However, we indicated that we would continue to accept comments 

and any supporting information from the public, and consider whether it would be 
23

appropriate to modify the 50 percent payment reduction policy scheduled to take effect 

for 2007. 

The statute requires that we make physician fee schedule changes, such as the 

multiple imaging policy, in a budget-neutral fashion relative to overall physician fee 

schedule expenditures. If changes result in increased spending compared to spending that 

would occur without them, then a reduction in payments is needed to achieve budgetneutrality. Similarly, if changes result in decreased spending compared to spending that 

would occur without them, an increase in payments for all services is needed to achieve 

budget-neutrality. Since the multiple procedure policy resulted in a decrease in spending, 

we increased payments for all 2006 physician fee schedule services in order to achieve 

budget-neutrality. 

Assumptions Used in Setting Fee Schedule Payments for Imaging 

The methodology for determining practice expense relative values for services that 

involve equipment such as that used in furnishing imaging services involves assumptions 

about how frequently the equipment is used. In its September 30, 2005, comments on the 

NPRM for the 2006 physician fee schedule, MedPAC raised concerns about the 

equipment utilization assumption for imaging services. 

CMS’s method of calculating payments for the technical component of imaging 

services assumes that imaging equipment is used only 50 percent of the time. MedPAC 

suggested that imaging equipment could be assumed to be used more than 50 percent of 

the time, given the rapid growth in imaging services. In its June 2006 report to Congress, 

MedPAC continued its analysis of the equipment utilization assumption for imaging 

services and indicated: “If a machine is actually used most of the time, its cost is spread 

across more units of service, resulting in a lower cost per service than if it were operated 

half the time. Such equipment is currently overvalued by CMS”. In its June 2006 report 

to Congress, MedPAC also raised questions about the estimates of the cost of capital to 

purchase equipment such as imaging equipment. 

MedPAC argues that the upshot of CMS’s equipment utilization and capital cost 

assumptions is that Medicare payments for imaging services are too high. The June 2006 

MedPAC report indicates, “increasing the equipment use assumption and lowering the 

interest rate assumption would reduce PE payment rates for services like CT and MRI 

studies.” The report contains a table with examples of alternative assumptions; payments 

for imaging services could be reduced by 40 to 50 percent with alternative assumptions. 

However, data to substantiate alternative equipment utilization assumptions are not 

available. 

The Deficit Reduction Act of 2005 

The Deficit Reduction Act of 2005 contains two major provisions that directly affect 

Medicare payments for imaging services. 

 

Eliminating Budget-Neutrality for the Multiple Imaging Policy

Subsequent to the publication of the final rule for the 2006 Medicare physician fee 

schedule, section 5102(a) the Deficit Reduction Act (DRA) of 2005 exempted the 

multiple imaging savings from budget-neutrality. In other words, the DRA requires that, 

for the 2007 physician fee schedule, we do not offset the savings attributable to the 

multiple imaging payment reduction policy for 2006 and 2007 by increasing payments 

for other physician fee schedule services in 2007. 

The Hospital Outpatient Department Cap on Physician Fee Schedule Imaging Payments

DRA establishes caps on physician fee schedule payments for certain imaging 

services at the payment levels established in Medicare’s hospital outpatient prospective 

payment system (OPPS). The provision requires that Medicare not pay more under the 
24

physician fee schedule than Medicare would pay under the OPPS for furnishing the same 

imaging procedure. This policy applies to the technical components of imaging services 

including X-ray, ultrasound, nuclear medicine, MRI, CT, and fluoroscopy services. A 

physician’s interpretation of the test for which Medicare will pay a separate fee is not 

affected by the provision. Screening and diagnostic mammograms are exempt from this 

policy change. This policy will begin in 2007. 

An example of how this policy works can be seen in the case of an MRI of the brain 

or an MRI of the abdomen. In 2006, the Medicare physician fee schedule payment is 

$903 for the technical component of either of these MRIs. At the same time, Medicare 

pays hospital outpatient departments $506 for the exact same test. Thus, Medicare is 

paying almost $400 or 78 percent more for doing these MRI imaging tests purely 

depending on whether the test is performed in a hospital outpatient department or in a 

physician’s office (or other setting paid under the physician fee schedule). These 

comparisons do not include a physician’s interpretation of the test for which Medicare 

will pay a separate fee. 

Among imaging procedures, there is little consistency in the percentage by which 

payments for the technical component under the physician fee schedule exceed payments 

under the OPPS. The percentage difference varies by procedure. We are still working on 

the proposed rules for 2007 for both OPPS and the physician fee schedule. The fee 

schedule NPRM will contain the specific impacts of the DRA imaging provision. 

Conclusion 

Medicare spending for imaging services has experienced very rapid growth. In 

addition, through 2006, Medicare is often paying significantly larger amounts under the 

physician fee schedule than the OPPS for the same imaging service furnished in the two 

different settings. MedPAC’s analysis of assumptions used to calculate payment amounts 

indicates payments for imaging services under the physician fee schedule are too high. 

However, there is a lack of information to support alternative assumptions. 

We will implement the DRA provisions through notice and comment rulemaking. 

NPRMs for OPPS and the physician fee schedule are expected to be published this 

summer. Final rules will be published this fall and will be effective for services furnished 

on or after January 1, 2007. 

We realize that significant technological advances in imaging capabilities have made 

a difference in clinical practice and in the lives of patients. However, we want to ensure 

that our payment systems reflect clinically appropriate care and do not provide 

inappropriate incentives for growth in volume and intensity of services with limited 

clinical benefit. To that end, CMS will continue to work with the physician community, 

other interested parties, and the Congress as we refine our payments for medical imaging. 

I thank the Subcommittee for its time and look forward to answering any questions you 

might have. 
25

Table 1: Spending Growth by Type of Service from 2004 to 2005 

Type of Service Growth 

Rate 

Percent of 

Spending 

Contribution 

to Increase 

Percent of 

Increase 

Evaluation and 

Management 

7% 37% 2.6% 31% 

Procedures 9% 26% 2.5% 29% 

Imaging 16% 14% 2.3% 27% 

Lab and Other Tests 11% 12% 1.3% 15% 

Drugs (under the SGR) -3% 9% -0.3% -4% 

Other Services 20% 1% 0.3% 4% 

Total 8.5% 100% 8.5% 100% 

Source: Table 2 in April 7, 2006 letter from Herb Kuhn, Director, Center for Medicare 

Management, CMS to Glenn M. Hackbarth, Chair, MedPAC 

Table 2: Spending Growth for Four Categories of Imaging Services 

Types of 

Imaging 

Services 

2003 

Growth 

Rate 

2004 

Growth 

Rate 

2005 

Growth 

Rate 

2003-

2005 

Growth 

Percent 

of 2005 

Spending 

2005 

Contribution 

to Increase 

Standard 

Imaging 

15% 15% 8% 43% 5% 0.4% 

Advanced 

Imaging 

20% 21% 25% 82% 5% 1.3% 

Echography 13% 13% 17% 49% 3% 0.6% 

Imaging 

Procedure 

10% 11% 20% 47% 1% 0.1% 

Total 

Imaging 

16% 16% 16% 56% 14% 2.3% 

Source: From Table 6 in April 7, 2006 letter from Herb Kuhn, Director, Center for 

Medicare Management, CMS to Glenn M. Hackbarth, Chair, MedPAC 

 MR. DEAL. I thank the gentleman. 

 Mr. Hackbarth. 

MR. HACKBARTH. Thank you, Chairman Deal, and Ranking 

Member Pallone, other members of the committee. It is good to see you 

again. 

 As has been discussed already, Medicare expenditures for diagnostic 

imaging have been increasing rapidly, and having passed out to you two 

graphs from our testimony that illustrate this point, the first graph shows 

that imaging services per Medicare beneficiary increased 62 percent 

from 1999 to 2004. This compares to 31 percent increase for all fee 

schedule services. 
26

 This 62 percent increase is an increase in what we refer to as the 

volume and intensity of imaging services. In other words, it does not 

include any price effect. This is just the increased utilization and 

complexity of the services provided. Roughly about 20 percent of this 

increase in volume and intensity relates to the migration of services from 

hospital outpatient departments into physician offices. 

 The second graph that you have in front of you shows that there are 

substantial variations in growth rates of different types of imaging 

services, with advance imaging in nuclear medicine leading the way with 

the most rapid increases. 

 The question of the day, of course, is whether growth in imaging is a 

good thing or a bad thing. The answer is it is some of each. The growth 

in imaging is due to a variety of different factors. 

 First of all, as many members of the committee have pointed out, 

there have been tremendous improvements in the quality of imaging 

techniques. Improvements that lead to better healthcare for patients may 

result in reduced expenditures in some individual cases for other 

services. In addition to that, at least some types of equipment have also 

been falling in price and shrinking in size, making it easier to move that 

equipment from hospital settings or other institutional settings into 

physician offices. Those convenient locations, in turn, make it easier for 

physicians and patients to do more imaging. Some physicians also look 

to imaging to provide some protection against malpractice suits, a 

widespread concern among physicians. And of course, some physicians 

also see income from imaging as a supplement to their professional fees, 

particularly since misalignment between the fees paid and actual cost 

may have created some unusual profit opportunities. 

 From MedPAC’s perspective, two types of research suggest that 

imaging is worthy of your attention. First, we have found three-fold 

variation across the country in the use of imaging per Medicare 

beneficiary. This is twice as much variation as we find for major 

procedures. In addition, researchers at Dartmouth have found that high 

use of imaging does not necessarily correlate with better outcomes, nor 

does high use of imaging correspond with lower cost for other services. 

 Let me be clear here. For individual imaging services, the improved 

outcomes can be demonstrable, easily seen, or the substitution for other 

services is readily seen. Research shows, however, that more in the 

aggregate is not necessarily better. 

 We have also found that other researchers, as well as private 

purchasers of imaging, have found evidence of quality problems, 

including problems with improperly maintained equipment or poor 

image quality. In addition, there are some problems with interpretation 

of results. 
27

 It is difficult to gauge how prevalent these problems might be based 

on a limited number of studies with small sample sizes. MedPAC’s 

concern, however, is that whatever problems exist are likely to increase 

as imaging rapidly moves to office settings from institutional settings 

where there is more oversight, both by outside agencies and by peers. 

This risk is particularly great given the increasing sophistication of both 

the equipment and the techniques. It is important to keep in mind that 

while good imaging can improve outcomes, if imaging is not done well 

there is great risk in that for the patient as well. 

 So what does MedPAC recommend? With regard to quality, we 

recommend that Congress direct HHS to set standards for all providers 

who bill Medicare for performing and interpreting diagnostic images. 

This is an approach that has been successfully applied to mammography 

services. With regard to the growing volume and intensity of service, we 

recommend that CMS develop tools that measure resource use by 

physicians--all services, not just imaging--and provide confidential 

feedback to physicians on how their pattern compares with their peers. 

 Second, we recommend that CMS expand the coding supplied to 

Medicare claims to help counteract unbundling and other billing 

problems. 

 Third, we recommend that CMS work to improve the accuracy of the 

rates paid for imaging services. 

 Finally, we recommend that CMS strengthen rules that limit 

physician financial incentives to order more imaging services. I am 

pleased to say that CMS has, in fact, taken at least some steps on each of 

these recommendations related to volume and intensity. 

 Taken together, MedPAC believes that these recommendations about 

quality and cost will help increase the value received for the money spent 

on imaging services, both by the program and by Medicare beneficiaries. 

 Thank you. I look forward to your questions. 

 [The prepared statement of Glenn M. Hackbarth follows:] 

PREPARED STATEMENT OF GLENN M. HACKBARTH, CHAIRMAN, MEDICARE PAYMENT 

ADVISORY COMMISSION

Chairman Deal, Ranking Member Brown, distinguished Subcommittee members, I 

am Glenn Hackbarth, Chairman of the Medicare Payment Advisory Commission 

(MedPAC). I appreciate the opportunity to be here with you this morning to discuss the 

quality and volume of imaging services for Medicare beneficiaries. 

Technological progress in imaging over the past years, and its promise for 

improving diagnosis, treatments, and health outcomes are impressive. In addition, 

improvements in technology have made those services available outside the hospital in 

settings such as imaging centers and doctors’ offices—with concomitant improvements in 

convenience for patients. However, at the same time there has been rapid and sustained 

growth in the volume of imaging services for Medicare beneficiaries; and there are 

concerns about potential overuse of imaging services, quality problems, and possible 
28

inaccuracies in Medicare payment rates. As an example of the rapid growth in imaging, 

according to the Wall Street Journal, there are now more magnetic resonance imaging 

(MRI) scanners in the Pittsburgh area than in all of Canada and, in 2003, there were over 

13 computed tomography (CT) scans provided for every 100 members of the largest 

health plan in the area. 

The Commission has investigated imaging quality and growth through data analysis, 

consultations with private sector experts in the management of imaging services, 

discussions with medical specialty societies, and a review of the available literature. 

After public discussion and deliberation the Commission, by a unanimous vote among 

those present, recommended in our March 2005 report that: 

• the Secretary of HHS improve Medicare’s coding edits for imaging studies, 

• the Congress direct the Secretary to set standards for all providers who bill 

Medicare for performing and interpreting diagnostic imaging services, 

• the Secretary measure physicians’ use of imaging services so that physicians can 

compare their practice patterns with those of their peers, and 

• the Secretary strengthen the rules that limit physicians’ financial incentives to 

order more imaging services. 

Taken together, these actions should help add value to the imaging services 

Medicare buys. 

While we are pleased that some of our recommendations have been adopted by the 

Congress and the Centers for Medicare & Medicaid Services (CMS), we believe that it is 

important for all of our recommendations to be implemented. The concerns identified in 

our March 2005 report have not diminished. 

Growth has been dramatic 

Diagnostic imaging services paid under Medicare’s physician fee schedule grew 

more rapidly than any other type of physician service between 1999 and 2004. While the 

sum of all physician services grew 31 percent between those years, imaging services 

grew twice as fast, by 62 percent (Figure 1). This measure is the growth in the volume 

and intensity of services per beneficiary; we have removed changes resulting from 

increases in the number of beneficiaries and changes in prices during those years. Not all 

imaging services grew at this rate; some grew more slowly while some grew faster. 

Advanced imaging and nuclear medicine services, which are among the most expensive 

studies, led the way: MRI of parts of the body other than the brain grew by 140 percent; 

nuclear medicine grew 112 percent; and CT of parts of the body other than the head also 

grew 112 percent (Figure 2). 

In dollar terms, Medicare spending for imaging services paid under the physician fee 

schedule (including beneficiaries’ cost sharing) grew by nearly 90 percent, from $5.8 

billion in 1999 to $10.9 billion in 2004. Increased spending on these services has also led 

to higher Part B premiums for beneficiaries. 
29

19 20

43 44

62

0

5

10

15

20

25

30

35

40

45

50

55

60

65

E&M Major

procedures

Tests Other

procedures

Imaging

Percent

Growth of all 

physician 

3

Note: E&M (evaluation and management). 

Source: MedPAC analysis of Medicare claims data. 

Some argue that much of this increase was attributable to the movement of imaging 

from hospital outpatient departments to settings paid under the physician fee schedule. 

However, we estimate that only about 20 percent of the growth in the volume and 

intensity of fee schedule imaging services between 1999 and 2002 was related to the 

migration of imaging from facility settings (such as hospitals) to physician offices. The 

remaining 80 percent of growth was related to factors other than shifts in site of care. The 

movement of imaging from outpatient departments to physician offices raises another 

concern: the institutional standards that govern the performance and interpretation of 

studies in hospitals are usually absent in physician offices. 

Imaging shows highest cumulative growth in 

 services per beneficiary (1999−2004) 
30

140

112 112

84

66

43 39

27

-2 -20

0

20

40

60

80

100

120

140

160

MRI, other than brain

Nuclear medicine

CT, other than head

MRI, brain

Echography, heart

CT, head

Cath & related imaging

X-ray, musculoskeletal

X-ray, chest

Percent

Growth in all 

imaging

62

Note: MRI (magnetic resonance imaging), CT (computed tomography), cath (cardiac 

catheterization). 

Source: MedPAC analysis of Medicare claims data. 

The growth in imaging services could be driven by various factors, among them: 

• technological innovation that has improved physicians’ ability to diagnose 

disease and made it more feasible to provide imaging procedures in physician 

offices, 

• patients’ desire to receive diagnostic tests in more convenient settings, 

• physicians practicing defensive medicine, 

• possible misalignment of fee schedule payment rates and costs, and 

• physicians’ interest in supplementing their professional fees with revenues from 

ancillary services. 

Some of these factors raise concerns that not all of the growth in the use of imaging 

services may be appropriate, and that quality safeguards may need to be put in place. 

Are all imaging services appropriate? 

The use of imaging services varies widely across the country. In fact, the average 

use of imaging services in one area can be three times the average use in another area. 

This variation is twice that seen in the use of major procedures. This finding raises a 

concern about the value of some of those services because geographic areas with a 

disproportionate use of health services in general do not have better health outcomes, 

according to researchers at Dartmouth Medical School (Fisher and Wennberg). Those 

researchers also find that wide variations in the use of discretionary services, such as 

imaging and diagnostic tests, are sensitive to the supply of physician and hospital 

resources. 

In a separate study for MedPAC, Dartmouth researchers found that regions 

providing more imaging services do not have higher survival rates among Medicare 

beneficiaries. Their study examined whether long-term survival in three cohorts—

Cumulative growth in imaging volume per 

 beneficiary varies (1999−2004) 
31

patients with heart attacks, colon cancer, and hip fractures—was better in regions with 

higher versus lower imaging use. They found that increased use of imaging services was 

not associated with improved survival in any of the three study groups. Although survival 

is a limited measure of quality, this analysis raises questions about the value of additional 

imaging. 

In addition, there is specific evidence that at least some imaging services are 

overused. According to the American College of Radiology (ACR), patients with 

uncomplicated low back pain (without serious risk factors or signs of serious pathology) 

should not receive imaging studies. However, the National Committee for Quality 

Assurance found that nearly one-fourth of patients with low back pain in managed care 

plans received unnecessary imaging services, based on the ACR standard. These 

unnecessary tests included plain X-rays as well as costly MRI and CT scans. 

Quality varies

According to published studies and health plans we consulted, providers vary in 

their ability to perform quality imaging procedures. In one study, published in Radiology

(1998), BlueCross BlueShield of Massachusetts inspected 1,000 imaging providers to 

evaluate the quality of their equipment, technicians, and other features. These providers 

offered a variety of modalities, including MRI, CT, and nuclear medicine. Nearly onethird of the providers had at least one serious deficiency, such as film processing 

problems, failure to monitor radiation exposure, poor image quality, or uncalibrated 

equipment. Eleven percent of the providers had severe problems that could not be easily 

remedied, while 20 percent had deficiencies that could be remedied. Although 

chiropractic and podiatric offices were most likely to have had problems, many other 

specialties also had deficiencies. 

According to a study in the American Journal of Roentgenology (2000), another 

health plan that inspected almost 100 nonradiologist offices that provided radiography 

services identified serious problems in 78 percent of the offices. These problems 

included lack of proper image identification (e.g., noting left or right side of body) and 

use of equipment that had not been inspected during the previous year. 

In our March 2004 public meeting a panel of health plans and imaging benefit 

managers informed us that some providers fail to meet standards because their imaging 

equipment is old or not working properly. Physician offices sometimes acquire used 

equipment from a hospital and continue to use that equipment beyond its useful life. 

Quality problems may lead to duplicative studies, inaccurate studies, missed or 

inaccurate diagnoses, and inappropriate treatment. A study published in the Journal of 

Vascular Surgery (2004) found that vascular ultrasound providers that were not 

accredited often produced inaccurate carotid ultrasound examinations. In that study, 

carotid ultrasound tests performed by nonaccredited labs for 174 patients were repeated 

by an accredited lab that followed standards for diagnostic criteria, testing protocols, and 

technician training. For 61 percent of the patients, findings by the accredited lab 

contradicted findings by the nonaccredited providers in a way that would affect patient 

management. The nonaccredited providers had either significantly overestimated or 

underestimated disease severity. Studies that overestimated severity could have led to 

unnecessary surgery for 88 patients and studies that underestimated severity could have 

resulted in no surgery for 19 patients who needed it. 

There may also be problems with the quality of interpretation of imaging. For 

example, in one study published in the Annals of Emergency Medicine (1995), over 500 

CT scans that were interpreted by emergency physicians were also read by radiologists. 

Radiologists disagreed with the emergency physicians’ interpretations in 39 percent of 

the cases, some of which were potentially clinically significant misinterpretations (e.g., 

major false negatives or positives). Another study by an imaging benefit company found 

physicians’ interpretation reports, which are an integral part of a diagnostic examination, 
32

to be incomplete. The study found half of the reports examined lacked information on 

the indication for the study and many lacked information on the views taken. 

Setting standards for imaging providers and interpreters

The lack of quality oversight for imaging tests provided in physician offices and 

rapid volume growth lead to our first recommendation: The Congress should direct the 

Secretary to set standards for providers who bill Medicare for performing and/or 

interpreting diagnostic imaging studies. To reduce the burden on CMS, the Secretary 

should select private sector organizations to administer the standards. As many 

physicians integrate imaging services into their office practices, ensuring that these 

studies are done by skilled technicians using appropriate equipment and interpreted by 

qualified physicians should improve the accuracy of diagnostic tests and reduce the need 

to repeat studies, thus enhancing quality of care and helping to control spending. 

Requiring physicians to meet quality standards as a condition of payment for 

imaging services provided in their offices would represent a major change in Medicare’s 

payment policy. Traditionally, Medicare has paid for all medically necessary services 

provided by physicians operating within the scope of practice for the state in which they 

are licensed. We believe that this policy change is warranted by the growth of imaging 

studies provided in physician offices and the lack of comprehensive standards for this 

setting. There are some limited precedents for this policy in imaging. 

Current standards 

Aside from a physician supervision requirement, no national Medicare standards for 

imaging apply to physician offices, and some imaging modalities, such as MRI, are not 

covered by any government standards. CMS has developed national standards for 

imaging provided in hospitals and independent diagnostic testing facilities. For example, 

hospitals that treat Medicare beneficiaries must comply with Medicare’s conditions of 

participation, which include standards for radiology services. In addition, several 

Medicare carriers have minimum standards for the quality of some types of ultrasound 

studies performed in either hospitals or physician offices, but these standards have not 

been adopted nationally. 

There are also two limited cases where Medicare has set standards for imaging 

interpretation. First, the Medicare carrier for New York (Empire) sets standards for 

physicians who wish to bill for interpreting an echocardiography study. Another 

exception is contained in CMS’s recent decision to cover positron emission tomography 

(PET) scans for the diagnosis of patients with mild cognitive impairment and early 

dementia. The coverage decision specifies that tests be interpreted by physicians only in 

certain specialties, such as nuclear medicine and radiology, who have expertise in reading 

these scans. 

There is a national standard for mammography. Under the Mammography Quality 

Standards Act, the Food and Drug Administration (FDA) develops and enforces quality 

assurance standards for mammography equipment, technical staff, and the physicians 

who interpret mammograms. The GAO has credited the FDA standards with improving 

the quality of mammograms without decreasing access. Failure rates for image quality 

decreased from 11 percent before the Act to 2 percent after. 

State radiation control boards license facilities that use radiation-producing 

equipment (such as X-ray and CT machines), but their primary mission is to ensure 

patient safety rather than the quality of images, and the standards are not always 

comprehensive or rigorously enforced. The state boards do not regulate MRI or 

ultrasound services. 

Several of the private insurers we interviewed require that hospital outpatient 

departments, freestanding facilities, and physician offices that provide imaging services 

meet basic standards. These standards relate to the imaging equipment, radiology 
33

technicians, image quality, patient safety, and interpreting physicians. Plans and their 

vendors often require that providers become accredited by a private organization, such as 

the American Institute for Ultrasound in Medicine (AIUM), American College of 

Radiology (ACR), or the Intersocietal Accreditation Commission (IAC). 

Developing standards 

The Congress should grant the Secretary authority to develop standards. The 

Secretary should review the criteria used by private plans and accreditation organizations, 

and consult with accreditation organizations, physician groups, and manufacturers when 

developing these requirements. CMS should strongly consider setting standards for at 

least the following areas: the imaging equipment, qualifications of technicians, 

qualifications of the supervising and interpreting physicians, technical quality of the 

images produced, and procedures for ensuring patient safety. 

Several private accreditation programs and one government agency have already 

developed standards for physicians who interpret certain types of imaging studies and 

prepare the reports. Accreditation organizations, such as the AIUM, ACR, and IAC, 

generally set minimum standards for some combination of professional training, 

experience, and education of physicians who interpret studies. The IAC has 

demonstrated that it is possible to forge agreement among different specialties on 

common standards. The IAC has convened representatives of several specialty groups to 

jointly develop facility and physician standards for echocardiography, nuclear medicine, 

and vascular ultrasound. 

Although private plans sometimes base permission to bill for imaging procedures on 

the physician’s specialty, the Commission has not recommended this approach. The 

practice of medicine is evolving quickly, and specialty training may change over time. 

Thus, CMS should develop criteria that allow physicians of different specialties to 

receive payment for interpreting studies. Similar to the requirements set by private 

accreditation organizations for interpreting physicians, Medicare’s standards should be 

based on some combination of physician training, experience, and continuing education. 

Standards will vary for each major imaging modality. 

To reduce CMS’s administrative burden, the agency should authorize private 

accreditation organizations to verify that providers meet the quality standards set by the 

Secretary. CMS should also have the authority to change the roster of organizations that 

verify compliance. Private insurers often rely on accreditation programs to certify that 

their providers meet quality standards. 

To allow CMS to implement national standards in all settings, the Congress should 

provide the Secretary with specific statutory authority to do so. Although CMS has set 

quality standards for various types of providers (such as hospitals and skilled nursing 

facilities), there are very few examples of federal standards that apply to physician offices 

(the primary exceptions are mammography and clinical laboratory tests, which are 

authorized by statute). 

Measuring physicians’ use of imaging services

The Commission also recommended: The Secretary should use Medicare claims 

data to measure physicians’ resource use and confidentially provide information to 

physicians about their resource use relative to their peers. Educating physicians about 

their resource use should encourage those who practice significantly differently than their 

peers to reconsider their practice patterns. Measuring use of imaging services should be 

done as part of a broader initiative in which the use of a variety of types of services for 

episodes of care is measured. In our June 2006 report, we examined one method to 

achieve this—episode groupers. An episode grouper links all the care a beneficiary 

receives that is related to a particular spell of illness or episode and adjusts for patient 

characteristics. This tool could be used to provide information to physicians about their 
34

practice patterns and could also help us examine whether imaging substitutes for other 

types of services. 

Expanding coding edits

The Commission’s third recommendation was: The Secretary should improve 

Medicare’s coding edits that detect unbundled diagnostic imaging services and reduce the 

technical component payment for multiple imaging services performed on contiguous 

body parts. We are pleased that CMS and the Congress (as part of the Deficit Reduction 

Act, or DRA) adopted our recommendation to reduce payments for multiple imaging 

services performed on contiguous body parts in the same session. 

A number of private plans adjust payments when providers bill for multiple imaging 

services performed on contiguous body parts. Some private insurers pay the full amount 

for the first service but a reduced amount (usually half) for the technical component of an 

additional study that is of the same modality (e.g., MRI or CT). This strategy is based on 

the premise that savings in clerical time, preparation, and supplies occur when multiple 

studies of the same modality are performed during one patient encounter. In last year’s 

physician fee schedule final rule, CMS adopted this policy. The DRA required that 

savings from this policy go to the Medicare trust fund, rather than be redistributed among 

other physician services. 

Currently, Medicare uses edits to determine whether a claim meets the program’s 

payment rules. Some private insurers have developed their own set of coding edits that 

go beyond Medicare’s existing edits. Some plans have implemented more rigorous 

policies to address unbundling of services—that is, separately billing for two procedures 

when one is a component of the other—and billing for mutually exclusive procedures. 

For example, one imaging benefit manager does not pay for both a CT of the head and 

CT of the maxillofacial region at the same time because the head includes the 

maxillofacial area. CMS should develop more extensive edits for imaging services. 

Limiting financial incentives for physicians to order more imaging services 

The Commission also recommended strengthening the rules that limit physicians’ 

financial incentives to order imaging services for their patients. Specifically, we 

recommended that the Secretary should: 

• include nuclear medicine and PET procedures as designated health services 

under the Ethics in Patient Referrals Act (the Stark law), and 

• expand the definition of physician ownership in the Ethics in Patient Referrals 

Act to include interests in an entity that derives a substantial proportion of its 

revenue from a provider of designated health services. 

These changes should reduce physicians’ financial incentives to refer patients for 

additional imaging services, which should help control Medicare spending on imaging. 

Physician ownership of health care facilities may create a financial incentive to 

order additional services. Studies by the GAO and others have found that physicians who 

invest in diagnostic imaging centers or who have imaging equipment in their offices refer 

their patients more frequently for MRI, CT, nuclear medicine, and ultrasound studies. 

The Ethics in Patient Referrals Act prohibits physicians from referring Medicare or 

Medicaid patients for certain services to providers with which the physician has a 

financial relationship. It also prohibits those entities from submitting claims for services 

provided to patients referred by the physician-investor. The law applies to a set of 

“designated health services” (DHS), which includes radiology and certain other imaging 

services (MRI, CT, and ultrasound). 

Until recently, CMS had excluded nuclear medicine from the Stark law’s 

prohibitions. This decision allowed physicians to invest in freestanding centers that 

provide nuclear medicine procedures and refer Medicare or Medicaid patients to these 

facilities. The Commission recommended that CMS add nuclear medicine to the list of 
35

designated health services because of the recent rapid growth of these services and their 

similarity to other imaging services. In last year’s physician fee schedule final rule, CMS 

adopted our recommendation, effective in 2007. Prohibiting physicians from referring 

Medicare or Medicaid patients to nuclear medicine facilities they own should reduce their 

financial incentives to refer patients for these services. 

In a final rule issued in 2001, CMS created a narrow exception that is inconsistent 

with the underlying intent of the Stark law. This exception permits physicians to own 

entities that provide services and equipment to imaging centers and other DHS providers, 

as long as the physicians do not own the actual entity submitting claims to Medicare or 

Medicaid. For example, physicians can buy an MRI machine from a manufacturer, lease 

it to an imaging center, and be reimbursed a fixed amount per use. This arrangement 

creates a financial incentive for the physicians who lease the MRI to the center to refer 

patients to that center, which could lead to higher use of services. Prohibiting these 

arrangements should help ensure that referrals are based on clinical, rather than financial, 

considerations. 

Assuring the accuracy of imaging payment rates 

We are also concerned about the accuracy of Medicare’s payment rates for imaging 

studies. In a recent proposed rule, CMS proposed basing payments for the technical 

component of imaging services on resource use (these rates are currently based primarily 

on historical charges). These resources include clinical staff, medical equipment, and 

supplies. Equipment is a large share of the cost of many imaging services, such as MRI 

and CT. CMS’s estimate of the cost of imaging equipment per use may be too high. The 

agency assumes that imaging machines (and all other types of equipment) are used 50 

percent of the time a practice is open for business. We surveyed imaging providers in six 

markets and found they were using MRI and CT machines much more frequently, which 

should lead to lower costs per use. In addition, CMS assumes that providers pay an 

interest rate of 11 percent per year when purchasing equipment, but more recent data 

suggest that a lower interest rate may be more appropriate (a lower interest rate would 

reduce the estimated cost of equipment). CMS should revisit the assumptions it uses to 

price imaging equipment. 

Impacts 

Setting standards should increase the quality of imaging services provided to 

Medicare beneficiaries, not decrease access, and potentially decrease spending by 

reducing duplication of tests and unnecessary services. Physician resource measurement 

should educate physicians who have higher use, and has the potential to decrease 

spending in the long run. Improved coding edits should reduce inappropriate billing and 

thus decrease spending. Limiting financial incentives for physicians to order imaging 

services should also help control spending. Beneficiaries will not only experience higher 

quality imaging services if these recommendations are implemented, but will also benefit 

from reduced cost sharing and part B premiums. 

 MR. DEAL. Thank you. I will start it off. 

 Mr. Kuhn, I believe you testified that imaging services, such as CAT 

scans and MRIs, grew by 82 percent between 2003 and 2005, and that 

the equipment used to perform these services is routinely and quite 

frequently used in the physician office setting. Is that correct? 

 MR. KUHN. That is correct. 

 MR. DEAL. Okay. You also testified that the technical component of 

payment for some services performed in a physician’s office, such as an 
36

MRI of the brain or abdomen, are currently being reimbursed at 78 

percent more than a hospital for rendering the same service. 

 Some providers would argue that the physician should be paid higher 

for the cost of this equipment, because hospitals can spread out the 

capital cost of the equipment, whereas the physician cannot. However, I 

am interested in your testimony regarding the equipment assumptions 

indicated by MedPAC. Specifically, you testified that if a machine is 

actually used most of the time, its cost is spread across the units of 

service, resulting in a lower cost per service. Therefore, since you stated 

that MRIs and other advanced imaging services grew by 82 percent in 2 

years, isn’t it logical to consider that perhaps the cost of the equipment 

that is highly utilized in the physician’s office is, in fact, spread out over 

the cost of services that are provided? 

 MR. KUHN. That is correct, Congressman. There is a real marginal 

cost issue here that I think people need to think about, and the other issue 

I think this really brings forward in your question is an assumption that 

we make, and this is an assumption that goes back to 1997. We make an 

assumption in terms of pricing in the physician office that is going to be 

used 50 percent of the time, but I think over the last decade, what we 

have begun to see, at least MedPAC has evidence that they shared with 

us, information we are starting to get from independent diagnostic testing 

facilities and physician’s offices that they are using the equipment more 

and more than 50 percent of the time. 

 And so basically what you see is that the more you use it, the less it 

is going to cost to use this equipment. So some people are saying well, 

you have got an apples and oranges comparison between the hospital 

outpatient department and the physician fee schedule that is out there, but 

if we were to update and move forward, I think, in terms of this 

utilization rate, I think you would see those numbers much more closely 

aligned than I think they currently are now. 

 MR. DEAL. There are two components; the payment for the 

professional component and the technical component that is being paid 

separately. Now as I understand it, you have testified that 78 percent 

higher rate in some cases for things like MRI are being paid to 

physicians in their offices versus the hospital outpatient setting. But you 

also point out, I believe, that the physicians receive an additional fee for 

reading those images. Is that correct? 

 MR. KUHN. Right. There are two parts to the physician payment, as 

you indicated, the professional component and the technical component. 

The DRA provisions only deal with the technical component, that is, the 

equipment, the staff, the information--the education, the material really 

to do the equipment component of this. The professional component, it 

is no different between the hospital outpatient and in the physician office. 
37

So that is untouched by this particular provision. It is just the technical 

part where they are trying to make sure that we have a site neutral 

payment system. 

 MR. DEAL. Mr. Hackbarth, with regard to the private insurance 

sector, are they seeing the same type of percentages of growth in imaging 

in the private insurance area as we are seeing in the Medicare program 

and if so, what are they doing to try to curb their costs? 

 MR. HACKBARTH. They are seeing high rates of increase in imaging 

in the private sector. Some of our recommendations are similar to things 

being done by private payers, for example, coding edits is a widely used 

tool. Many private payers are also engaged in efforts to develop 

information for physicians in how their use of various resources, 

including imaging, compares to their peers. Some private payers go 

further than that to actually credential the physicians who do imaging 

and limit it to people. They will only pay for physicians who have 

certain training. Some insurers also require prior authorization for 

expensive imaging procedures. 

 We did not embrace those particular steps. We limited our 

recommendations to things like the coding edits, getting the prices right, 

and providing feedback to physicians. We did that in recognition of the 

complexity of this issue and how challenging it is to identify and 

encourage the appropriate imaging while discouraging the inappropriate. 

It is a tough task. 

 MR. DEAL. Thank you. 

 Mr. Pallone, you are recognized for questions. 

 MR. PALLONE. Thank you, Mr. Chairman. I wanted to ask my 

questions of Mr. Hackbarth. 

 The witnesses on the second panel are going to focus a great deal on 

provider reimbursement and also on standards for imaging, but what 

today’s testimony does not sufficiently focus on, in my opinion, is the 

effect on the beneficiary of both the growth in imaging services and the 

changes in Medicare’s payments for these services. To the extent 

Medicare is overpaying for services, the beneficiary too winds up 

overpaying because their co-sharing is based on Medicare’s payment 

rates, and to the extent services are growing inappropriately, the 

beneficiaries’ Medicare Part B premiums are increasing as a result. 

 So I just wanted you to comment on the effect of all this on 

beneficiaries and their out-of-pocket expenses. 

 MR. HACKBARTH. Yes. Well, you have well-summarized the 

impact. It is both at the point of service, in terms of patient cost sharing, 

and in terms of the rapidly increasing Part B premium. Herb, in his 

statement, indicated the rapid growth in the Part B premium, and a big 
38

piece of that growth in Part B expenditure is, in fact, attributable to 

imaging. 

 MR. PALLONE. I don’t know if you wanted to comment, too, Mr. 

Kuhn? 

 MR. KUHN. Yes, Mr. Pallone. It is a good point and I agree with 

Glenn. I think you summarized it very well. What we are seeing here is 

kind of two parts. In addition to the beneficiary, there is the co-payment, 

and so if there is a higher fee in the physician office, the co-payment is 

going to be higher as a result of that. But also, this is a real driver in 

terms of the Part B premium. As indicated last week in the mid-session 

review, we came out with the latest estimates of what we think the Part B 

premium will be in 2007, and it looks like it is going to be about $98.40. 

That is about an 11 percent increase from the current rate of about 

$88.50. There are a lot of drivers in that, but the largest drivers are 

hospital outpatient services and physician services. And within the 

physician services, medical imaging is really a major driver as well. 

 MR. PALLONE. Thank you. 

 I want to go back to Mr. Hackbarth again. MedPAC has 

recommended that the Secretary of HHS establish quality and training 

standards for providers who bill Medicare for imaging services, and 

Medicare has not previously required physicians to meet quality 

standards as a condition of payment for imaging services. Do you feel 

that imaging services uniquely require such standards, and aren’t there 

already Medicare standards for imaging services provided in an 

outpatient hospital facility, and what are other payers doing in this area? 

 MR. HACKBARTH. Right. As a general proposition, Medicare does 

not establish quality standards service-by-service, so in that sense this 

would be breaking new ground. But there are some precedents. I 

mentioned, I think, earlier the mammography quality standards which, in 

fact, have been shown to improve the quality of mammography imaging 

in work done by GAO. So that is a recent precedent for this. There are 

also some more narrow precedents where in its coverage decision on 

PET scanning, for example, CMS included some standards related to 

qualifications, and some of the individual carriers also have quality 

standards for particular procedures. 

 It is an important step and we think it is one that is warranted 

because of the rapid growth, and as I said earlier, the migration of this 

complex and very important activity from institutional settings to 

physician offices where there is less oversight. 

 MR. PALLONE. Okay. You might get the impression that MedPAC 

is advocating that only radiologists should perform imaging, but I know 

that doesn’t reflect your recommendations as I understand them. Isn’t 

MedPAC simply saying that physicians who are paid by Medicare for 
39

imaging services, regardless of whether they are radiologists, 

cardiologists, gynecologists, or others, be trained and meet certain 

standards? Isn’t that right? 

 MR. HACKBARTH. Absolutely, and there has been considerable 

misunderstanding on this point, so I appreciate your clarifying it. 

 We are not recommending that only radiologists be permitted to do 

imaging for Medicare beneficiaries. We are saying that all physicians 

who do, as well as the staff who do the technical component, ought to 

meet quality standards that have to do with their education, training, and 

experience. 

 MR. PALLONE. Okay. Do you recommend that the Secretary of 

HHS should select private-sector organizations to administer any new 

standards for imaging providers and interpreters, and what specific 

private-sector organizations would you recommend and why? 

 MR. HACKBARTH. Well, we do recommend that the actual review of 

provider qualifications be done by private organizations. I want to 

emphasize, though, that we think the standards ought to be set by the 

Department and then the administration of those standards be done by 

private organizations. We recommend that in part to try to minimize the 

workload on CMS, and in part, because there are existing organizations 

who do this sort of work, among other things, for private payers. And so 

we think that the sort of people who can do the work well are available 

and we ought to use those resources. 

 MR. PALLONE. All right, thank you. 

 Thank you, Mr. Chairman. 

 MR. DEAL. Thank you. 

 Dr. Norwood is recognized for questions. 

 MR. NORWOOD. Thank you, Mr. Chairman. 

 Mr. Kuhn, I have about five questions for you. I will submit them in 

writing. Can you answer those in 2 weeks? 

 MR. KUHN. We will answer you in 2 weeks, Dr. Norwood. 

 MR. NORWOOD. That is very acceptable. We need to move this 

quickly and we don’t have months and months. CMS, for example, takes 

months and months, but I presume you won’t. 

 MR. KUHN. We will do it in 2 weeks. 

 MR. NORWOOD. That is wonderful. 

 MR. KUHN. Do you yield back your time? 

 MR. NORWOOD. No, I don’t. 

 One question for you, however. How much of the growth in imaging 

utilization is a result today of increasing the amount of women receiving 

mammograms? How much does that contribute to the increase? 

 MR. KUHN. I don’t know if I have the specific breakdown in terms 

of mammography and how much that has led to the increase here. It is 
40

obviously a very valuable service, as we heard earlier, because it saves 

lives. 

 MR. NORWOOD. Does anybody have that number? 

 MR. KUHN. I don’t know if we have that number, but one thing I 

would just say on the mammography is we know we have been talking 

about this provision in the DRA. It is outside of this provision in the 

DRA because under current law, there is a site neutral payment for 

mammography, so it is the same in the physician office as it is in the 

outpatient. 

 MR. NORWOOD. But we don’t know the answer to the question? 

 MR. KUHN. I don’t know the answer, but we can find out. 

 MR. NORWOOD. How much of the growth is a result of MRI or CT 

scans used to identify the nature and location of strokes? What percent 

of that increase growth is caused by that? 

 MR. KUHN. I don’t know if we have the coding edits that can show 

that, but in those two particular areas--we group imaging into four 

different areas and that is in a category of advanced imaging, and that is 

probably the single largest growth area we are seeing in terms of 

measuring it right now. 

 MR. NORWOOD. So what percentage is it? 

 MR. KUHN. I could look at the chart here real quick-- 

 MR. NORWOOD. I don’t--does anybody know the answer? And if 

you don’t, just say I don’t know. 

 MR. KUHN. I don’t know right now, but we could find out. I think it 

is--advanced imaging, it looks like the growth rate was 25 percent in 

2005. 

 MR. NORWOOD. It seems to me that it is pretty important that you 

understand totally and completely what these increases are all about. 

 Mr. Hackbarth, I have eight questions for you in writing. 

MR. NORWOOD. Can I get an answer in 2 weeks? 

 MR. HACKBARTH. Sure. 

 MR. NORWOOD. That is very kind of you, sir. Thank you. 

 I made some notes. Let me see if I can read them. 

 You said increased imaging for--doctors are increasing what they do 

in imaging to supplement their professional fees. You did say that? 

 MR. HACKBARTH. Yes. 

 MR. NORWOOD. Can you-- 

 MR. HACKBARTH. Some physicians. 

 MR. NORWOOD. Can you prove that to me? 

 MR. HACKBARTH. I certainly can, among other things, give you 

examples of presentations that are made at physician conferences that are 

pitched at exactly that. 
41

 MR. NORWOOD. So you can prove it? It is pretty important because 

you are saying to us this is one of the major causes, and we have 

legislation that cuts the heck out of what we pay for these fees, and if that 

is true, it needs to have absolute proof to it. 

 MR. HACKBARTH. Dr. Norwood, I want to be clear that I am not 

saying that that is true of all physicians. 

 MR. NORWOOD. I understood that part. 

 MR. HACKBARTH. There are some physicians and-- 

 MR. NORWOOD. I speculate you are right. I want proof. 

 MR. HACKBARTH. Well, I can give you examples of it happening. 

 MR. NORWOOD. Okay, then you need to give me examples of it not 

happening so I understand are we talking about .001, are we talking 

about a normal occurrence? I mean, we have cut what we pay for 

imaging which is absolutely vital to healthcare today, and the patient is 

the one maybe in the end who is not going to fare well under this, and 

you say you have a study--and you and I both have been in this town 

long enough to know, you make a study say anything you want it to say. 

I want to be sure we are right about this as we move forward. 

 You also used the word “high use of imaging does not produce 

increased good outcomes.” First, what does high use mean, and can you 

prove that statement? 

 MR. HACKBARTH. Well, what I said was that individual cases of 

increased imaging can, in fact, improve outcomes. I think we both know 

those examples. 

 MR. NORWOOD. You said that. 

 MR. HACKBARTH. The research indicates that higher use of imaging 

services in the aggregate-- 

 MR. NORWOOD. Yes, I understand. 

 MR. HACKBARTH. --in total does not correlate with better outcomes. 

 MR. NORWOOD. I am trying to figure out who determines what high 

use is. I think I have had so many CAT scans I can’t believe it, but I am 

sure happy to be alive. Now, was one of them not needed? I don’t 

know. Who measures that? 

 MR. HACKBARTH. Well, on that particular issue, we are not saying 

that high use is a particular number. You just look at the change in 

volume of the imaging and then correlate that with improved outcomes. 

 MR. NORWOOD. Lastly, Congress cannot set standards. You said 

Congress should. Congress can’t anymore than CMS can set standards. 

I would rather have Congress do it. We have got more practicing 

physicians in Congress than we have got bureaucrat physicians in CMS. 

So in this case, I would rather Congress do it than CMS, but literally, 

neither one can actually do it. 

 I see my time is up, Mr. Chairman. 
42

 MR. DEAL. I thank the gentleman. 

 Ms. Capps. 

 MS. CAPPS. Thank you to our witnesses and I would like to ask 

questions of each of you, so I hope for brief answers. 

 Dr. Kuhn--Mr. Kuhn, I am concerned about how the cuts enacted in 

the Deficit Reduction Act could affect cancer patients’ access to needed 

services. Radiation therapy is less invasive, less expensive, and more 

curative than some other cancer treatments, and it has been brought to 

my attention by the American Society for Therapeutic Radiology and 

Oncology that due to a lack of discussion before inserting these cuts into 

the DRA, it is really unclear whether radiation therapy is included. Mr. 

Chairman, with your permission and unanimous consent, I would like to 

have the statement of the American Society for Therapeutic Radiology 

and Oncology inserted into the record, which explains their views on 

this. I wanted to ask you a yes or no question-- 

 MR. DEAL. Without objection. 

 [The information follows:] 
43
44
45
46

 MS. CAPPS. --whether radiation therapy is included in these cuts? 

 MR. KUHN. My understanding is yes. 

 MS. CAPPS. So the question then is, very brief answer, how do we 

maintain access to these services for cancer patients? 
47

 MR. KUHN. I think that is going to be the real key thing when we put 

out the proposed reg, which we should have out in the next few weeks. 

We are going to have a nice discussion about this with the stakeholder 

community at large when they can comment about the provisions that we 

put forward, based on our understanding and our read of the law, and 

have a dialogue on that. 

 The issue here, however, is what Congress was trying to do, as I 

understand with this provision, is really try to create a site neutral 

payment system, that we had a major delta between payments in an 

outpatient setting and a physician office setting, and was that appropriate 

not only for payments for the Medicare program, but was also that 

appropriate for the Medicare beneficiaries as well. 

 And so, we have got a couple of objectives here, to make sure that 

we can have fair and appropriate payment, treat the beneficiaries 

appropriately and fairly, but also make sure, as you indicated, that we 

keep this important access available to everyone. 

 MS. CAPPS. Well, thank you. We will be watching very carefully 

because it isn’t set and it is very critical how the path goes on in the 

future. 

 Mr. Hackbarth, I think you made some excellent points about the 

need to set and enforce better quality standards for physicians who 

perform and interpret diagnostic imaging services, while also more 

closely evaluating the use of imaging services by physicians to rid out 

possible overuse. Physicians will need to be empowered to be able to do 

this or even fraud within the system, we give them opportunities and 

ways to do it. If I understand you correctly, these efforts--these kinds of 

efforts should help reduce spending on these services. Is this true, in a 

brief answer, so I can give you a chance to follow up? 

 MR. HACKBARTH. I think what you are referring to is our proposal 

to feedback to physicians-- 

 MS. CAPPS. Right. 

 MR. HACKBARTH. --information about not just their use of imaging, 

but their overall patterns of care-- 

 MS. CAPPS. Right. 

 MR. HACKBARTH. --and do so initially in a confidential manner so 

physicians can compare themselves to peers. We think that is a very 

important approach for helping physicians improve their practice. 

 MS. CAPPS. And I would like to request of my colleagues that we 

find a way to use that information and be a part of that oversight. I think 

self-police and self-enforcement can go a long way, although it isn’t the 

bottom line. But I don’t think we are taking advantage of that expertise, 

which surely wants to save cost as well. 
48

 But here is the follow-up. However, so far the only congressionally 

enacted proposal involves cutting just across the board all outpatient 

imaging, even though we know that the procedures save lives. It is like 

we know there is waste and abuse out there, but we are going to cut it all, 

even though we don’t know, with a sledgehammer. 

 But let me give you the example, and then you can comment. A 

Mayo Clinic report which concluded that increased use of ultrasound 

guided fine-needle aspiration used to diagnose thyroid cancer has 

reduced the number of unnecessary surgeries and improved costs. 

Shouldn’t we wait to see the results of these kinds of studies and efforts 

before we do this blanket cut to reimbursement? Wouldn’t it be risky 

and really appalling to jeopardize patient access to imaging services 

without waiting to see if we can’t use other methods to reduce cost 

savings? 

 MR. HACKBARTH. MedPAC has not specifically looked at the DRA 

provision on limiting payment for imaging services, and I want to 

emphasize that because some people seem to think that it originated with 

MedPAC. It did not. 

 MS. CAPPS. Well, who can do it? How should it be done? 

 MR. HACKBARTH. Well, what MedPAC has done is we have looked 

at the general idea of trying to set payment rates at the level of efficient 

providers. Ideally, you would not have different payment rates solely 

based on the site of service and pay more for a less efficient provider of 

the same service. 

 MS. CAPPS. Right. 

 MR. HACKBARTH. So we want to set it at the level of efficient 

providers. Now, operationalizing that for imaging services or any other 

particular service is a fairly complicated task. You have got to make 

adjustments for the different types of payments--patients, rather, treated 

in different settings. You have got to be sure you have got the cost of 

efficient providers accurately calculated. 

 So in concept we can understand where the DRA provision is 

coming from, but we have not looked at the specifics of it, and I don’t 

have any position on it. 

 MS. CAPPS. I know I have used my time, but just a yes or no. Is 

anybody doing this, to your knowledge? 

 MR. HACKBARTH. Well, I assume CMS is. 

 MR. KUHN. Obviously, we are looking at this very hard in terms of 

the provisions we have already put forward in terms of the contiguous 

body part changes we made, and obviously we will move forward in 

terms of the implementation of the DRA provision as well. 

 MS. CAPPS. I think there is a big gap here. 

 Thank you very much. 
49

 MR. DEAL. The gentlelady’s time has expired. 

 I am recognizing members on the basis of order of appearance and 

seniority, and in that regard, Mr. Shimkus is recognized next for 

questions. 

 MR. SHIMKUS. Thank you, Mr. Chairman. Welcome to the 

panelists, and Herb, it is good to see you again. We have fought a lot of 

fights together. 

 As both you know, I was involved in part of the Deficit Reduction 

Act, was working with Gene Green of Texas on the abdominal aortic 

aneurysm provisions, which we were very excited about having that in 

the process, of course. That is what happens when you have big 

legislation. For every good thing that gets in, then there are other issues 

that don’t, and then you have to cast the tough vote, and sometimes you 

may not be fully aware of all the other provisions. 

 Having said that, there is a question about the cuts and in essence, 

the non-invasive diagnostic vascular studies. They really contain no 

imaging, so there is a question out there in the community, will they be 

affected by these cuts, and I want to submit a more precise question, 

because I am not smart enough to say it right without sounding terrible, 

but to make sure I get it right. But if you understand my question, I 

would welcome an answer on what does it deal with if it is a vascular 

study that contains no imaging? Is it part of these perceived reductions? 

 MR. KUHN. No, I think your point is well taken, and we have had a 

number of organizations that have come in to see us since the DRA was 

passed to have discussions about this kind of issue about whether the 

provisions in the DRA just deals with diagnostic imaging, or does it deal 

with therapeutic imaging? So there is a lot of different breaks here that 

we are spending a lot of time with our general counsel as we evaluate the 

DRA, and quite frankly, Mr. Shimkus, at this time I don’t think I have an 

answer for you, but we should when we have our proposed rule come out 

again, hopefully in the next 3 to 4 weeks, where we will have a chance to 

share with everybody our interpretation of what the statute says and then 

let the community at large give us comments on that. 

 MR. SHIMKUS. Would it be helpful for me to submit this question 

formally, or is it just as well we wait to read your ruling? 

 MR. KUHN. I think it would be helpful to have it in the record, so if 

you want to go ahead and submit it, we will make sure that we get it 

answered that way, and then we will also have it as part of the rule as 

well. 

 MR. SHIMKUS. Great, thanks. 

 The other question I have on this whole debate, which I thought 

would have been asked before I had a chance to ask questions, last week 

we had a hearing on medical liability, and other than just the tort issue, 
50

but what other options are out there. So as far as this, one of the 

questions would be is a lot of this, how it is termed additional utilization, 

has there been any look to see what part of this is defensive medicine that 

maybe the utilization is just to protect the providers of the healthcare 

services? 

 MR. KUHN. You know, it certainly is an issue, and maybe Glenn can 

speak to this as well, because they have looked at this and other issues 

pretty hard. 

 Beginning last year when we do an annual letter to MedPAC in the 

spring where we talk about the SGR issue and kind of give an indication 

of what it is going to look like for the following year, last year, and again 

this year, we went through a great deal of detail to provide a lot of 

specificity of what was out there, and that was when we really began 

breaking down into the level of detail that we did on imaging. One of the 

questions that we have asked the provider community overall is what is 

driving this in imaging and all these other areas we are seeing 

tremendous growth and physician spending, but particularly in imaging 

we really wanted to know what were all the factors that have been talked 

about here, but in particular, defensive medicine. We are getting a lot of 

mixed reports, but I think the general consensus we hear from the 

provider community is yes, that is one factor that is part of it. 

 I will see if Glenn has any thoughts on that as well. 

 MR. HACKBARTH. Yeah, I think unquestionably that is a factor in 

the increase. Off the top of my head, I couldn’t try to quantify what 

percentage of the increases are due to fear of malpractice. 

 MR. SHIMKUS. If I may butt in, I think based upon my friend, Dr. 

Norwood, I think what would help us is to get some quantifiable 

numbers in which we can really point--I know it is difficult to do, but I 

think that would be helpful to us. 

 But let me do the flip side of the coin. I have 33 seconds left. 

 What about any data that shows improved patient outcomes, based 

upon all this additional screening? I mean, on the, obviously, on the 

defensive medicine, but what about even though it may be perceived as 

over-utilization, is there an improvement in patient outcome? 

 MR. KUHN. No question, I am sure there are improved patient 

outcomes, and there have got to be a lot of studies that we could all 

produce to show that, which is good. I mean, the fact that you don’t have 

to do an incision to explore something, the fact that something that is 

hidden from view can be seen with imaging I think is just wonderful. 

And I think what this raises is the cost benefit of technology. It is a net 

benefit to society as we go forward, but I think the second part that 

anybody does to benefit society in terms of technology also has to look at 
51

is that there also has to be equal incentives to make sure that we have 

quality and not wasteful spending in this area as well. 

 And so those have to be balanced as we go forward here. 

 MR. SHIMKUS. Mr. Chairman--unless you want to answer, my time 

is expired. 

 MR. DEAL. I thank the gentleman. 

 Ms. Eshoo is recognized for questions. 

 MS. ESHOO. Thank you, Mr. Chairman, and I apologize for not 

being here from the beginning. I had an Intelligence Committee meeting 

that I tried to divvy up the time. This is an important hearing, and I think 

it is important to summarize how we arrived here. 

 Deficit Reduction Act was voted on in the House. These cuts were 

not in that bill. There was a conference committee. Certainly, the 

Chairman of the full committee, Mr. Barton, the Chairman of our 

subcommittee, Mr. Deal, were conferees. It is my understanding that Mr. 

Dingell and Mr. Brown were not included in the ultimate process where 

the outcome was determined for these cuts to imaging. Our committee 

had many hearings and we have many members on both sides of the aisle 

who have worked to support the enhancement of imaging in our country. 

We all know the benefits of it. Our colleague who has undergone a long, 

rough road to be back in, I think, full health now just said a little earlier 

that he is most glad to be alive, and that imaging services were a part of 

that. So, you know, it is important to understand how this darn thing 

happened. 

 Now there are $2.8 billion in imaging cuts over five years, $8.1 

billion over 10. Imaging represents about one-tenth of Medicare 

spending, and yet the cuts comprise roughly one-third of the total 

Medicare cuts in the bill. Now, CMS is here and I think that you have 

probably got your marching orders from these conferees. 

 What I would like to know from you, Mr. Kuhn, is have you 

examined any kind of savings that have come about from imaging 

services? It doesn’t seem to me that it is prudent to be going at this with 

a meat axe, if, in fact, we all acknowledge how much a necessary part of 

the system imaging is and what it has produced for the American people. 

You know, on the one hand, Congress is celebrating it. On the other 

hand, they are saying cut the hell out of it. We have to be pragmatic 

about this. I don’t know what the conferees were thinking when they 

went to this. Maybe our Chairman today wants to explain it, because I 

think he voted for it. It is not what the House voted for. I didn’t vote for 

that bill, and it is not what the House voted for. This was jammed into 

the bill at the end of the process. 

 So have you done any kind of an analysis of what the savings are, 

relative to imaging in the country-- 
52

 MR. KUHN. We have not-- 

 MS. ESHOO. --and my other question is did you take into 

consideration the different costs relative to the setting of imaging? 

Hospital settings are always more expensive. They have greater 

overhead costs and a lot of other costs that are not attendant in a different 

setting. 

 So have you done that, and can you tell me about any kind of 

analysis that you have done relative to savings? 

 MR. KUHN. In terms of the savings and the offsets, the substitution 

of imaging for other procedures, I don’t think we have done a detailed 

analysis that you are talking about here. 

 MS. ESHOO. Have you done any analyses? 

 MR. KUHN. There are a number of studies out there and we have 

begun to look in terms of the growth rates in these areas and the site of 

service shifts, but we don’t have I think the level of detail that you are 

speaking to right now. 

 MS. ESHOO. Do you take into consideration, though, yes, there are 

growth rates, and I know in the healthcare system there is overutilization, but sometimes I think that is where the over-emphasis is. Is 

there any kind of analysis that is done as to why there is the use that there 

is of the imaging? These are all advancements that we have made. Are 

we going to cut off the advancements because we don’t want to invest in 

them? It seems to me that part of this debate is being driven by that, and 

that is really, I think, a march to folly on the part of our national policy. 

 MR. KUHN. There is a lot of technology advancements that nobody 

wants to stop. In fact, I think the last thing anybody would want to do to 

see any public policy stop some of the wonderful advancements have 

been there. But I think to put this kind of in a larger context, there are 

some other issues that people need to look at. 

 One is the enormous growth in this area. It is clearly there and I 

think that is going to catch anybody’s eye when you see growth in a 

particular area like this, to be sure. 

 The second thing is the great variation that we are seeing. Glenn 

talked about some of the variation that they see. I recently looked at 

some numbers that talked about advance imaging, really the high-end 

computer assisted imaging, and I looked at four States. They were rural 

States, but they were Wyoming, Montana, and North and South Dakota. 

In Wyoming and Montana, the use of advanced imaging in those States 

was the high 50s, low 60 percent, but over in North and South Dakota, it 

was in the high 30 percent range. Great deal of variation in terms of use 

of these four neighboring States. What explains that, we don’t know, but 

certainly you saw some higher utilization in a couple of States that are 

out there. 
53

 But the other thing that is driving us, too, again in terms of the 

overall context that people need to be thinking about, too, this is a key 

driver that is moving the SGR number in ways that are creating situations 

where having to maximize the cuts-- 

 MS. ESHOO. I just want to interrupt for a second, because my time is 

just about up. Did CMS make this recommendation to conferees? 

 MR. KUHN. To my knowledge, this was not a recommendation 

coming from CMS. 

 MS. ESHOO. Thank you. 

 MR. DEAL. The gentlelady’s time has expired. 

 Mr. Pitts is recognized for questions. 

 MR. PITTS. Thank you, Mr. Chairman. 

 How does MedPAC or CMS quantify the value of imaging? That is, 

how is imaging’s cost-effectiveness valued? Is better treatment or a 

decreased need for surgery recognized? Many times, more than one 

imaging modality is necessary. For example, the immediate test for a 

stroke patient is a CT. It is fast, it is detailed. Once the patient is 

stabilized, MRI gives richer detail to make precise judgments about 

treatment. Do you evaluate volumes on a per patient basis, or do you 

count each encounter separately without describing the episode of 

services? 

 MR. KUHN. I believe under the particular program right now, we 

look at each individual’s services. I think under current authority we 

cannot look at cost effectiveness in terms of procedures that are out 

there. We look at reasonable and necessary and whether they meet 

current program coverage rules, but in terms of cost effectiveness, that is 

not an existing authority Medicare has. 

 MR. HACKBARTH. We accept as a given that improvements in 

imaging can lead to better care, better outcomes for some patients, and 

there are numerous examples of that. 

 The proposition that we have looked at is that given that, is more 

imaging necessarily better for patients? And with help from researchers 

from Dartmouth, we have looked at care for particular categories of 

Medicare patients and looked at whether more imaging correlates with 

better outcomes. We found that the answer is no, more imaging does not 

necessarily correlate with better outcomes. That is not to say that all of 

the imaging is bad. Much of it is good, but there can be too much of 

even a good thing. 

 It is because of that complexity and how difficult it is to get a handle 

on this that we have treaded, I think, very lightly in terms of our 

recommendations with regard to the rising cost of imaging. Rather than 

recommending across the board cuts in fees for imaging, what we have 

said is that you need to start looking at some very specific issues. Are 
54

we getting the prices right? Are we paying accurately for imaging 

services? We have recommended some coding edits to make sure that 

we don’t basically pay twice for some types of services. We have 

recommended feedback to physicians on a confidential basis so they can 

understand their patterns of imaging and compare to their peers. 

 These are a far cry from well, let us slash, rising costs are bad, let us 

just save money. We have suggested some very targeted steps precisely 

because this is a very delicate complex matter. 

 MR. PITTS. To follow up, has, for instance, the use of ultrasoundguided breast biopsies reduced the number of invasive procedures or 

surgeries? Have you looked at how specific imaging services improve 

patient outcomes? Has CMS looked into the role imaging can play in 

efforts to lower the cost to the system by improving outcomes? 

 MR. KUHN. We have begun looking at this issue overall, I think, in 

aggregate. I don’t think we have looked at this specific one, but yes, we 

are looking at those issues. 

 MR. PITTS. I am very concerned about potential impacts in 

reductions under the fee schedule. Have the consequences of imaging 

reimbursement reductions been examined? Has MedPAC or CMS 

contemplated the effect on beneficiaries? Is it possible that cuts will 

affect access, thereby contributing to late diagnoses leading to more 

invasive, intensive treatment? Is it possible that cuts will affect 

outcomes leading to poorer patient health or an increased number of 

unnecessary surgeries, or invasive procedures, leading to increased costs 

to the system? 

 MR. KUHN. When we put out a proposed rule, we will have impacts 

of a variety of natures in there for people to look at, and also we hope 

during that process we will be asking these kinds of questions so we can 

get the community at large to give us information to help us better 

understand the very questions that you are asking, Congressman. 

 MR. PITTS. Mr. Chairman, I have several other questions. I will just 

submit them in writing, if you can also respond to us within a couple of 

weeks. 

 Thank you. 

 MR. DEAL. Mr. Towns is recognized for questions. 

 MR. TOWNS. Thank you very much, Mr. Chairman. Let me also ask 

to place my statement in the record. I have an opening statement, but I 

was detained and was not able to be here. So I would like to ask 

permission to place that into the record. 

 MR. DEAL. I am sorry? 

 MR. TOWNS. I am seeking permission to put my opening statement 

in the record. 

 MR. DEAL. Without objection. 
55

 MR. TOWNS. Thank you. 

 Mr. Kuhn, what do you consider to be appropriate training for a 

physician to have in office diagnostic imaging services? 

 MR. KUHN. Right now under the Medicare law and rules, we defer 

to State licensure in terms of the appropriate training of determining 

what physicians can do within their scope of practice. So we don’t tread 

or get in the way of State licensure in that regard. 

 MR. TOWNS. Let me ask you this. Do you feel there should be some 

standards, national standards? 

 MR. KUHN. I think right now the way we work through the system 

in terms of deferring to State licensure is working pretty well for the 

Medicare program. I think the direction that we would like to see the 

program go is we have been working very hard the last couple of years 

on this issue of trying to develop better quality standards or quality 

measures for payment purposes, and it gives us a chance to work with the 

specialty societies and others to use their evidence-based guidelines to 

translate those into quality metrics, quality indicators that we can use for 

payment in the future. I think driving the program in that direction will 

help us achieve the better results that we are all talking about here, while 

at the same time not having to go out and set separate individual 

standards that might be in place that have been talked about. 

 MR. TOWNS. I think this question was raised a little earlier, but I 

would like to go at it a different way. 

 Do you think that a reduction in payments to hospitals to deliver 

diagnostic imaging services under the Deficit Reduction Act will result 

in a significant drop in the delivery of these services? 

 MR. KUHN. It is a good question, and I don’t think we know yet. 

That is why we hope when we put out our proposed rule we will have a 

greater and bigger opportunity to engage the stakeholder community to 

talk to us about those issues and get kind of a richer discussion about that 

issue through the notice and comment period. 

 MR. TOWNS. Because I feel that cuts might curtail access, and that 

bothers me because I think that is the last thing we need to do. 

 MR. KUHN. I couldn’t agree more, and I think what Congress was 

trying to do in the Deficit Reduction Act was two things. One, I think 

they really did want to improve the quality of services and care that is out 

there. They did not want to impede access whatsoever, but they really 

wanted to get their arms around some of this growth that is out there that 

is fueling problems with the SGR, it is fueling issues with the Part B 

premium, and driving to, I think, some unsustainable growth rates that 

everybody needs to look at. 

 So all those things that we need to take into consideration as we put 

out our proposed rule that will be coming out soon. 
56

 MR. TOWNS. You know, I think that the provision of imaging 

services should be viewed in the context of fundamental changes in 

healthcare. Imaging is transforming the way that disease, illness, or 

injury can be detected and treated, and of course, I believe that imaging 

use should not be discouraged without a thorough understanding of its 

impact on the access and delivery of medical care, particularly in 

medically underserved areas. 

 So I am concerned about this. I know we are trying to cut costs and 

all of that, but at the same time, I think that we really have to be careful 

in what we are doing here. 

 Let me just raise this issue. In the medically underserved areas, have 

we had an opportunity to check to see where there has been a change in 

delivery of service since we have been using and you know it has 

increased a great deal? 

 MR. KUHN. I don’t know whether CMS has looked in medically 

underserved areas in that issue or not. I could go back and check and we 

could get a response for the record, but I just don’t know the answer to 

that question right now. 

 MR. TOWNS. Okay, because I am concerned whether or not the 

access situation, which is very important when it comes to the overall 

evaluation in terms of healthcare. 

 MR. KUHN. Right. I think you raised the point, and I think it kind of 

swings both ways. One, you want to make sure there is sufficient 

payments, that it is stable and reliable so that you encourage access in 

these particular areas. At the same time, you want to make sure that if 

we go the routes that have been talked about of creating standards, you 

don’t want to create standards that are so problematic that providers 

won’t come to those areas. So trying to find that balance between those 

two is going to be an absolute key in this area, as well as all parts of 

Medicare. 

 MR. TOWNS. Right. I see my time is expired, Mr. Chairman. Thank 

you. I yield back. 

 MR. DEAL. I thank the gentleman. 

 Mr. Pickering is recognized for questions. 

 MR. PICKERING. Thank you, Mr. Chairman. 

 It seems today the discussion is primarily around reimbursement 

funding and the degree that access is either improved or reduced, based 

on reimbursement. But the other question is to a degree that standards 

address both issues, that we can have the assurance that imaging 

technologies and services are being used in an appropriate way. Then it 

gives us greater confidence that the reimbursement and the sustainability 

of reimbursements can be met. 
57

 And so my question for Mr. Hackbarth is that we have an example of 

a successful standard in the Mammography Quality Standards Act, and 

in fact, in your testimony you used that as an example. I have introduced 

legislation, the CURE Act, broad bipartisan support and I believe Senator 

Enzi on the Senate side has a similar piece of legislation. Have you had 

a chance to review or look at either of those bills? We have set the 

standards in education and credentials, and would that be consistent with 

what you are recommending that Congress do? And have you any other 

comments or suggestions as it relates to those two pieces of legislation as 

to what we can do to then address all of the issues in a comprehensive 

way? 

 MR. HACKBARTH. Certainly, the legislation is quite consistent with 

the general thrust of our recommendations. We agree that it is important 

that there be quality standards. My recollection of your legislation is that 

it focuses not on the physicians, at least in the first instance, but rather on 

the staff that actually run the equipment. Is that right? 

 MR. PICKERING. It doesn’t--whoever does the imaging, whether it is 

a technologist or the staff or the physician. It tries to take a neutral 

position, but to make sure that whoever is doing it is properly educated, 

has proper credentials, and does it in a proper way. 

 MR. HACKBARTH. Right, and so we agree on that. We think that 

there ought to be standards for both the physicians and the non-physician 

staff involved in the process. 

 Dr. Norwood raised the question earlier of who sets the standards, 

and what we have recommended is that Congress direct the Secretary of 

HHS to develop the standards and we think that the proper process for 

doing that would be to develop standards in close consultation with the 

relevant medical specialties societies, equipment manufacturers, and the 

like, people who have great expertise to bring to the table. So what we 

envision is not that people in HHS go off in a room by themselves and do 

this, but do it with people who have the relevant experience. 

 MR. PICKERING. Is that how the Mammography Quality Standards 

Act was done? 

 MR. HACKBARTH. That is my understanding of how it was done, 

yes. 

 MR. PICKERING. And that is an instance or example. We have had 

dramatic improvements in quality, reduction of errors-- 

 MR. HACKBARTH. Yes. 

 MR. PICKERING. --and there is a greater confidence that the services 

provided warrant the reimbursements. 

 MR. HACKBARTH. Yes. The GAO looked at the issue of the impact 

of the Act on quality for mammography services, and they found a 
58

significant decline in poor quality images and did not find a reduction in 

access to mammography services. 

 Again, I would emphasize that precisely because these services are 

so important and they are critical in making proper diagnoses and proper 

treatment that we have got to make sure that it is high quality work that 

is done. If poor quality imaging is done, then it can go off on the wrong 

path to the detriment of the patient, not to mention increase costs. 

 MR. PICKERING. So it would be fair to say that the Administration, 

as we look at reimbursement either reform or moratoriums, that the 

ability of Congress to pass legislation addressing standards in education 

and credentials, that you all would be supportive of those efforts and 

would want those to be combined, and to do it quickly before the end of 

this session? 

 MR. HACKBARTH. Well, as I said earlier, MedPAC has not looked at 

the DRA provisions regarding the rates for physician offices versus 

hospital outpatients, so we have no position on that, but certainly we 

would urge Congress to act quickly on legislation for quality standards. 

 MR. PICKERING. This year? 

 MR. HACKBARTH. As soon as possible. 

 MR. PICKERING. Thank you very much. 

 Mr. Chairman, I yield back. 

 MR. DEAL. Unabashed. 

 Dr. Burgess, you are recognized for questions. 

 MR. BURGESS. Thank you, Mr. Chairman. 

 I have got so many questions I want to ask, and I know, Mr. Kuhn, 

Dr. Norwood kind of already put you under a time deadline, so for the 2 

weeks after that, could I get some questions answered? 

 MR. KUHN. We will do our level best to do them concurrently. 

 MR. BURGESS. And Mr. Hackbarth, I would claim the first 2 weeks, 

then, that Dr. Norwood didn’t claim. 

 MR. HACKBARTH. He gave me some, too. 

 MR. BURGESS. Oh, he gave you--all right. 

 MR. HACKBARTH. We will shoot for 2 weeks also. 

 MR. BURGESS. I will extend the same courtesy, then, to MedPAC as 

I did to CMS. 

 The issues are complex, and I thank you both for acknowledging 

that. I really thank you for acknowledging what constraints we are under 

with the SGR and underscoring how important it is for us to address that 

fundamental flaw in the overall system. I hope, Mr. Chairman, we have 

a chance to do that. 

 Mr. Kuhn, in your testimony you note the rate of growth in different 

types of imaging. Do you have an opinion or do you have a sense of 

what proportion of that has been the growth in ultrasound? 
59

 MR. KUHN. I don’t know if I have the specific numbers on 

ultrasound there. We could go back and look at the claims date and see 

if we can dig it out by specific area. What we do is we lump these 

together into kind of four general areas that we talked about earlier, 

advanced imaging, standard imaging, et cetera, but we could find the 

ultrasound information if you would like us to look for that. 

 MR. BURGESS. I very much would like that. 

 Now, as CMS develops regulations to comply with the provisions of 

the Deficit Reduction Act, will the standard of care be a significant 

component in the decision-making process? 

 MR. KUHN. We will have all that kind of information, all that kind 

of discussion will be in the proposed rule, and we will look at all the 

issues related to the DRA and put that out for everybody to comment, 

along with the impacts as well. 

 MR. BURGESS. Now, several people brought up the issue of 

defensive medicine and how that may be a driver in the growth of 

increased cost in medical imaging. You said that you didn’t have that 

information. Is that because no one has looked for the information, or is 

the information somehow buried in all of the data that you have? Is that 

information that could be available to us, or would that require a new or 

separate study to be done? 

 MR. HACKBARTH. For MedPAC’s position, we have not specifically 

looked at and tried to quantify what piece of the total increase is 

attributable to defensive medicine. I know that there have been some 

academics-- 

 MR. BURGESS. How hard is it going to be for us to get that 

information, because I-- 

 MR. HACKBARTH. It would be very difficult for us, because you are 

trying to understand what is in a physician’s head when they are making 

a decision. 

 MR. BURGESS. Then if we can’t get hard data, then I will fight 

anecdote with anecdote. I would submit to you that you can go into any 

emergency room in this country on Friday night after 11:00 p.m. local 

and say you have got the worst headache in your life, and you have just 

bought a CAT scan. I don’t think you can get out of there without one. I 

would submit to you that anyone between the ages of 0 and 100 who 

walks into the emergency room that same Friday night after 11:00 p.m. 

and says I have pain in my abdomen is going to have a CAT scan to rule 

out appendicitis. The old days, we used to say that if a surgeon didn’t 

occasionally remove a normal appendix, he was probably sending ill 

people home. That maxim doesn’t fly anymore because everyone has the 

opportunity to have a CT diagnosis of their appendicitis. Dr. Norwood 

alluded to the problem with stroke diagnosis. At the risk of 
60

oversimplifying, and as you both know, strokes can either be 

hemorrhagic or thrombotic, that is caused by a bleed. Brain damage can 

be caused by a bleed or it can be caused by a blood clot, but you have got 

vastly different treatments for each contingency as unfortunately, the 

former prime minister of Israel has shown us. He came in with a 

thrombotic stroke one day, appropriately anti-coagulated, but when it 

extended it was a hemorrhagic stroke. More anticoagulant didn’t do him 

a bit of good, and it has left him in tough shape. 

 So these are aspects, I suspect, of this graph that you shared with us 

that we really need to know, because we are talking about where we 

come down with patient care on this. I lived through the same situation 

with my dad in 1989. He had a thrombotic stroke. In those days, we 

didn’t have clot-busting medications available. Had they been available, 

that would have been very useful information to have, but had it been a 

hemorrhagic stroke, the TPA or endosceptilicin or whatever was 

administered would have been extremely damaging. We have the ability 

for--unlike my dad, who in 1989 had his stroke and was unable to talk 

for the next 18 years of his life, we have the ability today to take that 

same individual, break up the clot, and minimize their damage. And it is 

incumbent upon us to do that. Yes, we are going to be overtreating some 

people in the last 2 weeks of their life. That is just part of the bargain, as 

the lawyer the other day talked to us and said we deal with the world of 

competing sorrows. Those are some of the sorrows that we are just 

going to have to compete with. But unfortunately, you guys have to help 

us with this, and if that help is with data, I urge you to make that data 

available to us. 

 Again, I have got about 15 questions that I will submit for the record. 

Some very good thoughts about the issue of needle aspiration on breast 

diagnosis. If that has led to an increase in imaging, that has led to a 

decrease in cost. Again, we need to know that at this committee level. 

 Thank you, Mr. Chairman. I yield back. 

 MR. DEAL. I thank the gentleman. 

 Mr. Ferguson is recognized for questions. 

 MR. FERGUSON. Thank you, Mr. Chairman. I would ask unanimous 

consent that Dr. Burgess have to speak English. 

 MR. DEAL. Without objection. 

 MR. FERGUSON. I was feeling a thrombotic stroke coming on there 

for a second as I was listening to the questioning, for those of us nonphysicians, particularly. You know, if you have a CAT scan I may need 

to take advantage of that. It does highlight the complexity of these 

issues, though. 

 First of all, thank you both for being here today. Mr. Kuhn, can you 

please explain the differences between the HOPPS based on APCs, and 
61

the Medicare physician fee schedule which relies on relative value units? 

Specifically, is the HOPPS designed to capture the cost of performing an 

individual medical imaging procedure, and is it not true that the HOPPS 

system generally sets payment for an individual APC based on a median 

value of all the procedures included within that single APC, whereas the 

Medicare physician fee schedule seeks to establish a value for each 

individual component of a specific medical procedure? 

 MR. KUHN. You are absolutely right. On the outpatient side, it does 

set a median in terms of the data that we get, actual reports of claims data 

from the hospitals versus the physicians side, which is based on a fee 

schedule, which is based on survey information that is collected by the 

physicians goes to the relative value update committee, the RUC, and 

they look at this information and give us kind of relative values for those 

which is, you know, calculated differently. 

 So one is a perspective payment system, the other is a fee schedule. 

They are very, very different methodologies for computing payment 

rates. 

 MR. FERGUSON. Then it would seem that there is some question as 

to the appropriateness of using an HOPPS to cap payments for individual 

procedures done in an office setting. Would you agree with that? 

 MR. KUHN. I think you raise a good point, but a couple of 

observations I would just make, but I think it is worth for everybody to 

understand in that regard. One is at least on the outpatient setting we are 

getting actual claims data, actual information that is out there in terms of 

what this stuff costs, or at least the charges reduced to cost through cost 

to charge ratios as we move forward in that regard. And so I think that is 

one point. 

 The second is that you have great variation, great delta between the 

two different payment rates, and so I think what Congress was trying to 

do here in the DRA was to try to get a site neutral payment. Let us get 

the same kind of payment rate regardless of where the payment might be. 

And so I think that, too, is something that is worthy of Congress looking 

at. 

 But I think the other point, and I shared this earlier, is at least on the 

physician’s side, we make an assumption that the equipment is used 50 

percent of the time. What MedPAC has found in their research is that 

that is no longer the case. It is there is much higher utilization for the 

equipment. Likewise, in terms of information we are hearing from 

facilities around the country, it is much higher utilization rate than 50 

percent. So basically the more you use it, the less it costs. And so it is 

not a direct linear line from 50 percent to, say, 75 percent or 80 percent, 

but when you have higher utilization rates, the two numbers in terms of 
62

outpatient and physician match up pretty closely in terms of payment 

rates. 

 MR. FERGUSON. Well, I would just--and I have a question for Mr. 

Hackbarth as well, but when you initially were touching on--your initial 

part of your answer saying that this is a serious question. I mean, there is 

clearly a utilization issue that we need to get our arms around. There is a 

delta in the cost in reimbursement, and for these two things. And my 

sense is just using these two different, kind of very different ways of 

addressing similar procedures is troubling and probably isn’t entirely 

appropriate. I am concerned with that and I hope we can further address 

that and continue to gather information from you. 

 Mr. Hackbarth, was what Congress included in the DRA package 

last year as it relates to the capping of payments for medical imaging 

procedures performed in the physician office setting, one of MedPAC’s 

recommendations on a possible way to address the growth of Medicare 

spending on medical imaging? 

 MR. HACKBARTH. No, we did not look at that. 

 MR. FERGUSON. Well, the policy that we included in the DRA, will 

this really reduce--in your estimation, will this really reduce utilization, 

or does it have the potential to shift procedures to a hospital setting to 

encourage those physicians who own their own medical imaging 

equipment to perform a greater number of these procedures to make up 

for the lower payments as a result of the policy that we included in the 

DRA? 

 MR. HACKBARTH. Mr. Ferguson, we really have not studied it, so I 

wouldn’t want to hazard a guess to its ultimate impact. As I said earlier, 

we have talked of a fairly conceptual level about a long-term goal for 

Medicare, which is to have the same payment rate regardless of site of 

service, and to try to set that payment rate at a level of an efficient 

provider of the service. 

 So at that very high conceptual level, I can understand where 

whoever came up with this DRA provision, what they were thinking 

about, but trying to operationalize that and translate that into real specific 

payment rates for a particular service is a difficult and important piece of 

work that MedPAC simply hasn’t gotten into, so we don’t have a stance 

on this particular provision. 

 MR. FERGUSON. My concern is clearly we were trying to address 

what we perceive to be as a problem, and I think many people 

acknowledge that there may well be a problem that needs to be 

addressed. My concern is that we may have slapped a solution on it or 

slapped a Band-Aid on this problem without really addressing the 

underlying issue, and we may, in fact, just be pushing the problem to a 
63

different part of the health system rather than really getting at the heart of 

the problem. That is the basis for my question. 

 Mr. Chairman, I am out of time and I have managed to not have my 

thrombotic stroke, so I appreciate very much and I yield back. 

 MR. DEAL. Gentlelady, Mrs. Cubin, is recognized for questions. 

 MRS. CUBIN. Thank you, Mr. Chairman. 

 Mr. Kuhn, according to the American College of Radiologists, the 

cuts in DRA attributed to Section 5102(b) is 44 percent of the overall 

savings in the Medicare portion of the conference report. Would you 

agree with that or would you disagree with that? 

 MR. KUHN. I don’t know if that is right number or not, but I think 

what everybody has kind of mentioned many times is that the imaging 

reductions were a large, significant part of the savings in order to deal 

with trying to make sure that physicians had a zero percent update for 

this year. That is correct. 

 MRS. CUBIN. Doesn’t that seem--assuming, you know, plus or 

minus five percent, doesn’t that seem like a disproportionate impact on 

one discipline, especially considering the imaging heavy physician 

services or practices? 

 MR. KUHN. A couple things. I think on its face when you look at it, 

it does look like a disproportionate number, but I think when you look at 

it in the larger context in terms of the growth rates we have seen in 

imaging over the last several years, how those growth rates have been 

contributing to the issues with the SGR in terms of hitting its maximum 

reduction that we impose with the statute and how that is also been 

contributing as a contributing factor to the increase in the Part B 

premium. I think when you take it in the larger context, I think it raises 

some good questions, but I think it also lets you see that there are needs 

for greater changes in the Medicare program if we are going to get our 

arms around growth in physician spending and deal with this Part B 

premium. 

 MRS. CUBIN. Well, I respectfully disagree with you because it seems 

to me that, just like Dr. Burgess referred to, a lot of money is saved from 

the increased practice of imaging. My son is in residency to be an 

interventional radiologist. I was lucky enough to sit in one day. A 53-

year-old woman came in with a stroke. She couldn’t talk, couldn’t move 

one side of her body. Well, I was able to watch while they went in her 

carotid artery, and I don’t know what they did with the clot in her brain, 

but an hour and a half later she was talking and moving her hand and her 

foot. Now, if they can’t use the diagnostic tools that they need to be able 

to perform miracles like that, then the cost really is more. So I simply 

just disagree with you. 
64

 Prior to the Deficit Reduction Act, why was Medicare historically 

opting to operate under different reimbursement systems in terms of 

hospital and non-hospital imaging? Once again, I question whether the 

imaging cuts in the DRA fully account for those differences, and 

specifically, because the hospitals have the ability to cost share over a 

large volume of services and obviously the smaller practitioner doesn’t. 

I fear very much that rural America and small cities, cities and towns like 

we have all over Wyoming, won’t even have opportunities for CAT 

scans and MRIs the way things are going because nobody is going to 

invest in those except the doctors that use them, and then they are 

penalized for that investment and what the bottom line is, the patient 

doesn’t get the care. 

 MR. KUHN. I think you are raising the question that many others on 

this panel have raised, and what we at CMS are going to struggle with as 

we move to implement this provision as we put out our proposed rule. 

How do we really do what Glenn has talked about earlier is make sure 

that we have efficient use of resources and we pay at the rate for the 

efficient provider, while at the same time making sure that we have 

uninterrupted access to care and that we have stability in the system so 

providers can count on it so they know they can make these investments 

and provide high quality care. It is a balancing act that we are all going 

to have to work through as we work through this provision, as well as 

others in the Medicare program. 

 MRS. CUBIN. Mr. Hackbarth, has there ever been a thorough 

assessment of how this reimbursement cut will impact Medicare 

beneficiaries and their access to care? 

 MR. HACKBARTH. Again, we have not looked at the impact of the 

DRA provision that would limit payment for imaging services in 

physician offices. 

 MRS. CUBIN. Well, it seems to me that access to care ought to be 

one of the most important considerations. 

 MR. KUHN. Access to care, for the Medicare program to work 

successfully, we have to have active, committed providers out there 

delivering care, and what they need is stability in terms of a payment 

system. They need predictability, and they need adequacy in terms of the 

payment, and we hope that as we work through this particular provision, 

work to implement it, we can do all those things. 

 MRS. CUBIN. I hope you can, too. Thank you. 

 MR. HACKBARTH. Just to mention one point about DRA. Almost all 

of the discussion about DRA is focused on the provision relating to 

limiting the payment for imaging services in physician offices. There is 

another provision in DRA related to imaging, and that is the one that 

reduces the payment for a second image using the same modality on a 
65

contiguous body part, a fairly technical issue. But I want to be clear for 

the record that that is a provision that MedPAC has recommended, 

although we haven’t looked at the other DRA provision. 

 MRS. CUBIN. Thank you. 

 MR. DEAL. If the gentlelady will allow me to share with her 

information that I have, the overall savings in the DRA under Medicare 

was $15.6 billion. Of that amount, $2.8 billion was in the imaging area. 

It encompasses both components that Mr. Hackbarth spoke about, and 

that is less than one-fifth of the overall savings in Medicare, and 

remembering this is an area that in the last 5 years had almost doubled in 

expenditures. 

 MRS. CUBIN. It sounds like there must be different things being 

considered for the American Radiologists Association to consider it a 44 

percent cut, so there must be different things being considered. We will 

have to look into that. 

 MR. DEAL. Perhaps we will have a chance to do that during the 

second panel that is coming up. 

 But before we do that, we have a member of the full committee who 

has appeared here, and I would make a unanimous consent request on his 

behalf that Mr. Inslee be allowed to ask questions. Any objections? If 

not, Mr. Inslee, you are recognized for questions. 

 MR. INSLEE. Thank you, Mr. Chairman. I appreciate your courtesy. 

 Gentlemen, I want to ask you about a concern I have about lumping 

all diagnostic imaging into sort of one box. Particularly, I want to ask 

about ultrasound imaging. Let us just take an example of ultrasoundguided biopsies, breast biopsies. We know that ultrasound-guided breast 

biopsies, while they take two ultrasounds to do, they can have a 

decreased risk of infection, they can have a better cosmetic result, they 

can avoid some of the trauma associated with an open biopsy. But they 

do result in two extra diagnostic imaging that are going to show up in a 

databank that you have been reviewing. 

 From both of your perspectives, would you believe that that 

technique is a worthwhile valuable thing that we should not in some way 

punish or discourage in any of our rulemaking? 

 MR. KUHN. No question about that. I think rather than an open 

biopsy, if you can have an ultrasound to evaluate a lesion, it is far 

superior to be able to do it that way, and it is one of the real advances 

that technology has given us for better outcomes and better detection. 

 MR. INSLEE. Mr. Hackbarth? 

 MR. HACKBARTH. I agree with that. I have had a family member 

benefit from the procedure. 

 MR. INSLEE. So I guess the question I have is, is at least in some of 

the proposals I have seen, this sort of lumps ultrasound in with all of the 
66

other diagnostic imaging techniques, and I just picked one, this 

ultrasound-guided biopsy, as one. There is a whole host--slew of 

ultrasound techniques. We will have a doctor talking about that later. 

Ultrasound guidance, central venous catheterization, that can have 

tremendously improved results. Ultrasound-guided aspiration of thyroid 

nodules, we have this whole host of techniques that will decrease trauma 

and decrease risk, and Mr. Hackbarth, you want to say something? 

 MR. HACKBARTH. I want to emphasize that within the category of 

ultrasound or almost any other--in fact, any other category of imaging 

that you can talk about, there are very important, very valuable 

procedures that help patients. I don’t think anybody disputes that. 

 Having said that, there is research that we and others have done that 

shows that even with good things, more is not necessarily better. That is 

what makes this area so difficult. We are trying to, in a general category 

of good stuff, identify some problems, and there are problems. 

 MR. INSLEE. Right. And in doing so, wouldn’t it make sense, given 

the distinct nature and attributes of these various diagnostic imaging 

techniques, to treat each one separately? If we treat them all the same, at 

least as I understand some of the proposals that are floating around here, 

they would all be treated the same. I am focusing on ultrasound imaging 

particularly. The center of some of the geniuses in the country happen to 

be in my district, so it is one of the reasons I am particularly interested in 

it, but I am sure there are others that have similar benefits. 

 Doesn’t it make sense to treat--and I will just start with ultrasound--

doesn’t it make sense to treat ultrasound diagnostic imaging differently, 

designing rules that would be fitting to its benefits, to its advantages, 

both fiscally and physically? Wouldn’t that make sense? 

 MR. KUHN. Absolutely. Within the Medicare program, to the extent 

that we can price and pay procedures as close to their actual costs, as 

Glenn indicated earlier, for efficiently delivered services, that is the 

ultimate goal for all of us. It is what we want to achieve here with this 

program. I couldn’t agree with you more. 

 MR. INSLEE. So if you do agree with me, where does that lead? Are 

we going to go back and start to revise some of these proposals to-- 

 MR. KUHN. I mean, obviously part of it is a staging process. I mean, 

how do you get to that kind of stage? Obviously, within the DRA 

provision what Congress was trying to do is put together here kind of a 

site neutral payment system. Why do we have this delta, this 

differentiation between the hospital outpatient and the physician service 

in their office? And so sometimes you have to take graduated steps to 

get where you want to get to your ultimate objective, but I think the key 

is what you are saying is let us pay as accurately as we can for each 

service. In the Medicare program, sometimes they are staged. As we 
67

step forward, I think this particular provision in the DRA helps us kind of 

move forward in that staged process. 

 MR. INSLEE. As you do so, I hope you will pay particular attention 

to number one, the evidence suggests that ultrasound is growing at a 

slower rate, if at all, relative to other diagnostic imaging techniques, and 

that ultrasound just has these incredible advantages to the patient in 

reducing trauma, as well as being acutely sensitive. I hope you will think 

about that as you go forward. 

 MR. KUHN. Those are all good points, and hopefully those will be 

the kind of things that we capture when we put out our proposed rule and 

we really engage in the stakeholder community fully on these provisions. 

 MR. INSLEE. Thank you. 

 MR. DEAL. Mr. Green, do you have questions? 

 MR. GREEN. Yes, sir, Mr. Chairman. Thank you. 

 Mr. Kuhn, your testimony mentions that CMS currently assumes that 

imaging equipment is used 50 percent of the time, and your testimony 

also addresses MedPAC’s assertions that CMS assumptions for payment 

of imaging services is too high and that MedPAC believes that 

equipment should be utilized more often, which would bring the cost for 

utilization per utilization down. Can you explain how CMS arrived at 

the 50 percent assumption? 

 MR. KUHN. Yes. My understanding on the 50 percent assumption 

goes back nearly a decade now. It was in a proposed rule, in a proposed 

regulation where we kind of engaged the physician community overall to 

talk about this issue, and at the end of the comment period, that is the 

number we came out. I don’t think there was a lot of scientific 

information behind it, but I guess the best estimate at the time, best 

survey information people had at the time kind of pegged it at 50 percent. 

What we have seen, I think, over the past decade is a couple of things. 

One is a number of the groups that are doing this imaging activity in their 

offices and these independent facilities are coming in and sharing with us 

that their rates of utilization are exceeding 50 percent and much more 

aggressive. MedPAC, in terms of their comment letter to us last year on 

last year’s proposed rule, also indicated that their research indicated that 

it was higher than 50 percent. 

 So I think it is something we have to look at pretty seriously. 

 MR. GREEN. Mr. Chairman, I agree, and I hope any further hearings 

we have, see if we can get some better numbers, because again, analogies 

don’t make really good law. I know a lot of times in our major hospital 

facilities imaging equipment is used--I don’t know if 24 hours a day, but 

probably 20 or 18 hours a day, because of the times. I know I have been 

there in the evenings in some of our facilities in the Houston area, so that 

is when they set appointments. 
68

 MR. KUHN. Yeah, and what we are seeing is more extended hours, 

weekend hours, and a lot of it is for patient convenience. People can’t 

come in during the regular workday so they are going to come in the 

evening, so they are using this--I don’t think inappropriately, to term 

services, but to get maximum use and provide convenience for the 

patient. 

 MR. GREEN. Okay. 

 Mr. Hackbarth, to follow up on Congressman Norwood’s question 

about standards, we have also reported the intent on the Mammogram 

Quality Standards Act, and I am pleased that you referred to it as a 

potential model for imaging quality standards. What, if any, lessons 

have we learned from the Mammogram Quality Standards Act that we 

can use to implement effective imaging quality standards? 

 MR. HACKBARTH. Well, I think far and away the most important 

lesson is that it does work. It can work to improve the quality of service 

without having a severe detrimental effect on access. The standards can 

be developed in conjunction with professional societies. Again, I want to 

emphasize that that is the sort of process that we envision, engaging with 

the profession in what appropriate standards are, and that there ought to 

be different standards set for each of the various imaging modalities. So 

I think it is basically a success story. I am sure that as we were going 

through it, it wasn’t all smooth sailing, but we think it is a good model. 

 MR. GREEN. Okay. Mr. Hackbarth, between 2000 and 2003, nonradiologist physician imaging grew 12 percent. During the same time, 

radiologist imaging grew 10 percent annually. MedPAC has 

recommended strengthening rules that restrict physician investment in 

imaging centers to which they refer patients; however, these statistics on 

their face suggest that perhaps the entire field has been growing and not 

just the non-radiologist imaging. Do these statistics relay a problem with 

physician investing in imaging centers, because one would think that 

over-utilization would lead to much greater growth in non-radiologist 

imaging? 

 MR. HACKBARTH. Well, the work that we looked at as a foundation 

in the prior recommendation is work done by the GAO and Inspector 

General and some academic research that shows that when physicians 

have an ownership interest, they, in fact order more images. How big 

that increase is depends on the modality. For some, like MRI, the 

number of images was doubled when the physician had an ownership 

interest. 

 MR. GREEN. Okay. Thank you, Mr. Chairman. 

 MR. DEAL. I thank the gentleman. 
69

 Thank you both, gentlemen. You have been here with good 

testimony. We appreciate your presence. I guess Dr. Norwood and Dr. 

Burgess are going to hold you to those timetables. 

 MR. KUHN. I am sure they will. 

 MR. DEAL. I ask the second panel to take their seats. Lady and 

gentlemen, we appreciate your being patient and waiting for the 

completion of the first panel. We are pleased to have you here and I will 

introduce you at this time. I would remind you, as I did the first panel, 

your written testimony has already been made part of the record. We 

would ask that the 5 minutes that you are allotted be a summarization of 

that, or other testimony that you may want to add in light of the 

testimony of the first panel. 

 We are pleased to have Dr. Pamela S. Douglas, who is the Chief of 

the Division of Cardiovascular Medicine at Duke University Medical 

Center; Dr. Arl Van Moore, who is Chairman of the Board of 

Chancellors of the American College of Radiology; Dr. Doug Laube, 

who is the President of the American College of Obstetricians and 

Gynecologists; Mr. John Donahue, President and Chief Executive 

Officer of the National Imaging Associates, Incorporated; Mr. Lynn 

May, who is the Chief Executive Officer of the American Society of 

Radiologic Technologists. Dr. Griffeth, I skipped you. I am sorry. My 

list and the sequence there is not the same. Dr. Landis Griffeth, who is 

the Director of Nuclear Medicine at Baylor University Medical Center; 

Mr. Robert Baumgartner, who is the Chief Executive Officer of the 

Center for Diagnostic Imaging in Minneapolis, Minnesota; and Dr. 

Donald W. Rucker, who is Vice President and Chief Medical Officer of 

Siemens Medical Solutions, USA, Inc. Once again, we are pleased to 

have you here and Dr. Douglas, we will begin with you. 

STATEMENTS OF DR. PAMELA S. DOUGLAS, CHIEF, 

DIVISION OF CARDIOVASCULAR MEDICINE, DUKE 

UNIVERSITY MEDICAL CENTER; DR. ARL VAN MOORE, 

CHAIR, BOARD OF CHANCELLORS, AMERICAN 

COLLEGE OF RADIOLOGY; JOHN J. DONAHUE, 

PRESIDENT AND CHIEF EXECUTIVE OFFICER, 

NATIONAL IMAGING ASSOCIATES, INC.; DR. DOUG 

LAUBE, PRESIDENT, AMERICAN COLLEGE OF 

OBSTETRICIANS AND GYNECOLOGISTS; DR. LANDIS 

GRIFFETH, DIRECTOR, NUCLEAR MEDICINE, BAYLOR 

UNIVERSITY MEDICAL CENTER; LYNN F. MAY, CHIEF 

EXECUTIVE OFFICER, AMERICAN SOCIETY OF 

RADIOLOGIC TECHNOLOGISTS; ROBERT 

BAUMGARTNER, CHIEF EXECUTIVE OFFICER, CENTER 
70

FOR DIAGNOSTIC IMAGING; AND DR. DONALD W. 

RUCKER, VICE PRESIDENT AND CHIEF MEDICAL 

OFFICER, SIEMENS MEDICAL SOLUTIONS USA, INC. 

DR. DOUGLAS. I am delighted. Thank you, Chairman Deal. 

 MR. DEAL. Turn your microphone on and pull it where we can hear 

you. 

 DR. DOUGLAS. There, it is on. 

 Thank you, Chairman Deal. Members of the subcommittee, I am 

honored to testify before you today on behalf of the American College of 

Cardiology and the more than 20 healthcare organizations that comprise 

the Coalition for Patient-Centered Imaging. Together, we are united in 

the belief that office-based imaging is an integral component in the 

delivery of quality patient care, and should be protected as such. An 

extension of my remarks have been provided for the record, of course. 

 I am a Board-certified cardiologist and Chief of Cardiovascular 

Medicine at Duke University, but I am also the immediate past President 

of the American College of Cardiology, and the past President of the 

American Society of Echocardiography. 

 Today, patients, physicians, policymakers such as you, and payers 

are at a crossroads in debate over the provision of imaging services. The 

title of today’s hearing aptly reflects what I believe is at the core of this 

debate. Ensuring that medical imaging received by Medicare patients is 

clinically appropriate. This subcommittee will hear from others and has 

heard this morning about why reductions in payments for office-based 

imaging services contained in the Deficit Reduction Act are bad policy 

and could negatively affect patient care. We agree, and therefore 

appreciate the commitment of many on the subcommittee have already 

made to reexamine DRA imaging policy and imaging quality in general 

in a more thoughtful, deliberate manner. 

 We recognize that Congress is concerned about the growth of 

imaging volume, but caution must be exercised to ensure that policies are 

driven by what is best for patients and not solely by budgetary 

constraints. 

 In keeping with the theme of today’s hearing, I will focus my 

remarks on imaging appropriateness, which is an important component 

of imaging quality. Many physician specialties are using or developing 

tools, such as accreditation, training programs, guidelines, performance 

measures that foster quality in medical imaging. In my own specialty of 

cardiology, among groundbreaking quality efforts in imaging is the 

creation of novel appropriateness criteria, or diagnostic cardiovascular 

testing. The purpose of these is to address overuse, underuse, and misuse 
71

of imaging tests. These criteria are patient centric and ask the question 

whether the right test is used for the right patient at the right time. 

 Last fall, the ACC and the American Society of Nuclear Cardiology 

published the inaugural set of appropriateness criteria for cardiovascular 

and nuclear imaging. The rigorous process for building the criteria 

included convening a panel of clinical experts, half of whom were not 

cardiologists, who assessed the benefits and risks of the procedure for 

different indications or patient scenarios. Using a RAND UCLA scoring 

method, the criteria for each indication were considered and given a 

designation of appropriate, inappropriate, or uncertain, in other words, 

not enough data. Subsequently, several private payers have adopted 

these appropriateness criteria and the College has achieved some success 

in getting radiology benefit organizations to update their guidelines to 

include these criteria. We hope that others, including CMS, will also 

consider their use through pilot projects. Meanwhile, the ACC will 

closely monitor how its appropriateness criteria are utilized to ensure that 

they are not misused to deny or delay care to patients. 

 The College will release appropriateness criteria for cardiac MRI and 

CT this summer and for echocardiography early next year. Ultimately, 

appropriateness criteria will improve cardiovascular imaging quality, 

weed out inappropriate utilization, and facilitate reimbursement for 

appropriate utilization in a performance-based measurement system. 

 But appropriateness criteria is just part of the bigger imaging quality 

picture. The College and other cardiovascular health organizations have 

been leaders in the development of laboratory standards and 

accreditation, training program standards, clinical competency 

statements, and clinical practice guidelines that contain recommendations 

regarding the necessary knowledge and skills and policies and 

procedures. With these threads of quality all pulled together, they 

culminate in improved patient outcomes. 

 To this end, this year ACC, in partnership with my own university, 

Duke, convened a 2-day think tank on quality in cardiovascular imaging 

with over 80 stakeholder participants, from payers, industry, professional 

societies, and government. The think tank mapped out a multi-year 

quality agenda to develop and implement standards as part of an action 

plan for cardiovascular imaging in general and each imaging modality in 

particular. 

 Ensuring the quality and safety of medical imaging is being 

accomplished through costly and painstaking work by professional 

medical organizations. Some have called for the implementation of 

Federal standards for imaging services. I want to emphasize that many 

such standards, including accreditation, certification, and quality 

improvement tools, already exist and should not be put into place as cost 
72

containment mechanisms alone. It is important that the Federal 

government recognize specialty society efforts to ensure quality and 

safety, and not duplicate or override them by imposing non-specialty 

specific or overly burdensome requirements. 

 The Coalition for Patient-Centered Imaging and the American 

College of Cardiology are committed to working with Congress to 

responsibly address the growth in medical imaging. It is important that 

we all work together to ensure that Medicare beneficiaries are not denied 

access to appropriate imaging services that meet their healthcare needs, 

and that these are provided by quality physician specialists. 

 Thank you, and I look forward to answering any questions you have. 

 [The prepared statement of Dr. Pamela S. Douglas follows:] 

PREPARED STATEMENT OF DR. PAMELA S. DOUGLAS, CHIEF, DIVISION OF 

CARDIOVASCULAR MEDICINE, DUKE UNIVERSITY MEDICAL CENTER

Chairman Deal and Members of the Subcommittee, I am pleased to testify before 

you today on behalf of the American College of Cardiology (ACC) and the Coalition for 

Patient-Centered Imaging (CPCI), an alliance of more than 20 physician specialty groups 

and health care organizations united in the strong belief that office-based medical 

imaging is an integral component in the delivery of quality patient care. I am a boardcertified cardiologist and the Division Chief and Ursula Geller Professor of Research in 

Cardiovascular Diseases at Duke University Medical Center. I also serve as Director of 

Cardiovascular Research Strategy at Duke Clinical Research Institute. I am the 

immediate past president of the ACC and a past president of the American Society of 

Echocardiography (ASE). 

 I welcome the opportunity to offer the Coalition’s perspective on the importance of 

office-based imaging and commend the Subcommittee for holding this hearing. Medical 

technology has evolved to provide crucial support to skilled patient care. Advanced 

technologies unheard of a decade ago are now key tools in the prompt and efficient 

diagnosis and treatment of patients. 

 We believe that patients, physicians, policymakers and payers are at a crossroads in 

the political debate over the provision of imaging services. The title of today’s hearing 

aptly reflects what I believe is the core of this debate: Ensuring that medical imaging 

received by Medicare patients is in fact clinically appropriate. I expect that this 

Subcommittee will hear from others today about why reductions in payments for officebased imaging services contained in the Deficit Reduction Act (DRA) are bad policy and 

could negatively affect patient care. We agree with this assessment and appreciate the 

commitment many of you on this Subcommittee have already made to reexamine the 

DRA imaging policy in a more thoughtful manner, especially given the closed-door, 

eleventh-hour nature of this significant policy decision. 

 However, in keeping with the theme of today’s hearing, I want to focus on the 

quality assurance tools that my specialty of cardiology and other physician specialties 

currently use -- or are developing -- to guide physicians in the appropriate ordering and 

performance of imaging tests. We firmly believe that until there are benchmarks for 

measuring appropriateness that will allow for a better understanding of imaging 

utilization growth, draconian approaches such as the one taken under the DRA will not 

only persist, but eventually negatively affect patient care and have no affect on 

utilization. 
73

My testimony today will also highlight that imaging services, when provided by 

experienced and qualified physician specialists with training and experience, are 

important tools that vastly improve patient care. I also hope to provide a better context 

in which to view imaging growth. 

Office-Based Medical Imaging Constitutes Good Patient Care 

Advancements in medical imaging have changed the way cardiologists, urologists, 

orthopaedic surgeons, breast surgeons, obstetricians, neurologists, endocrinologists and 

other specialty physicians deliver patient care on a daily basis. Specialty physicians are 

uniquely qualified to provide imaging services specific to their specialty because they are 

trained in both diagnostic imaging techniques, and in the structure and function of the 

organs and systems they are imaging. By integrating medical technology into care plans, 

it offers the opportunity for earlier, better and more accurate diagnosis of disease or 

injury and the prospect of better quality care. 

Today in cardiology, we are fortunate to have a wide range of non-invasive imaging 

techniques to combat and treat disease. With the selective use of echocardiography, 

nuclear imaging, CT and MR we can evaluate the heart to answer specific clinical 

questions presented by patients. This allows physicians like me to define the functional 

adequacy of the heart to pump blood in heart failure patients, or for my colleagues to 

assess the significance of plaque within a vessel wall by viewing it in three dimensions. 

We can now visualize what in the past required subjecting a patient to an invasive 

procedure. The ability to view various aspects of the heart is important to providing cost 

effective and minimally invasive diagnosis and risk assessment. 

In addition to employing medical imaging for diagnostic purposes, physicians now 

use imaging to guide minimally invasive treatments and to track ongoing treatment 

protocols. 

Two examples are ultrasound-guided needle breast biopsies and image-guided 

biopsies of prostate lesions. In breast surgery, ultrasound-guided breast biopsies in the 

physician office can be performed at a third of the cost and in about half of the time of an 

open surgical biopsy. Ultrasound-guided breast biopsy allows for less-invasive 

evaluation of mammographic lesions, with more reliable tissue differentiation, more 

streamlined patient care and characterization, and improved staging of disease. Patient 

satisfaction is also increased with shorter recovery times and minimized scarring. In 

addition to the clinical and patient satisfaction benefits, The Lewin Group estimates that 

use of image-guided core breast biopsies instead of open biopsies saved the Medicare 

program $88 million between 2001 and 2003.1

Urology offers another example where advancements in medical imaging have led 

to less-invasive and less-painful procedures. Older men often experience difficulty 

urinating because of prostate enlargement. To evaluate this problem, physicians must 

learn how much urine is retained in the bladder after voiding, known as “residual urine.” 

For many years this was determined by passing a catheter through the urethra and into the 

bladder, the amount of urine drained from the bladder was then measured. Introducing a 

catheter into the bladder, in addition to being uncomfortable, also may introduce 

infection. Today, many urologists employ a small ultrasound machine designed 

specifically for this task. This test can be done in the urologist’s office and eliminates the 

use of a catheter and the danger of infection. 

The expectation of society, and of our patients, is that we will employ these marvels 

of medicine to achieve best practice outcomes for every care interlude. That means the 

integration of medical imaging as part of the treatment plan is here to stay. 

 

1

 “An Analysis of the Utilization of Ultrasound Imaging Services in the Medicare Program.” The 

Lewin Group. May 2005. 
74

Growth in Medical Imaging Utilization

There is no dispute that growth in medical imaging utilization is occurring. What is 

in dispute is how much of the growth is out of line with other Medicare Part B spending 

and whether increased utilization in imaging is creating cost savings elsewhere in the 

Medicare program. Last year the ACC commissioned a study by The Lewin Group to 

examine the growth in diagnostic imaging services.2

 Based on those study findings, we 

were and remain concerned that the Medicare Payment Advisory Commission (MedPAC) 

and the Centers for Medicare and Medicaid Services (CMS) continue to cite growth rates 

for imaging services without taking into account the shift in site of services out of 

hospitals and into physician offices. MedPAC, in its March 2005 report to Congress, 

acknowledged about 20 percent of the growth in imaging services paid under the 

physician fee schedule between 1999 and 2002 was due to this shift in site of services, 

but did not account for this shift in its growth comparisons.3

 Furthermore, MedPAC did 

not include all Medicare Part B services in its comparison of growth rates for imaging 

and other services. In particular, MedPAC omited durable medical equipment, 

chemotherapy drugs and other drugs covered under Part B, and ambulance services. 

Therefore, comparison in growth of imaging and the growth of other Medicare Part B 

services is distorted significantly. According to the The Lewin Group analysis, when all 

Part B services are included and the changes in the site of service are accounted for, 

imaging grew at an average annual rate of 11.2 percent from 1999-2004 compared with 

an average annual rate of 6.9 percent for all Part B services.4 The increase in imaging 

utilization has resulted in particular scrutiny of advanced imaging such as CT and MRI. 

The Lewin Study found that these technologies had a higher rate of growth from 2003-

2004, approximately 18 percent and 20 percent respectively, than other imaging 

technologies. The study also showed that radiology performed 84 percent of CT scans 

and 65 percent of MRIs.5

 

There are a number of reasons for the growth in imaging that are not adequately 

examined by MedPAC or CMS. The Coalition hopes that before further policy changes 

are considered, a more thorough analysis will occur as to the reasons behind the growth, 

including shift in site of service, clinical substitution, clinical appropriateness through the 

adherence to evidence-based scientific guidelines, advancements in technology, and 

demographic changes. 

When growth is distorted, or factors for growth are not fully factored into an 

analysis, it leads to inadequate and/or inappropriate policy responses. 

Responding to Medical Imaging Utilization Growth 

As I mentioned in my introduction, patients, physicians, private payers and the 

federal government are all caught in the middle of political debate over the growth and 

future of medical imaging. The DRA cuts enacted this year are just one example of 

several onerous responses to imaging utilization growth. Proposals set forth by MedPAC 

include setting federal standards for accreditation of facilities and certification of 

individuals. I will tell you today that these measures are not, and should not, be viewed 

as cost-containment mechanisms. They are tools to improve quality – a point I will 

elaborate on later in my testimony. 

Cuts in Medicare Reimbursement for Medical Imaging Services 

 

2

 “Issues in the Growth of Diagnostic Imaging Services: A Case Study of Cardiac Imaging,” The 

Lewin Group, May 3, 2005. 

3

 Report to Congress: Medicare Payment Policy, MedPAC, March 2005. 

4

 “Issues in the Growth of Diagnostic Imaging Services: A Case Study of Cardiac Imaging,” The 

Lewin Group, Report Addendum, June 20, 2005. 

5

 “Issues in the Growth of Diagnostic Imaging Services: A Case Study of Cardiac Imaging,” The 

Lewin Group, May 3, 2005. 
75

Earlier this year, as part of the DRA, Congress enacted a provision that cuts 

payments for many office-based imaging services. The law requires that Medicare 

payment for the equipment, supplies, non-physician personnel, and overhead associated 

with non-hospital imaging services (the technical component) be paid, effective Jan. 1, 

2007, at either the Hospital Outpatient Prospective Payment System (HOPPS) rate or the 

Medicare physician fee schedule amount, whichever is lower. This provision was 

included in neither the House nor the Senate deficit reduction bills, but emerged from 

conference committee and was enacted without ever having been subject to public 

comment or scrutiny. 

Not surprisingly, the DRA will result in draconian payment reductions for some 

imaging services in non-hospital settings. For many of those services, anticipated 

reductions as a result of the DRA are in the range of 35-55 percent. For example, 

Medicare payment for ultrasound guidance procedures performed as part of minimally 

invasive biopsies for the diagnosis of breast cancer would be reduced by 35 percent; 

Medicare payment for positron emission tomography (PET)/CT exams used to diagnose 

cancerous tumors and to determine the effectiveness of cancer treatment would be 

reduced upward of 50 percent; and payment for bone densitometry studies to diagnose 

osteoporosis (a recently added Medicare screening benefit) would be reduced by more 

than 40 percent. 

The Coalition is troubled by the precedent-setting nature of this provision. Nowhere 

else in Medicare are physician payments tied to hospital outpatient reimbursement. The 

methodologies used to determine payment rates for hospital and non-hospital imaging 

services are based on different data and different methodologies. Therefore, if the 

methodologies and data differ, why would Congress require that a methodology used to 

determine reimbursement in one setting be used to set reimbursement in a different 

setting for the same service? If Congress’ intent was to “level the playing field” for 

imaging reimbursement, payments for office-based imaging services that are lower than 

the hospital outpatient rates should be increased. What is clear is that the policy was built 

less on strong or sensible policy rationale and more on the need to create savings to offset 

other spending. While the physician community appreciates Congress’ intervention to 

stop a negative update in Medicare physician payments this year, the zero-sum politics of 

physician payment is unsustainable. 

The DRA medical imaging cuts cannot be considered in isolation. There are other 

policy changes that will or could negatively affect medical imaging reimbursement in 

2007. As part of the DRA, Congress imposed a multiple procedure discount to selected 

diagnostic imaging procedures. Eligible procedures were identified and grouped into 11 

“families” of related CPT imaging codes. For these procedures, Medicare will make full 

payment for the procedure with the highest payment rate and then apply a 50 percent 

reduction in the payments for second and subsequent imaging procedures in the same 

family that are performed during the same session. 

Most recently, CMS published a proposal to completely revamp the methodology 

used to determine the physician fee schedule technical component and other physician 

practice expenses. This proposal will affect imaging technical component services, but 

impact varies by services. 

While such payment reductions may result in short-term savings, there is no 

evidence that decreasing payment rates will reduce any inappropriate utilization. 

However, Medicare cuts such as those highlighted above, not to mention the pending 4.6 

percent across-the-board cut, are likely to result in reduced Medicare patient access, 

higher beneficiary co-payments, and lower quality due to the reduced availability of 

funds for imaging equipment maintenance, replacement, and upgrades. 

According to an online survey conducted May 24-June 21, 2006 by CPCI of more 

than 3,900 individual physicians, practice administrators, and health care professionals 

across the country, 40 percent of those who had planned to purchase or lease new 
76

imaging equipment in 2006 or 2007 delayed or canceled those plans largely due to the 

DRA cuts.6

 While this may sound like good news to payers, it provides no relief to 

Medicare patients who already endure long waits for imaging services. According to a 

study recently conducted by the Society for Vascular Ultrasound, on average, patients 

already wait 10 days to two weeks for non-urgent imaging services in the hospital 

outpatient department. If Medicare reimbursement for medical imaging services 

decreases in 2007, 47 percent of respondents said they will cut practice overhead by 

reducing personnel levels, compensation or fringe benefits; 46 percent say they will 

discontinue value-added but non-reimbursed patient services; 44 percent will freeze or 

delay hiring of clinical staff; 40 percent will delay the purchase or updating of electronic 

medical record software; and 39 percent will no long provide imaging services to 

Medicare beneficiaries. 

When asked where patients would go to receive imaging services if they were no 

longer provided in their office, the respondents replied that 83 percent would be sent to 

hospitals for those services. According to the American Hospital Association, the 

demand for hospital care, both outpatient and inpatient, is rising and half of emergency 

departments are “at” or “over” capacity.7

 If medical imaging becomes a fiscally 

unsustainable service for physician practices or if restrictive standards or regulations are 

imposed, patients will be forced into already over-crowded hospitals to receive imaging 

services. Medicare patients who must go to the hospital outpatient department to receive 

imaging services may not only endure significantly longer wait times, delayed diagnosis 

and treatment, but their co-payments will also jump from 20 percent in the physician 

office setting to up to 40 percent of charges in the hospital outpatient department setting. 

Federal Standards for Office-Based Imaging 

Some policymakers have called for the imposition of federal “standards” as a 

mechanism to increase quality and safety in the provision of imaging services. It is likely 

that under such a regulatory scheme, nationally-based imaging norms would be 

developed, implemented and administered by CMS and would apply to both the technical 

(e.g., equipment/overhead) and professional components (e.g., interpretation of the 

imaging) of imaging services. 

We do not oppose the use of criteria that foster and support better quality and safety 

of diagnostic imaging, but we caution against the federal government’s having a role in 

this realm. The federal government has not played a part in the credentialing and 

determination of privileges of physicians to provide medical services. Typically, the 

practice of medicine has been left to the states to govern. States most commonly rely on 

the expertise of medical professional organizations or boards to create standards, 

guidelines, or other criteria for their members. The development and imposition of 

federal standards on the practice of medicine would represent an enormous new role for 

Congress and CMS that could lead to the politicizing of medical privileging – physician 

organizations would incessantly “lobby” the federal government on medical scope of 

practice and other, similar matters, most appropriately left for the states to decide. 

To be candid, inherent in this discussion are “turf” issues as well as concerns about 

increased utilization and appropriateness of testing. Some, notably in the radiology 

community, have mounted criticisms based on quality of diagnostic services performed 

by non-radiologists. They seek to set standards that would effectively allow only 

radiologists to perform and interpret images and bill Medicare for their services, 

particularly in certain “advanced” modalities, such as CT, MR and PET. Yet, there is no 

 

6

 Coalition for Patient-Centered Imaging. Online survey of physicians, practice administrators, and 

health professionals conducted May 21-June 24. 

7

 “The State of America’s Hospitals – Taking the Pulse.” American Hospital Association. 2006 

AHA Survey of Hospital Leaders. 
77

credible evidence to demonstrate systematic quality problems in performance and 

interpretation of diagnostic medical imaging by specialists who are not also boardcertified radiologists. 

 Federal quality/certification regulations or thinly veiled attempts to protect “turf” 

will not lower utilization, but will merely redirect it. Nor do such regulations address the 

challenge of ensuring that the right test is provided by qualified personnel in the right 

setting, at the right time. Ensuring the quality and safety of medical imaging can only be 

accomplished through costly and painstaking work by the professional medical 

organizations who are meeting the challenge by developing training programs and 

requirements, appropriateness criteria, guidelines, and other quality-improvement tools 

such as performance measurements. Medical organizations are at different stages in their 

development of these types of tools. Nevertheless, it is appropriate that these efforts be 

specialty and modality specific and have significant input from the respective specialty 

organization(s). 

Ensuring Appropriate Use of Medical Imaging Tests 

The ACC, the American College of Surgeons (ACS), the American Academy of 

Orthopaedic Surgeons, the American Association of Clinical Endocrinologists, and other 

specialties are making strides in developing and using tools including accreditation and 

training programs, guidelines, and performance measures, that will facilitate the delivery 

of quality and appropriate imaging services. For instance, large multi-specialty medical 

groups utilize practice guidelines – whether related to chronic diseases like diabetes or 

imaging services. Requiring these large providers to adopt a national, one-size-fits-all 

standard that overrides carefully considered care management processes within the group 

setting makes little policy sense. 

American College of Cardiology 

Cardiology is a leader within the imaging community in the development of qualityimprovement tools, largely because of the dependence upon imaging in the provision of 

cardiac care. Among the ACC’s quality efforts is creation of groundbreaking 

appropriateness criteria for diagnostic tests. The purpose of appropriateness criteria is to 

address overuse, under use, and misuse of imaging tests. These directives are patientcentric and define “when to do” and “how often to do” a given procedure in the context 

of scientific evidence, the health care environment, the patient’s profile and the 

physician’s judgment. 

In October 2005, the ACC and the American Society of Nuclear Cardiology 

(ASNC) published its inaugural set of appropriateness criteria for Single Photon 

Emission Computed Tomography Myocardial Perfusion Imaging (SPECT MPI), 

commonly known as cardiovascular nuclear imaging. To build the criteria, a 

representative panel of clinical experts met to assess the benefits and risks of the 

procedure for different indications, or patient scenarios. The panel used the 

RAND/UCLA appropriateness method to score each indication, assigning scores within a 

range of one to nine. Using these scores, the panel identified for each indication whether 

SPECT-MPI was appropriate, inappropriate or possibly appropriate requiring more 

patient-specific information. This process and methodology is being used by the ACC to 

develop appropriateness criteria for cardiac MR and CT and echocardiography, scheduled 

for release this summer and early 2007, respectively. 

Not only do appropriateness criteria promote safe and cost-effective cardiovascular 

care, these criteria also can help ensure the delivery of more equitable health care among 

all demographic profiles, minimizing documented disparities. Several third-party 

payers have adopted the SPECT-MPI appropriateness criteria for diagnostic imaging and 

the ACC has achieved some success in getting radiology benefit management 

organizations to update their guidelines to include the SPECT-MPI appropriateness 
78

criteria. The ACC is closely monitoring how the appropriateness criteria are utilized to 

ensure that they are not misused. 

To facilitate the adoption of its appropriateness criteria, the ACC is working with the 

Oklahoma Foundation for Medical Quality, the OK Quality Improvement Organization 

(QIO), to develop a project proposal based on a recently issued CMS QIO RFP titled 

“Developing a Framework for Improving Outcomes via Curtailing Harmful OverUtilization for Chronically Ill Beneficiaries.” The proposed project would focus on 

appropriate utilization of SPECT MPI for cardiovascular patients using the ACC/ASNC 

SPECT MPI appropriateness criteria. Among the objectives are establishing regional 

variations in annual volume and growth rates for SPECT MPI, as well as the potential 

impact of a prospective ordering sheet to foster quality improvement and benchmarking 

based on the appropriateness criteria. 

Already physicians are using the SPECT MPI criteria, allowing them to compare 

their practice patterns with those of their peers. Ultimately, appropriateness criteria will 

weed out inappropriate utilization, improve imaging quality and facilitate reimbursement 

in a performance measurement-based system. 

Quality in cardiovascular imaging will require us to adopt new processes for quality 

improvement. A thorough and thoughtful process must be put in place for measuring 

quality that begins before the patient even walks through the door. Early this year, the 

ACC, in partnership with the Duke University Medical Center, convened a two-day 

Think Tank on Quality in Cardiovascular Imaging with 80 stakeholders representing 

imaging professional societies, academics, quality experts, CMS, FDA, private payers, 

equipment manufacturers and pharmaceutical companies. The think tank mapped out a 

multi-year quality agenda to develop and implement standards as part of an action plan 

for each imaging modality. These plans include development of patient selection criteria, 

as well as protocols for measuring the quality of laboratories, image acquisition, image 

interpretation, communication of results, and improved patient outcomes. The summit 

proceedings represent a consensus of the leadership of the ACC, American College of 

Radiology and a host of cardiovascular specialty organizations and will be published in 

the Journal of the American College of Cardiology later this year. 

American College of Surgeons 

To ensure that surgeons who use ultrasound are qualified and that the ultrasound 

facilities and equipment they use are appropriate for the medical application and meet 

and maintain quality standards, a thorough verification program was developed by the 

ACS for surgeons and surgical residents. The program provides a formal means of 

education verification to assist in credentialing. Through didactic instruction, practical 

demonstration, and hands-on sessions, the ACS “Voluntary Verification Program for 

Surgeons in the Use of Ultrasound” provides advanced knowledge of clinical applications 

tailored to specific types of surgical clinical practice, including acute/trauma, vascular, 

breast, abdominal, intraoperative/laproscopic, and head/neck. 

The ACS has also developed the “Stereotactic Breast Biopsy Accreditation 

Program” to ensure that only qualified personnel perform stereotactic breast biopsies for 

the diagnosis and treatment of breast cancer and appropriate equipment is used to ensure 

that women receive optimum tissue sampling with the lowest possible risk. The program 

offers physicians the opportunity for peer review and comprehensive evaluation of their 

facility's staff qualifications, equipment, quality control and quality assurance programs, 

image quality, and breast dose. Those facilities successfully meeting all of the criteria are 

given a three-year accreditation and the American Cancer Society, the National Alliance 

of Breast Cancer Organizations, National Cancer Institute, Y-ME and other patient 

referral organizations are provided with an updated list of accredited facilities. 
79

The American Academy of Orthopaedic Surgeons 

The American Academy of Orthopaedic Surgeons (AAOS) has established quality 

guidelines to enhance orthopaedic surgeons’ diagnosis and treatment of various 

musculoskeletal conditions. Workgroups consisting of members of AAOS and 

Orthopaedic Specialty Societies, with scientific and clinical expertise, were organized to 

create the guidelines. Workgroup members attended workshops to learn how to develop, 

evaluate, and revise evidence-based guidelines. They created “decision trees” or 

algorithms for treating knee and shoulder pain, common orthopaedic conditions. In each 

algorithm, suggestions for the most effective and efficient imaging options, based on the 

patient problem, standards of care, and the advantages and disadvantages for using each 

imaging modality help orthopaedic surgeons make an accurate diagnosis and treatment 

plan. Additional guidelines are under development to ensure appropriate patient care, 

including the appropriate use of imaging technology, for all orthopaedic conditions. 

In addition, more than half of all orthopeadic surgeons have a formal rotation in 

radiology during training. Orthopaedic surgeons cannot become board certified 

physicians without passing an exam of which half of all questions on part one and all of 

the questions on part two require the interpretation of an image. 

American Association of Clinical Endocrinologists 

The American Association of Clinical Endocrinologists (AACE) and the American 

College of Endocrinology (ACE) have long recognized the need for specialized education 

and training to verify knowledge, skills, and capabilities in endocrine imaging services. 

Since 1998, the AACE and ACE have sponsored the Thyroid Ultrasound and FNA 

Biopsy Accreditation Course®. Physicians who successfully complete this course have 

the indications and limitations of thyroid ultrasound and how it integrates with other 

thyroid tests to improve the diagnosis and management of thyroid disease. Physicians 

successfully completing this course and examination receive a certificate of accreditation 

for Thyroid Ultrasound & Ultrasound Guided FNA Biopsy. Ultrasound is an example 

where a highly skilled endocrinologist or other qualified physician can utilize real time 

ultrasonography to optimize and facilitate excellence in patient care, procedures and 

outcomes. 

AACE and ACE also sponsor Endocrine University®. Endocrine University® 

provides specially designed curriculum and programming to help prepare endocrine 

fellows for entering clinical practice. Endocrine University® is held once a year and is 

open only to final year fellows-in-training in endocrinology. The course is held at the 

Mayo Clinic in Rochester, Minn., and provides fellows with an intensive six-day 

curriculum which covers thyroid ultrasound accreditation, bone densitometry 

accreditation, Metabolic Laboratory CLIA certification, practice management topics, and 

insulin management. 

It is important that the federal government recognize and not duplicate or override 

specialty society efforts to ensure quality and safety by imposing non-specialty specific 

requirements. There are already a number of specialty-specific programs designed to 

improve imaging quality, as well as state laws and regulations in place that stipulate 

equipment quality controls and technologist training requirements. Specialty society 

efforts should be encouraged and quality related initiatives for diagnostic imaging should 

be considered by Congress in the context of broader pay-for-performance concepts. 

June 2006 Medicare Payment Advisory Commission Recommendations 

As Congress considers policy proposals that relate to medical imaging, we hope that 

you will consider what further cuts in medical imaging services will do to qualityimprovement efforts. The passage of the DRA imaging cuts sent a message to the 

physician community that Congress cares more about ratcheting down costs than 
80

improving quality. Continued cuts of this nature will have an absolute stifling effect on 

quality improvement efforts by the physician specialty community. 

The Coalition is concerned with a recommendation in MedPAC’s June 2006 Report 

to Congress that CMS adjust the equipment utilization assumption used in physician 

practice expense payment calculations upward from 50 percent. Such an adjustment 

could severely affect payments for office-based imaging services at a time when imaging 

is already poised for reimbursement cuts. MedPAC’s recommendation, that would be 

applicable to all imaging services, was based predominately on a study of MRI and CT 

utilization. We hope that the Committee understands that the ultrasound equipment use 

rate is likely to be different from the utilization rate of an MRI machine because of the 

practice patterns of the specialties that use each type of imaging modality. For example, 

ultrasound services are one element of the clinical care provided by many specialties and, 

as such, are used as an adjunct to the practice of many physicians whose primary 

occupation is direct patient care – i.e. surgical procedures and office visits. MRI and CT, 

on the other hand, are more often used in a radiology practice setting as the only type of 

care provided, and thus are less likely to be idle during business hours. 

We request caution on the part of Congress and CMS and ask that MedPAC be 

directed to expand its survey to collect data using a large, broad-based sample which 

includes different equipment types across all sites of service, distinguishing by specialty 

before changes in equipment utilization rates can be considered for equipment in nonhospital sites of service. Because of the limitations of the MedPAC study, it would only 

be prudent at the present time for MedPAC or CMS to propose adjustments in utilization 

assumptions for free-standing imaging facilities that have billed Medicare for CT and 

MRI services. 

Also in MedPAC’s June 2006 report, it concluded that the assumption of 11 percent 

in calculating the cost of capital for medical equipment purchases is too high. MedPAC 

arrived at this conclusion based upon a review of Federal Reserve Board information on 

commercial loans, but with the admission that a more specific source of data on the 

subject had not been located. The Coalition disagrees with this conclusion and believes 

that if MedPAC staff were to survey financing companies that lend money for medical 

equipment purchases, their conclusion may be different. 

The Coalition was able to obtain information from Key Equipment Financing 

regarding the current and expected future cost of capital. KeyCorp, the parent company 

for Key Equipment Financing, is one of the nation’s largest bank-based financial services 

company. For more than 20 years, Key Equipment Finance has been providing financing 

to health care providers including medical doctors, clinics, group practices and hospitals. 

The information from Key Equipment Financing indicates that rates for long-term 

leases/purchases for imaging equipment have ranged from 8-10 percent over the last few 

years, but that these rates are abnormal and have been the result of historically low prime 

rates. However, with the recent actions by the Federal Reserve to raise the base interest 

rates that banks pay to borrow money, the interest being charged today on new long-term 

leases is expected to be between 9-11 percent, depending on the amount of money 

borrowed. 

We believe that this information validates that CMS’ estimate for the cost of capital 

continues to be a correct assumption and is not in need of adjustment. Therefore, we 

recommend the Subcommittee direct MedPAC to investigate the issue more fully, 

directly surveying medical equipment financing companies before they or CMS move 

forward with recommending any changes to this aspect of the formula for calculating 

practice expense payments for equipment under the Medicare physician’s fee schedule. 

Conclusion 

The organizations that comprise the Coalition for Patient-Centered Imaging are 

committed to working with Congress to responsibly address the growth in medical 
81

imaging. It is important that we all work together to ensure that Medicare beneficiaries 

are not denied access to appropriate imaging services provided by qualified physician 

specialists. Thank you for the opportunity to present our views. I look forward to 

answering any questions you may have. 

 MR. DEAL. Thank you. Dr. Moore. 

DR. VAN MOORE. Thank you, Chairman Deal, for the kind 

introduction. I thank Congresswoman Myrick for the introduction as 

well. 

 I thank you, Chairman Deal and the subcommittee members, for 

recognizing the important role that medical imaging serves and quality 

care provide to Medicare beneficiaries. I particularly thank those 56 

Members of Congress, 15 of whom are on this subcommittee, for 

cosponsoring H.R. 5704 introduced by Congressman Pitts. The 

legislation calls for a 2-year delay in implementation of Deficit 

Reduction Act imaging cuts and a GAO study regarding their effect on 

patient care. 

 While ACR understands Congress’ need to make difficult budget 

decisions, Section 5102(b) of the DRA is troubling to the College. This 

policy requires CMS to reimburse the technical component of in-office 

imaging at the lower of the Medicare fee schedule rate, or the HOPPS 

rate, the hospital outpatient perspective payment system rate. The 

HOPPS was never intended to accurately reflect costs at the procedure 

level. For example, hospital reporting systems may not uniformly 

delineate capital equipment costs. ACR believes picking and choosing 

between payment systems based on whichever is cheaper both 

invalidates and corrupts both systems, not only for imaging services, but 

for all of medicine. Until a substantive review is completed, 

implementation of the DRA should be delayed, as proposed under 

Congressman Pitts’ bill. 

 Furthermore, the DRA policy does not address imaging utilization. 

Physicians who refer patients to their own equipment can take advantage 

of this policy and recover losses by ramping up volume, the exact 

opposite that the Congress intended. These cuts, when applied in tandem 

with ongoing CMS rulemaking reductions, may force physicians to limit 

the number of patients in the Medicare system that they accept. As a 

result, Medicare beneficiaries may be forced to endure increased wait 

times and increased travel times, particularly in rural areas. 

 The College has echoed many previous MedPAC recommendations 

for mandatory quality and safety standards for all imaging providers that 

will be determined by the Secretary of HHS. MedPAC called for all 

imaging providers, regardless of specialty, to meet Federal standards 

regarding physician training, equipment maintenance, and certification of 

non-physician staff. 
82

 Clearly, quality standards have government precedent. In 1992, 

Congress enacted the Mammography Quality Standards Act, or MQSA. 

This program sets standards for the facility, the technical staff, and 

physicians involved in mammography. It has unquestionably improved 

breast cancer diagnosis and has reduced the breast cancer death rate. 

Physicians have adapted to these MQSA standards. Technology clearly 

continues to advance, and more importantly, the level of care has greatly 

improved. Our patients, your constituents, have benefited. 

 Another example of Federal imaging standards is CMS regulation of 

independent diagnostic testing facilities, or IDTFs. CMS currently gives 

States the authority to regulate IDTFs. Some States are diligent in this 

overview; unfortunately, others are lax. ACR maintains that CMS 

currently has the authority to assert national quality and safety standards 

for all imaging providers, and expand their IDTF requirements to all 

settings. If this were done, uniform quality and safety standards usually 

associated with hospital and radiology practices will be required for all 

physicians performing imaging in the office setting. 

 To improve imaging quality and to reduce costs, many private 

insurers have implemented accreditation programs similar to those 

proposed by MedPAC and the ACR. Insurers recognize that 

accreditation is a key element in evaluating and maintaining quality and 

safety for their patients. Any one of these programs will one, improve 

the quality of imaging services for Medicare beneficiaries, and two, 

achieve the savings that the DRA was intended to capture. Given the 

likelihood that Medicare spending over the next 10 years on the highest 

cost modalities will approach $100 billion, deterring just 5 percent of 

projected spending would save Medicare $4 to $6 billion over the next 

decade. 

 Embracing the ideas that we have articulated will benefit patients 

and the healthcare system, which is our goal. And it will significantly 

reduce expenses, which is one of your goals. I urge this subcommittee, 

as well as the entire Congress, to enact H.R. 5704 and to implement 

sensible imaging reimbursement policies, such as those that I have 

discussed today. 

 On behalf of the more than 32,000 members of the ACR, thank you 

for your time and attention. I look forward to any questions you might 

have. 

 [The prepared statement of Dr. Arl Van Moore follows:] 

PREPARED STATEMENT OF DR. ARL VAN MOORE, CHAIR, BOARD OF CHANCELLORS,

AMERICAN COLLEGE OF RADIOLOGY

Chairman Deal and Distinguished Members of the Subcommittee, 
83

My name is Arl Van Moore, Jr., M.D. and I am the Chair of the Board of 

Chancellors for the American College of Radiology. I am a practicing radiologist from 

Charlotte, North Carolina. It is a pleasure and an honor to represent the more than 32,000 

members of the American College of Radiology before this distinguished body. 

The College is the nation’s largest radiology specialty organization representing 

diagnostic radiologists, radiation oncologists, interventional radiologists, nuclear 

medicine physicians and medical physicists. Our goal remains to advance evidencebased criteria to support the delivery of higher quality, safe, appropriate and costeffective diagnostic imaging services. Today, I will be discussing the imaging provisions 

contained in the Deficit Reduction Act of 2005 (DRA), their impact on providing 

imaging services to Medicare beneficiaries and the College’s recommendations for 

addressing the rapid growth in utilization of imaging services in Medicare through the 

establishment of quality and safety standards. 

I would like to thank Chairman Deal and the Members of the Subcommittee for 

holding this hearing and recognizing the important role medical imaging plays in the 

quality of care provided to Medicare beneficiaries. I especially want to thank those 

Members of the subcommittee who are already cosponsors of HR 5704, the Access to 

Medicare Imaging Act of 2006, introduced by Congressman Pitts. This legislation calls 

for a 2-year delay in the implementation of the DRA imaging provisions in order to allow 

for a GAO study to examine the potential effects on Medicare beneficiary access to the 

latest medical imaging technology and procedures. I believe these cosponsors’ 

participation underscores the importance of this issue and would encourage other 

Members of the subcommittee and full committee to become cosponsors. 

Furthermore, I would like to state that the ACR is proud to be a founding member of 

the Access to Medical Imaging Coalition (AMIC), a broad alliance of patient advocacy 

groups, medical manufacturers, and providers. As one of several AMIC members 

testifying today, ACR fully supports the enactment of 5704. 

 

DRA Concerns

The ACR continues to encourage and support the technological innovations and 

advances in diagnostic medical imaging, which have unequivocally improved the quality 

of patient care while producing cost savings through less invasive diagnostic techniques. 

As medical physicians who have devoted over 75 years to the study, and practice of the 

science and clinical application behind imaging technologies, the ACR and its members’ 

training, expertise and passion is focused on medical imaging. As a result, we have 

serious concerns regarding the affects that the severe reimbursement cuts contained in 

section 5102(b) of the DRA will have on the provision of imaging services to our 

Medicare patients. 

ACR fully understands Congress’ need to make difficult budgetary decisions to 

maintain the solvency of the Medicare trust funds and we have always been willing to 

work with Congress to develop reasonable policies to accomplish this mutual goal. 

However, the College has some serious concerns with the policy contained in section 

5102(b) which arbitrarily applies the hospital outpatient payment system and does little to 

neither address the issue of utilization nor improve the quality of the care provided to 

Medicare beneficiaries. Some examples of imaging procedures and the severity of their 

cuts include: 

• CT angiography to examine heart arteries - reduced by 50 percent; 

• PET/CT exams to pinpoint tumor location - reduced by 50 percent; 

• MRI of the brain which is used primarily to diagnose brain tumors - reduced by 

50 percent; 

• MRI of the abdomen which is used to diagnose abdominal and/or liver cancer - 

reduced by 48 percent; and 
84

• MR angiography of the head which is used to detect the location of aneurysms - 

reduced by 42 percent. 

The College finds it hard to believe that the Congress and Members of this 

subcommittee were aware that this policy would result in such dramatic cuts in the 

payment of such vitally important medical imaging procedures. In addition, 

reimbursement policies that pick and choose between payment systems based primarily 

on the budget savings available to be achieved without validating the accuracy of either 

system or examining the applicability of either system corrupts and invalidates both 

payment systems. 

ACR’s concerns with the DRA imaging provisions fall into two basic categories; the 

policy setting process of the Conference Committee of the DRA and the actual imaging 

reduction policy that was enacted. When a provision is offered to the Conferees which 

results in a $2.8 billion direct reduction in physician fees, one would hope that such a 

provision would be debated in committee, on the House or Senate floor or be the subject 

of a study by an outside federal agency as to the effects of such a policy. Regrettably, 

none of this oversight occurred with regard to section 5102(b). We think the results of 

this inaction during conference resulted in a policy that subjects and singles out a 

particular range of physician services to severe reimbursement reductions that are 

unfounded, and fails to address, in any way whatsoever, concerns Members of Congress 

may have about the appropriate and safe use of complex imaging tests on our Medicare 

beneficiaries. 

We understand the philosophy behind the intent of the Congress to pay equally for 

the same imaging service, regardless of the site of its delivery. However, the policy 

included in the DRA arbitrarily replaces the long established and validated Medicare 

Physician Fee Schedule payment system, with the non-validated Hospital Outpatient 

Prospective Payment System (HOPPS) for the Technical Component reimbursement. 

The Balanced Budget Act of 1997 (P.L. No. 105-33) called for the Secretary of HHS 

to develop the HOPPS methodology for hospital outpatient services. Outpatient services 

typically are performed at a hospital and include routine visits, emergency room visits, 

diagnostic medical imaging services, and surgical procedures not performed as part of an 

inpatient stay. The hospital outpatient payment system was never designed to accurately 

reimburse physician practice expense outside of the hospital setting and its applicability 

to the cost structure of non-hospital sites of service, such as a physician office or an 

imaging center, has never been examined. Moreover, HOPPS fails to adequately account 

for the capital-intensive nature of diagnostic medical imaging services provided for in an 

office setting, where there is often less volume of services. 

Unlike the Resource Based Relative Value System (RBRVS), which a prior 

Congress required to be based on specific procedure level resource costs in determination 

of reimbursement, the HOPPS was never intended to accurately reflect resource costs at 

the procedure level. The HOPPS classification methodology is a hospital case mixed 

index not intended to be a procedure level payment. This new Congressional proposed 

reimbursement scheme effectively removes physician input and the resource basis from 

the reimbursement system and negates the careful and rigorous work performed by the 

AMA Practice Expense Advisory Committee (PEAC) over the past six years. 

The convoluted methodology of the HOPPS, which has relatively minor physician 

input into the process, is ultimately based on what hospitals report as their ‘costs’ for the 

various outpatient procedures. This reporting system is notoriously inaccurate and is not 

systematically validated. Before Congress discards the MPFS methodology in favor of 

the HOPPS methodology it should be sure that the hospitals are showing all of their costs 

for outpatient imaging services, especially CT and MRI as some of these costs may be 

allocated to the Part A Medicare payments (DRGs). 
85

Rather than blindly believing that the MPFS over reimburses CT and MRI 

procedures performed in an office setting, you should have considered the more likely 

probability that hospitals are not showing all of their costs and, as such, that hospitals are 

under reimbursed. 

For example, much of the cost of providing these state of the art imaging services is 

in the cost of the equipment. The HOPPS methodology has no specific mechanism for 

capturing those costs and it is quite possible that hospitals are not reflecting equipment 

purchase costs in their reporting system. Implementation of the legislation transitioning 

the HOPPS payments to the Medicare Physician Fee Schedule must be delayed until this 

answer is known. Otherwise, Congress may unwittingly put many imaging centers out of 

business because it never bothered to understand that the new reimbursement level may 

not even cover the costs of providing many imaging services. Simply stated, the HOPPS 

system was never designed to account for the costs of in-office imaging and therefore 

cannot be expected to be an accurate measure of the costs associated with in-office 

imaging. 

 Furthermore, the imaging cuts in the bill represent nearly a third of overall 

reductions in the Medicare program that were contained in the DRA and do not address 

the utilization concerns of many in Congress. When taken in tandem with ongoing CMS 

rulemaking reductions such as CMS’s November 2005 final rule on contiguous body 

parts and CMS’s June 2006 proposed rule that discusses the 5 year review and revisions 

to the practice expense methodology, the combination of these policies cross the 

threshold of defensible public policy and become arbitrary and punitive reimbursement 

reductions. If these cuts are implemented in January 2007, many physicians may be 

forced to stop offering much needed imaging services or limit the number of Medicare 

patients they receive. It is possible that many rural areas of the country will be affected. 

As a result, Medicare beneficiaries may be forced to endure increased wait and travel 

times to receive imaging services and higher co-payments for certain studies performed 

in the outpatient setting. 

 Many ACR members, in response to this policy, have expressed their concerns that 

in the event these payment reductions go into effect that they will likely be forced to 

reduce their hours significantly, cut staff or close altogether since they cannot increase 

their volume by performing more examinations in order to offset these losses. In addition 

to the access problems that will inevitably occur, ACR is also concerned that these cuts 

may discourage research and development of new imaging technologies that are 

increasingly replacing more invasive (and more costly) techniques. I’m sure the NEMA 

representative testifying today can verify that many of our members are stopping orders 

for new equipment and/or updates for older equipment. 

 

Alternative Policies

Mr. Chairman, we recognize that of section 5102(b) of the DRA is intended to 

reduce the growth and the costs of medical imaging in Medicare. However, the DRA 

policy does nothing to address the growth in imaging services. Therefore, ACR and our 

colleagues in our Coalition, believe this issue requires a more thorough analysis, and not 

the sledge hammer reimbursement cuts enacted early this year. The two year moratorium 

contained in HR 5704 should give Congress ample time to accomplish a more thoughtful 

analysis of the potential unintended consequences that such severe payment cuts could 

portend. 

 To address the growing concern of policy makers in the public sector as well as with 

private payers who have worried about the tremendous growth in usage of PET scans, CT 

and MRI tests, the College has advocated for the last two years that utilization can be 

controlled through the development of quality and safety standards. We believe that 

Medicare should only pay for those complex imaging tests, CT, MRI and PET, if they are 

performed in a safe and controlled environment. We believe that any physician, 
86

regardless of their specialty, should meet minimum quality and training standards. We 

think the equipment must continue to be of the highest caliber, with continuous 

maintenance to monitor the numerous safety issues associated with these complex tests. 

Some may view this position as anti-competitive on the part of radiologists, but we view 

the requirement of quality and safety standards as providing the necessary assurance to 

patients and taxpayers alike, that these services are being carried out in the most 

appropriate manner. The complexity, cost, and possible radiation exposure often 

associated with many of these procedures require and demand special consideration of 

federal quality standards. 

 

The Mammography Quality Standards Act (MQSA)

The requirement of federal quality standards already has governmental precedent. In 

1992, Congress enacted the Mammography Quality Standards Act or MQSA. This 

congressionally established program sought to increase the quality of mammographic 

images by setting standards for the facility, technicians and physicians involved in the 

mammography process, thus improving breast cancer diagnosis and ultimately breast 

cancer survival. Since the establishment of MQSA, earlier detection of breast cancer 

through quality imaging has saved thousands of women’s lives. 

 ACR believes that if Congress thought it was important to ensure quality for the xray procedures involved in mammography, then it is logical that Congress would want to 

enact similar standards for other imaging procedures that are more complex, such as CT, 

in which the radiation dose is 200 times that of a conventional chest film. Clearly the 

Centers for Medicare and Medicaid Services (CMS) has begun to move in this direction 

as evidenced by its October 1, 2004 transmittal number 24 which incorporated into 

Medicare regulation a national coverage determination for PET scans that includes 

facility accreditation and demonstrated physician interpreter expertise as a requirement of 

coverage. Specifically, the CMS languages states “The FDG-PET scan is performed in a 

facility that has all the accreditation necessary to operate nuclear medicine equipment. 

The reading of the scan should be done by an expert in nuclear medicine, radiology, 

neurology, or psychiatry, with experience interpreting such scans in the presence of 

dementia.” 

While MQSA is not perfect, physicians have accepted these standards. Advances in 

technology continue, including recent findings that the latest digital mammography may 

be a particularly effective test for some high risk groups of women. Most importantly, 

the level of care has greatly improved and our patients, your constituents, have benefited 

from early detection, increased survival rates and reduced death rates. 

Medicare Payment Advisory Commission (MedPAC) Recommendations

In its June 2004 and March 2005 reports to Congress, MedPAC’s recommendations, 

which are not specialty specific, call for all diagnostic imaging providers to meet quality 

standards for imaging equipment, non-physician staff, images produced, patient safety 

protocols, and increased training for physicians who bill Medicare for interpreting 

diagnostic imaging procedures. As suggested by MedPAC in its March 2005 report, 

these standards would be determined by the Secretary of Health and Human Services 

(HHS) in consultation with physician specialty associations and nationally recognized 

accreditation organizations. Therefore, those physicians that are committed to obtaining 

the training, education, personnel and equipment necessary to meet these standards will 

continue to be able to provide services to their patients. The ACR urges the 

subcommittee to seriously consider and follow the advice of its advisory commission. 

According to data compiled for the ACR, Congressional implementation of the 

MedPAC recommendations, designed in part to stem the financial incentive associated 

with some of the growth in imaging utilization, could save the Medicare program a 

minimum of $4-6 billion over ten years (the analysis behind this cost savings has been 
87

previously provided to Committee staff). Given the likelihood that Medicare spending on 

the highest-cost modalities may approach $100 billion over the next ten years, deterring 

just 5 percent of projected spending would represent a substantial savings to Medicare. 

We believe that if quality of care standards were adopted, Medicare beneficiaries would 

receive fewer duplicative studies, with more accurate and better image quality of the 

range of tests available. 

Independent Diagnostic Testing Facilities

While much of the increase in imaging procedures is due to the growing value of 

imaging as an alternative to more invasive diagnostic techniques, there is continued 

concern about the proliferation of expensive imaging equipment outside the traditional 

setting of the hospital or radiology group practice. It is in these non traditional settings 

where uniform quality and safety standards, usually associated with hospital and 

radiology group practices, do not exist. 

The ACR feels that CMS currently has the authority to assert quality and safety 

standards to all settings where complex imaging testing is done if CMS were to expand 

their current Independent Diagnostic Testing Facility (IDTF) program to all settings 

where these tests are performed. Currently each state has authority to regulate how 

diagnostic imaging services are performed if such services are performed in an IDTF. 

Some states are diligent in this overview while others are more lax. 

In order to make these standards uniform for all states, the ACR feels that CMS 

should nationalize the IDTF standards, and insist that the provision of CT, PET or MRI 

exams, when performed in an office setting should meet the qualifications of, and register 

as an IDTF. CMS has this authority to expand the existing IDTF program and the ACR 

urges the Congress to seriously consider this avenue of policy making as a fairly direct 

way to address many of the concerns raised in this hearing. 

Private Insurers

Today, third party payers across the country are looking for ways to reign in 

imaging costs while ensuring that there is no negative impact on the quality of patient 

care. To improve image quality and reduce costs, some insurers are following 

accreditation models similar to those proposed by MedPAC and ACR. 

More and more payers recognize that accreditation programs are a key element in 

evaluating and maintaining the quality and safety of imaging for their patients. In recent 

years carriers in various markets across the country have mandated accreditation in 

complex imaging modalities such as MRI and CT for their providers. Until now the only 

national mandate was for MRI accreditation that was implemented in 2001 by Aetna. 

Recently, another national payer has indicated that they will require accreditation for all 

providers of MRI, CT, PET, Nuclear medicine, Nuclear Cardiology and 

Echocardiography beginning in late 2007. 

A list of some insurers and states utilizing ACR Accreditation is attached to this 

testimony and include Aetna, Blue Cross of California, Highmark Blue Cross of 

Pennsylvania, Blue Cross Blue Shield of Alabama, United Health Group of Wisconsin, 

Cigna of Connecticut and Oxford to name a few. 

Conclusion

The ACR represents those physicians who focus solely on medical imaging and 

have unrivaled expertise in radiological sciences, medical imaging techniques, radiation 

safety, radiation protection, dose delivery and image interpretation programs. We are 

committed to evidence based decision making in healthcare and dedicated to high quality, 

safe and effective patient care through all of its available resources. 

I would like to reiterate my appreciation for your interest and concern that Medicare 

beneficiaries continue to receive the life-saving technology found in diagnostic imaging 
88

services. We hope the subcommittee, as well as the entire Congress, will work to enact 

the provisions contained in HR 5704 so that we can implement an effective and sensible 

imaging reimbursement policy that will benefit our patients and the health care system 

overall. 

 I look forward to any questions you may have. 

 Thank you. 
89
90

 MR. DEAL. Thank you. 

 Mr. Donahue. 

MR. DONAHUE. Chairman Deal, Congressman Pallone, and 

members of the subcommittee, my name is John Donahue, and I am the 

President, the Founder, and the CEO of National Imaging Associates, 

and I am very honored and pleased to be before this committee today. 

 NIA is America’s largest radiology benefit management firm. Our 

clients include the Nation’s leading managed care organizations, such as 

WellPoint, Aetna, and Harvard Pilgrim. We cover 17 million Americans 

in 36 States across this country, including 300,000 Medicare Advantage 

enrollees and 1.2 million commercial Medicaid lives. 
91

 I would like to address three areas for you this afternoon. First, to 

describe radiology benefit management; secondly, to discuss the 

explosive growth in imaging costs; and thirdly, to propose some 

solutions. 

 Radiology benefit management involves applying evidence-based 

guidelines, nationally endorsed quality and safety standards, patient 

education and patient advocacy to ensure that a diagnostic imaging study 

is clinically appropriate, is safe, and is affordable. I strongly believe that 

radiology benefit management is sound policy. 

 The qualitative consensus shows that outpatient diagnostic imaging 

exceeds $100 billion and is growing at a rate in excess of 20 percent. We 

find almost axiomatically across many regions in this Nation that high 

tech imaging, MRI, CT, PET, and nuclear cardiology exams, often 

constitute 15 percent of imaging volume, over 50 percent of imaging 

costs, and a full three-quarters, 75 percent of diagnostic imaging 

technology inflation. 

 What is causing this explosion in imaging inflation and utilization? 

Well, members of the committee, I wish there were a straight, direct 

simple answer to this, but as we have heard today, it is very complex and 

multi-variate. It is, in fact, the perfect storm of healthcare quality, safety, 

and economic concern where you have innovative and therapeutically 

helpful new technology bombarding the marketplace, and that is a very 

good thing. However, there is often a lack of clinical consensus and a 

full understanding on the part of ordering physicians on how to apply this 

marvelous technology. There are malpractice concerns which encourage 

the defensive ordering of multiple diagnostic imaging exams, there are 

patients who are bombarded with direct-to-consumer imaging 

advertisements who often present in physician’s offices with strong 

biases as to what specific imaging exams they would like rendered. 

There is a proliferation of imaging capacity across this country, 

sometimes not driven by clinical appropriateness, but by entrepreneurial 

zeal, and finally, we have the vexing issue of self-referral. Our data 

indicates that some referring providers across this country who have 

access to equipment and will refer to themselves are often up to four 

times more likely to order an imaging procedure than those that order but 

don’t render the same exam. 

 [Slide] 

 As the first slide depicts--I am sorry, it is both the same slide. But as 

the first slide depicts, the quality, the safety, and the affordability of 

diagnostic imaging hinges, in my belief, on three distinct areas: the 

evaluation, the ordering, and the delivery of imaging care, as well as the 

payment of imaging care. My belief is that ordering, delivery, and 

payment must be addressed holistically. MedPAC and the DRA have 
92

admirably addressed some of the delivery and the payment issues 

through what we believe are highly justified pricing and billing solutions. 

My proposed solution today focuses on evaluating the ordering of 

imaging studies, which most predominantly drive volume and cost. 

 The appropriate ordering of imaging requires evidence-based 

support, which assures the clinical value of a given study. The most 

effective means to do this is through patient and physician education on 

the technology, coupled with convenient physician decision support to 

help use the technology. Our processes are based on clinical guidelines 

and radiology peer-to-peer delivered at the point of ordering. 

 Across this Nation, we are providing physicians with clinical 

decision support 300,000 times per month through 4-minute Web and 

telephonic encounters. NIA connects ordering physicians with Boardcertified radiologists while the patient is still in the office. This program 

adds value and we believe that it works. 

 [Slide] 

 As this slide indicates, in this particular Medicare Advantage plan, a 

25 percent annual growth rate was turned around to a 20 percent 

reduction in the first year of the program. Exploiting this to Medicare 

Advantage, traditional Medicare, and Medicaid indicates that this 

strategy could save our Nation billions of dollars in unwarranted 

diagnostic imaging. 

 In conclusion, we feel that radiology benefit management is a viable 

option available to Congress to address the explosive cost of high tech 

imaging. We feel we can facilitate the national goal of high quality care, 

patient safety, and affordable imaging. 

 We very much appreciate the opportunity to be before you, and 

would welcome any questions. Thank you. 

 [The prepared statement of John J. Donahue follows:] 

PREPARED STATEMENT OF JOHN J. DONAHUE, PRESIDENT AND CHIEF EXECUTIVE OFFICER,

NATIONAL IMAGING ASSOCIATES, INC. 

Chairman Deal, Ranking Member Brown, and Members of the Subcommittee, my 

name is John Donahue, and I am pleased to appear before you today to discuss the state 

of medical imaging in today's healthcare marketplace. As a fellow American, I am also 

deeply grateful to the commitment and contributions each of you Members have made to 

our Nation. I am the Founder, the President, and the Chief Executive Officer of National 

Imaging Associates, Inc. (NIA). NIA is the nation's largest radiology benefits 

management firm, covering nearly 17 million people through contracts with national and 

regional health plans. NIA is dedicated to improving the quality of patient care through 

clinically appropriate and cost-effective management of diagnostic imaging such as 

MRIs, CT and PET scans, and nuclear cardiology services. Robert LaGalia (who is with 

me today), Dr. Thomas Dehn and I , originally developed this company through a 

partnership with Quest Diagnostics. NIA became a separate entity in 1996, and is now a 

wholly owned subsidiary of Magellan Health Services. Headquartered in Avon, 
93

Connecticut, Magellan Health Services is the nation’s leading specialty health care 

management organization. 

NIA is the only radiology management organization to receive accreditation for our 

HIPAA privacy compliance program for all the Protected Health Information we receive 

in the course of our operations. NIA was also selected as an early adopter for the new 

URAC and JCAHO/NCQA Privacy Certification Program for Business Associates. 

URAC awarded NIA HIPAA Privacy Accreditation for Business Associates in August 

2003. Our Web based applications were also recognized by Computer World’s 

Smithsonian Award for Healthcare Innovation. 

Radiology benefits management involves evaluating diagnostic imaging to insure 

that services rendered are both clinically appropriate and cost effective. NIA currently 

partners with the nation's leading managed care organizations in 36 states to improve the 

quality and cost-efficiency of diagnostic imaging testing for health plan members and 

physicians. NIA’s clients include the nation’s leading managed care organizations, 

including Aetna and WellPoint, many other leading Blue Cross and Blue Shield Plans 

and regional leaders such as Harvard Pilgrim Health Care. In the government sector, we 

cover over 300,000 Medicare Advantage lives and over 1,200,000 Medicaid lives in 

multiple states. Given the scope of our role in our nation’s health care, I believe our 

perspective on advanced medical imaging and the management of imaging costs can be 

useful to the Subcommittee. 

The record on diagnostic imaging as one of the fastest growing cost areas in 

American health care, and the growth in advanced medical imaging as a major 

contributor to today's exploding Medicare spending, are both well documented. By most 

accounts, outpatient diagnostic imaging exceeds $100 billion and is growing at a rate in 

excess of 20 percent. It is interesting to note that we find almost axiomatically across the 

country, high tech imaging (MRI, CT, PET and nuclear cardiology exams), typically 

account for only roughly 15 percent of imaging volume, but over 50 percent of imaging 

cost (driven by their high relative fees) and over almost 80 percent of the inflationary 

impact. Most health plans, State authorities or Center for Medicare and Medicaid Service 

(CMS) will report to you that diagnostic imaging represents upwards of over 15 percent 

of the overall health care spend in our country. While we understand the consternation 

with the MedPAC recommendations, the CMS Physician Fee Schedule changes for 

multiple procedures and nuclear medicine services, and the imaging provisions in the 

Deficit Reduction Act of 2005 (DRA), we fully endorse the concept of clinically based, 

safe and affordable imaging as sound public policy, and we are encouraged that the 

Subcommittee has held this hearing today. 

I am often asked: What is causing this explosion in diagnostic imaging utilization, 

safety concern and financial stress on our health care system? There is no single simple 

answer. We are here today because a compendium of causal factors are forming The 

Perfect Storm, these dynamics include: 

 The constant flow of remarkably innovative and therapeutically helpful new 

imaging technology that is flooding the market place. To the extent this helps 

patients, it is very positive. 

 A lack of clinical consensus on the part of those who predominantly order 

diagnostic imaging. Well-intentioned primary care, family practice and 

internal medicine physicians, who endeavor to perform the best care for their 

patients but lack the time and acumen to master the nuances of every emerging 

technology, most often cast a wide, extraordinary costly and most often not 

clinically justified net of imaging prescriptions. 

 There is a reflexive professional instinct to cast a broad net of multiple 

diagnostic imaging exams to protect a doctor from financially devastating and 

often unjustified instances of physician malpractice. 
94

 And then there is the patient, who is bombarded with direct-to-consumer 

imaging advertisement, an enlightened sense of technological awareness, mixed 

with a smidgen of entitlement. He often requests specific imaging exams when 

thinking, “I twisted my knee this weekend playing hoops in the driveway, I 

want an MRI on a GE magnet just like my local sports star had last week.” 

Now, we turn to two of the most concerning issues this Committee will face: 

 There is a proliferation of imaging capacity driven by entrepreneurial zeal and 

resulting in imaging orders, which is encouraged by aggressive marketing. 

They are not clinically warranted and are driven by return in investment 

decisions by the owner. 

 World of self referral: We must find a solution to this gaping hole in the Stark 

legislation. A solution is necessary which affords patients access to highly 

skilled and convenient non-radiologist imaging care, while protecting our 

health care system from unsavory financially driven imaging utilization. 

I have a solution for you to consider for both of these points. I will describe how 

diagnostic imaging is delivered in America. At NIA we organize this into three distinct 

areas: (1) ordering of imaging care; (2) delivery of imaging care; and (3) payment of 

imaging care. 

Ordering, Delivery and Payment are the most quintessential elements of any 

capitalistic system whether it is widgets, or automobiles or diagnostic imaging. Scarcely 

anywhere is there more need in America for more governmental guidance on safety, 

clinical assurance and financial appropriateness than in the area of diagnostic imaging. It 

is also my firm belief that ordering, delivery and payment of imaging must be addressed 

holistically to achieve the goals of improved clinical care, patient safety and financial 

affordability. MedPAC and the DRA legislation have admirably addressed some of the 

delivery and payment issues – through highly justified pricing and billing solutions. 

 However, ordering of imaging tests, which predominantly drives volume and cost 

more than any factor has been, respectfully, somewhat under addressed. Let me zero in 

for a moment on the ordering of imaging care. Remember, while self-referral is a 

justifiable concern, the vast majority of imaging exams in this country are ordered by 

physicians who will not render or economically benefit from their generation. As 

mentioned previously, these are the physicians who are, in every state in this nation, 

bombarded with a flow of innovative but confusing and costly new technology or 

applications of existing technology, patient demand and an uneasy concern over applying 

justifiable conservative ordering in the face of rampant malpractice litigation. 

The appropriate ordering of imaging care requires evidence based support which 

tests clinical value. We find the most effective means to do this is through patient and 

physician education coupled with convenient physician decision support (founded in 

evidenced based medicine) at the point of ordering. Across this nation, we are providing 

physicians with clinically invaluable decision support (300,000 times per month) through 

4 minute web and telephonic interaction and connection with board certified radiologists, 

while the patient is in the office. This service enlightens physicians, protects patients 

from clinically unwarranted and unsafe procedures and saves our managed care partners 

hundreds of millions of dollars per year by eliminating wasteful imaging exams. I 

strongly encourage this subcommittee to examine this methodology because we think it 

provides a solution transferable to the public health insurance programs. As you will 

hear, we feel this enlightened approach can unlock tens of billions in clinically warranted 

economic savings for our country. 

NIA is confident that the empirical data demonstrates that clinically appropriate 

radiology benefits management is the responsible approach that offers the necessary cost 

reductions while ensuring the safety of the patients who require treatment. Our 
95

experience in radiology management has led us to three conclusions that I want to share 

with you. Congress should not shy away from a robust dialogue on the issue because: 

1. Roughly One-Third of Advanced Imaging Tests Are Inappropriate or Do 

Not Contribute to Health Outcomes. We have first-hand experiences and successes 

managing imaging benefits for Medicare Advantage plans. We have found about onethird of advanced imaging tests are either inappropriate or do not contribute to the 

physician's diagnosis or ultimate health outcomes. For example, such tests could possibly 

be performed more efficiently and economically, and achieve the same clinical/diagnostic 

goal, with traditional technology. Applied to the nation as a whole, this data strongly 

suggests that efficient radiology benefit management could cut America's radiology 

expenditures by $20 billion to $30 billion annually. 

2. There Are Inherent Risks In Radiation Exposure. There is no question that 

patient care is vastly improved when diagnostic imaging services are performed, but the 

inherent risks associated with radiation exposure should not be trivialized. The medical 

consequences that result when patients incur too much exposure to radiation may not be 

apparent to a physician when identifying what is in the best interest of the patient. This 

has the potential of trying to solve a problem by creating a brand new health risk to the 

patient. 

3. There is a Substantial Incidence of Self-Referral for Nuclear Medicine 

Services. In our experience, self-referral is a driver of escalating imaging costs, despite 

nuclear medicine's approval as designated health service under the Stark Act. Since 

imaging services can be performed in referring physicians' offices under an exception, 

growth in self-referrals will undoubtedly continue to proliferate with little or no 

exceptions, despite the change in CMS rules. Our data shows that 68 percent of the 

encounters of nuclear cardiologists who made referrals for nuclear cardiology services 

within a major health plan in 2003 were self-referrals. When the data is stratified 

another way, virtually all providers whose self-referral rates were classified as “high” 

were nuclear cardiology referrals (1,045 out of 1,050). This practice must stop. 

Taken together, the findings outlined above, and discussed in more detail below, 

suggest that the fiscal integrity of Medicare and Medicaid as well as the health and safety 

of beneficiaries are at risk with the explosive growth in imaging spending. We endorse 

the concept of cost controls and radiology benefits management and can demonstrate 

clinically appropriate and safe imaging management. 

1. Roughly One-Third of Advanced Imaging Tests Are Inappropriate or Do 

 Not Contribute to Health Outcomes. 

In our experience, about one third of advanced imaging tests are either inappropriate 

or do not contribute to the physician's diagnosis or ultimate health outcomes. We 

maintain the nation's largest clinical and financial database that includes over 150 million 

imaging encounters. Among a variety of uses, the data enables us to provide the 

industry's most advanced algorithms to enhance the quality and efficiency of radiology 

modality choices, while providing doctors and plan partners with important information 

on radiology ordering practices. 

NIA has drawn on its clinical and financial database from a sampling of preauthorizations submitted through major managed care organizations for the period of 

September 1, 2004 through August 31, 2005. The data from our sample show that 

almost one-third of all requests for imaging services involved multiple procedures using 

the same modality for related body parts during a single clinical session. Specifically, 

there were more than 330,000 requests in our sample, and, of these, nearly 110,000 

involved multiple procedures. In all, the data in our sample show a substantial incidence 

of requests for multiple procedures in a single session. 

In another instance, NIA turned nearly 25 percent annual growth in Medicare 

Advantage imaging claims into a reduction of nearly 20 percent in the first year. This 
96

swing of nearly 45 percent exceeded NIA's management of the plan's commercial 

imaging benefit. Furthermore, this reduction helped the plan realize a savings of nearly 

$6.50 in its per-member per-month Medicare Advantage imaging rate, four times the permember per-month savings realized on the non-Medicare side. 

2. There Are Inherent Risks In Radiation Exposure. 

As important as responsible cost management is, patient safety always comes first. 

We strive to help good doctors become better doctors. While patient care is vastly 

improved when diagnostic imaging services are performed, there are inherent risks 

associated with radiation exposure that should not be trivialized. We live in a society 

where an abundance of caution often supersedes what is an appropriate course of action. 

A doctor's assessment of the appropriateness of radiation exposure to a patient requires a 

subjective evaluation of the potential benefit to the patient in relation to the additional 

radiation risk resulting from the imaging test. 

The medical consequences that result when patients incur too much exposure to 

radiation may not be top-of-mind for a physician when identifying what is in the best 

interest of the patient, which has the potential to cause a brand new health risk. For 

example, a July 2005 National Academy of Sciences report underscored the fact that any

level of ionizing radiation may have carcinogenic effects1. NIA strives to mitigate 

overexposure to radiation by tracking patient dosages, through a combination of recent 

claim and pre-authorization data, and, through management techniques, preventing 

unnecessary and harmful exposure to clinically unnecessary and potentially dangerous 

radiation. 

Radiology benefits management can reduce the dangers caused by too much 

radiation from too many procedures. We work with our clients to focus on patient 

exposure to radiation and the need to balance the risks and benefits of those procedures 

through utilization management. 

3. There is a Substantial Incidence of Self-Referral for Nuclear Medicine 

 Services. 

Another driver of the cost boom is the ever-growing entrepreneurial physician 

network, comprised of doctors who have purchased imaging equipment and have a desire 

to see a return on their investment. Self-referral practices are emerging everywhere. 

Specialty and primary care practices are buying their own CT and MRI scanners, entering 

special lease agreements, and self-referring their patients while outsourcing the 

radiologists' interpretations. A May 3, 2005 article in the Wall Street Journal examined 

“increasingly common” arrangements in which physicians contract with medical imaging 

centers to “structure referral deals as leases, under which physicians, each time they send 

over a patient, are renting the scan center's facilities and employees.” Under the 

arrangements, the medical imaging centers charge physicians a flat rate per scan and 

physicians can bill health insurers for the scans at the reimbursement rate in their area. 

Information drawn from NIA's clinical and financial database supports the view that 

there is substantial incidence of self-referral for nuclear medicine services and that selfreferring providers are much more likely to order these types of services than those who 

do not self-refer and they do so with no concomitant clinical justification. Specifically, 

we reviewed data on nearly 1,000 providers who made referrals for nuclear cardiology 

services within a major health plan in the period June 2002 through May 2003. In all, 

1,605 referrals for these services were recorded, of which 1,096 – 68 percent – were selfreferrals. 

 

1

 National Academy of Science Health Risks from Exposure to Low Levels of Ionizing Radiation: 

BEIR VII Phase 2 Committee to Assess Health Risks from Exposure to Low Levels of Ionizing 

Radiation, National Research Council 2005 
97

We also stratified our data to identify groups of providers whose self-referral rates 

were classified as “high,” “medium,” and “low.” In the “high” group of providers, 

virtually all nuclear cardiology referrals – 1,045 out of 1,500 – were self-referrals, while 

in the “low” group virtually none of the referrals were self-referrals. Using these 

classifications, we were able to determine that self-referring providers in the “high” 

group were four times more likely to make a nuclear cardiology referral of any kind than 

were providers in the “low” group. 

It is clear that self-referring is a culprit for climbing imaging costs, despite nuclear 

medicine's approval as a designated health service under the Stark Act. Since imaging 

services can be performed in referring physicians' offices under an exception, growth in 

self-referrals will undoubtedly continue to proliferate with little or no exceptions, despite 

the change in CMS rules. This practice must stop. Self-referral is manipulating a 

loophole that must be closed in order to establish parity and allow the true intent of the 

Stark Act to properly police the imaging community. 

CONCLUSION: A PROPOSED SOLUTION FOR MOVING FORWARD: 

PRIOR AUTHORIZATION AS A CHECK FOR IMAGING COSTS 

NIA's safeguards ensure that patients receive clinically appropriate and safe imaging 

in an efficient and timely manner, but we recognize that pre-authorization programs are 

not always embraced by physicians. Therefore, we endeavor to expedite the preauthorization process. Within minutes, referring physicians or their clinical staffs 

receive approval or are notified that the decision has been forwarded for clinical 

consultation by a Board-Certified Radiologist or physician. The best radiology 

professionals in medicine, including our over 60 board-certified radiologists and other 

specialists handle those cases that require further judgment on a peer-to-peer consultative 

basis. If a request is denied on a clinical basis, our reviewers always recommend an 

appropriate alternative procedure. No request is ever denied without a concerted effort 

by our physicians to discuss the matter with the referring physician in peer-to-peer 

dialogue. 

Out safeguards ensure that patients receive clinically appropriate and safe imaging 

in an efficient and timely manner, but we recognize that pre-authorization programs are 

not always embraced by physicians. We endeavor to expedite the process. Within 

minutes, referring physicians or their clinical staff receive approval or are notified that 

the decision has been forwarded for clinical consultation by a board-certified radiologist 

or physician. Expert physicians, including over 60 board-certified radiologists and other 

specialists, handle those cases that require further judgment on a peer-2-peer consultative 

basis. If a request is denied on a clinical basis, our reviewers almost always recommend 

an appropriate alternative procedure. No request is ever denied without a concerted effort 

by our physicians to discuss the matter with the referring physician in peer-2-peer 

dialogue. 

NIA also publishes up-to-date clinical guidelines covering the common reasons for 

requesting imaging tests. These guidelines have been developed from practice 

experience, literature reviews, specialty criteria sets, and empirical data from credible 

medical organizations such as the American College of Radiology, the American College 

of Cardiology, and other specialty doctor groups. Our proprietary algorithms are 

developed and updated using NIA's imaging database with reference to the latest medical 

literature. The algorithms are regularly reviewed and approved by state Imaging Advisory 

Committees, health plan Chief Medical Officers, state medical societies, and updated by 

our database of encounters which grows by 300,000 calls per month. 

We believe that there are a number of options available to both Congress and the 

Administration as a means of identifying and deploying cost-cutting initiatives in 

imaging. 
98

Congress could enact two of the 2005 MedPAC recommendations which require 

federal standards for physicians who perform diagnostic imaging procedures, as well as 

for those physicians who read and interpret the images. While the establishment of 

federal standards for medicine is admittedly a difficult and complex procedure, there is a 

precedent for setting these standards. For example, the Mammography Quality Standards 

Act (MQSA) that was first enacted in 1992 and reauthorized three times since could 

justify a legislative effort to set federal standards for other forms of diagnostic imaging. 

Furthermore, another law that demonstrates that the federal government does have a role, 

and responsibility, to set medical standards is the Clinical Laboratory Improvement 

Amendments (CLIA), which was enacted by Congress nearly 20 years ago in 1988. Just 

as MQSA established standards for mammography facility, CLIA did the same for 

laboratory testing. 

We believe that these two laws illustrate a federal precedent for establishing medical 

standards and regulating the practice of medicine. Patient safety was the genesis behind 

both MQSA and CLIA, and we believe that the same argument can be applied more 

broadly across the spectrum of diagnostic imaging procedures. Clearly, patient safety is 

an issue in diagnostic imaging, e.g. exposure to excessive radiation, the improper 

handling of a patient, and the accuracy and reliability of tests. 

Second, we believe that there are opportunities with Congress and CMS for the 

development of creative new techniques in the management of radiology services. For 

example, radiology benefits management could be a key enabler of “pay for 

performance” and other value-based purchasing systems planned for Medicaid, Medicare 

Advantage, and fee-for-service Medicare. We have had some discussions with CMS 

officials on this topic, and we welcome any opportunity to broaden our dialogue on this 

issue. There is the potential of advancing this issue under a pay-for-performance proposal 

where payments to imaging providers are linked to quality and efficiency, which would 

address the issue of exploding costs. We look forward to the opportunity to collaborate 

with Congress, the Administration, and other stakeholders to develop an appropriate pilot 

program that strikes a balance between cost savings and patient safety. NIA recognizes 

that these are lofty goals being suggested at a time when the Congressional calendar is 

winding down. But, sound public policy initiatives require visionaries and forward 

thinkers, and the time is now to consider the framework for a pragmatic healthcare 

agenda for the 110th Congress and beyond. 

Thank you for the opportunity to appear before you today. I would be delighted to 

answer any questions you may have. 

 MR. DEAL. Thank you. 

 Dr. Laube. 

DR. LAUBE. Thank you, Chairman Deal, for the opportunity to 

discuss the use of ultrasound in our specialty, and its importance to the 

women we serve. 

 I represent the American College of Obstetricians and Gynecologists, 

a membership organization of over 50,000 obstetricians and 

gynecologists. 

 The safety and longstanding integration of ultrasound in medical 

offices sets it apart from other parts of imaging, including CT, MRI, and 

PET. Congress should recognize these differences and exempt OB/GYN 

ultrasound from many of the proposals under consideration. 

 To make my point, I will summarize the major points in the written 

testimony, which are five. 
99

 First, ultrasound is safe. Ultrasound uses low-intensity sound waves 

to generate images, not ionizing radiation or potential carcinogen in Xray, CT, and nuclear medicine. No harmful effects have ever been 

associated with the medical use of ultrasound. The clinical benefits far 

outweigh any potential risk. 

 Second, OB/GYN residents are extensively trained in ultrasound 

throughout their f4 years of training. Since 1982, ultrasound has been 

recognized as an essential element of OB/GYN training. As someone 

who has been in academic medicine for 25 years and has trained over 

350 OB/GYN residents, I can certainly attest to the integration of 

ultrasound in our medical training. ACOG offers postgraduate medical 

education in ultrasound and educates its fellows on appropriate use. 

ACOG has worked with the American Institute of Ultrasound Medicine 

and with the American College of Radiology to develop clinical practice 

guidelines and a voluntary accreditation program. 

 Third, ultrasound use in physician offices saves healthcare costs and 

improves quality of care. Use of ultrasound in clinical care speeds 

decision-making and enables greater reliance on minimally invasive, less 

costly procedures. Many exams need to be performed urgently, such as 

when women experience unexplained bleeding, pelvic pain, or discovery 

of a mass. Ectopic pregnancies or complications during active labor can 

be life-threatening, and require immediate ultrasoundography. 

Ultrasound has greatly reduced the need for exploratory surgery. 

 Fourth, ultrasound is growing at a much slower rate than other 

imaging services. For ultrasound codes billed by OB/GYNs for the 

diagnosis of gynecologic conditions, the growth between 2001 and 2003 

was less than 4 percent a year. This growth rate is entirely appropriate 

and reflects in part a shift in services from costly hospital settings to less 

costly office settings. Any assessment of Part B growth in ultrasound 

use needs to take into account the companion reduction in hospital 

ultrasound. Office based imaging allows patients to have the same exam 

or procedure in the office that they would have had previously in the 

hospital. It is more convenient for the patient and allows for faster 

diagnosis and treatment. 

 In addition, our patients are aging. More people are living longer 

with chronic disease, and pregnancy rates are soaring among women 

older than 35. These women are more likely to have pregnancy 

complications and are at increased risk for birth defects. Ultrasound is 

indicated for these reasons, and many older mothers should expect 

ultrasounds and ultrasound-guided tests, such as amniocentesis or 

corionic filler sampling. 

 In a high-risk specialty like mine, some imaging growth is 

undoubtedly due to defensive medicine, and until Congress acts to solve 
100

America’s medical liability crisis, the cost of defensive medicine, 

including imaging, will grow. 

 Fifth and last, current imaging proposals are not necessary for 

ultrasound. Accreditation measures are unnecessary for OB/GYNs who 

are trained in ultrasound from the beginning of their residency and are 

certified by the American Board of OB/GYN in its use. Many 

OB/GYNs are in small practices. Unlike multi-million dollar practices 

using CT and MRI equipment, or for freestanding imaging centers, a solo 

practitioner doesn’t have the office support to manage the process of 

accreditation. In the end, no Federal certification or accreditation 

standards can guarantee that the right diagnostic test is provided in the 

right setting at the right time. This can only be accomplished through the 

training programs and education as those that we offer through ACOG. 

 In summary, ultrasound has undeniable benefits for both patients and 

physicians needing speedy diagnosis and timely treatment. It has a long 

record of safe use it used appropriately in clinical settings. Growth is 

low and appropriate. We urge Congress to recognize the value and 

distinctions of ultrasound as it considers various imaging proposals. 

Thank you. 

 [The prepared statement of Dr. Doug Laube follows:] 

PREPARED STATEMENT OF DR. DOUG LAUBE, PRESIDENT, AMERICAN COLLEGE OF 

OBSTETRICIANS AND GYNECOLOGISTS

On behalf of the American College of Obstetricians and Gynecologists (ACOG) and 

our 51,000 physicians and partners in women’s health, I would like to thank Chairman 

Deal and members of the Energy and Commerce Health Subcommittee for the 

opportunity to discuss the use of ultrasound in our specialty and the importance of this 

technology to the women we serve. I am the Chair of the Department of Obstetrics and 

Gynecology at the University of Wisconsin and the current President of the American 

College of Obstetricians and Gynecologists. 

I would like to focus on the imaging most used in my specialty—ultrasound. We 

believe the safety and longstanding integration of ultrasound in medical offices sets it 

apart from other forms of imaging and warrants special consideration in this debate. 

Medicare patients make up only 13% of the average ob-gyn practice. This small but 

significant percentage includes both older women and women with disabilities of all 

ages. While today’s hearing is focused on imaging in Medicare, the decisions about 

Medicare policy this Committee may make will be adopted widely by private payers, 

Medicaid and TRICARE, the health care system for 9 million military families. Clearly, 

women of all ages throughout the country stand to be affected by these decisions. 

Medical imaging is a complex subject. Discussions of growth and safety of imaging 

must clearly distinguish between different types of imaging. Setting it apart from other 

imaging, ob-gyn ultrasound has a high record of safety, is fully integrated in day-to-day 

patient care, and is a critical part of medical resident education. A distinction between 

ultrasound and the rest of the imaging field, including CT, MRI, and PET, is warranted. 

We urge the Congress, in any legislation, to recognize the safety, quality and 

appropriateness of ultrasound studies and to exempt ultrasound from any new 
101

restrictions on imaging use, federal quality standards, or additional administrative 

burdens. 

Unique Characteristics of Ultrasound 

Ultrasound uses low intensity sound waves to generate images. Most people are 

familiar with obstetric ultrasound as a way to evaluate the health of a fetus in utero. But 

ultrasound has broader application and value in obstetrics and gynecology and across 

several medical specialties. In obstetrics, ultrasound is useful in helping to accurately 

date a pregnancy, estimating the amount of amniotic fluid and detecting birth defects. 

Ultrasound may be necessary if there is a complication during labor or to identify an 

ectopic pregnancy, a life-threatening condition. In gynecology, ultrasound is used to 

identify the cause of unexplained pain or bleeding, to visualize a mass felt during a 

manual exam and in the assessment of infertile patients. 

Ultrasound has been established as an accurate imaging modality for many 

conditions. Other specialties use sonography to identify cysts or tumors in the breast, 

look for causes of abdominal pain, investigate causes of joint pain, or identify an enlarged 

prostate. In some conditions requiring a biopsy, ultrasound can be used to guide needle 

placement and eliminate the need for surgery. Ultrasound is also used to guide the 

needle placement during amniocentesis to reduce the risk of maternal or fetal injury. 

Ultrasound has many advantages over other types of imaging. Since it does not use 

ionizing radiation or contrast media, to which some patients are allergic, it is much safer. 

Transabdominal ultrasound does not require sedation and is performed non-invasively, 

reducing risk of infection and other potential adverse events. Portable or hand-carried 

equipment allows scans to be performed in an ob-gyn’s exam room to capture real-time 

images, including fetal movement and umbilical blood flow. Critical clinical data are 

immediately available to the physician making patient care decisions. Its convenience for 

physicians and patients, and real-time precision have made ultrasonography an essential 

tool for early diagnosis of disease and quality health care. 

Ultrasound is an essential part of ob-gyns’ clinical care. With several decades of 

clinical use, ultrasound is fully integrated into patient care. Removing this tool from the 

exam room or creating burdensome new requirements for physicians who use it will only 

bring harm to patients who want and need timely diagnosis and accurate information. 

Congress should reject proposals to restrict the use of this tool. 

Ultrasound is different from other imaging services for several reasons: 

• Ultrasound is safe; 

• Training is incorporated into residency and board exams for many physician 

specialties and all ob-gyns; 

• Use of ultrasound saves money and improves quality; and 

• Growth of ultrasound is appropriate and is no faster than growth in other 

Medicare Part B services. 

These many important differences lead us to the conclusion that proposals in the 

imaging debate are unnecessary for ultrasound. 

Ultrasound is Safe 

The first consideration in the use of any technology should be its safety. Diagnostic 

ultrasound uses low intensity sound waves to generate images, unlike x-ray, CT and 

nuclear medicine, which require ionizing radiation, a potential carcinogen. Additionally, 

ultrasound does not require the use of contrast media, which are required for angiography 

and some CT studies, and cause adverse events in a significant number of patients. 
102

After many years of widespread clinical use, the FDA (among others) has found no 

known harmful effects associated with the medical use of ultrasound1

. Studies in humans 

have revealed no direct link between the use of diagnostic ultrasound and any adverse 

outcome. It is the general consensus that the clinical benefits of ultrasound far outweigh 

any potential risk. 

In particular, ACOG has carefully investigated the safety of scanning during 

pregnancy. In this regard, we concur with the FDA statement that “ultrasonic fetal 

scanning is generally considered safe and is properly used when medical information on a 

pregnancy is needed. But ultrasound energy delivered to the fetus cannot be regarded as 

completely innocuous. Laboratory studies have shown that diagnostic levels of 

ultrasound can produce physical effects in tissue, such as mechanical vibrations and rise 

in temperature. Although there is no evidence that these physical effects can harm the 

fetus, public health experts, clinicians, and industry agree that casual exposure to 

ultrasound, especially during pregnancy, should be avoided. Viewed in this light, 

exposing the fetus to ultrasound with no anticipation of medical benefit is not justified.”2

ACOG has taken a firm position against the non-medical use of ultrasound and is 

alarmed by the emergence of imaging centers whose sole use of ultrasound is for 

entertainment, or ‘keepsake’ ultrasound, a practice that ACOG does not endorse.3

 ACOG 

has advised several imaging centers of our position and at ACOG’s urging some imaging 

manufacturers have adopted similar positions.

Ob-Gyns are Well-Trained and Well-Qualified to Perform Ultrasound Exams 

Taking ultrasound out of the ob-gyn office is akin to taking away the stethoscope, it 

is so integrated with the care ob-gyns provide, particularly in the treatment of pregnant 

women. Procedures performed by ob-gyns include sonography to assist in the diagnosis 

of certain pregnancy complications, diagnosis and management of certain gynecological 

cancers, sources of pelvic pain or postmenopausal bleeding. Maternal-fetal medicine 

specialists, who work with high-risk pregnant women, are trained in the use of fetal 

echocardiography to investigate fetal heart problems. Patients requiring advanced 

imaging procedures--such as MRI, CT and PET--are generally referred to a radiologist. 

Residency Education 

Since 1982, ultrasound has been recognized as an essential element of ob-gyn 

training. Training in ultrasound begins early in residency and continues throughout. The 

manual for the American Residency Coordinators in Obstetrics and Gynecology 

(ARCOG) specifies that by the end of the first year of training, ob-gyn residents must 

learn ultrasound physics and be able to perform time scanning and interpretation under 

supervision. By the end of the second year, ob-gyn residents observe and perform 

advanced ultrasound procedures under supervision and can interpret sonograms. In the 

third year, residents are expected to be able to identify normal anatomy on transvaginal 

ultrasound, as well. 

In addition, the Accreditation Council for Graduate Medical Education ob-gyn 

residency requirements explicitly state that educational curriculum must include obstetric 

 

1 U.S. Department of Health and Human Services, Public Health Service, Food and Drug 

Administration: An Overview of Ultrasound: Theory, Measurement, Medical Applications, and 

Biological Effects. Publication # FDA 82-8190 

2 U.S. Food and Drug Administration, Center for Devices and Radiological Health, Diagnostic 

Devices Branch. Fetal Keepsake Videos. Available at: 

http://www.fda.gov/cdrh/consumer/fetalvideos.html. 

3

 ACOG Practice Bulletin No. 58, Ultrasound in Pregnancy; ACOG Committee Opinion No. 299, 

Guidelines for Diagnostic Imaging During Pregnancy; ACOG Committee Opinion No. 297, 

Nonmedical Use of Obstetric Ultrasound; American Institute of Ultrasound in Medicine. 1999. 

Prudent Use; American Medical Association, H480-955: “Keepsake” Fetal Ultrasonography. 
103

and gynecologic ultrasonography and other imaging techniques. Under guidelines from 

the Council on Resident Education in Obstetrics and Gynecology (CREOG), graduating 

ob-gyn residents must be able to understand and independently perform diagnostic 

ultrasonography. The American Board of Obstetrics and Gynecology tests extensively on 

this subject in certification and recertification exams. 

Obstetric ultrasound has been in ob-gyn offices for so long that radiology residents 

see very little of it in their training. One study found that radiology residency programs 

provided fewer than 4 weeks per year of obstetric sonography and that radiology 

residency and fellowship lecture topics were similarly deficient. The authors concluded 

that for radiology residents “current levels of experience in obstetric sonography may not 

be providing sufficient experience to allow residents to appropriately manage call cases 

or for practicing radiologists to provide such services after their training is completed.”4

 

The Role of Specialty Societies in Ensuring Quality 

ACOG, and other specialty societies, offer many opportunities for postgraduate 

medical education in ultrasound through seminars and meetings. In addition, several 

specialties have developed guidelines for appropriate use of imaging technology. ACOG 

has several publications to educate Fellows on appropriate usage of this technology. 

Practice Bulletins offer guidance on choosing a transducer; differentiation between 

standard, limited and specialized examinations; the indications and parameters for first, 

second and third trimester ultrasound; and proper documentation of the scan. These 

criteria were published in the journal Obstetrics and Gynecology and are widely available 

to our members. In addition, ACOG has worked with the American Institute of 

Ultrasound in Medicine (AIUM) and with the American College of Radiology (ACR) to 

develop clinical practice guidelines for antepartum obstetrical, female pelvic and saline 

infusion sonohysterography and voluntary accreditation programs. 

When specialty societies see the need for further education, training can be 

developed to fill the gap. To facilitate the incorporation of ultrasound into surgical 

practice, the American College of Surgeons developed an ultrasound education program 

consisting of didactic and hands-on learning.5

 It consists of a basic, core module that 

covers ultrasound physics, instrumentation and scanning technique, and clinical 

applications. The basic core module is a prerequisite for education in the advanced 

training modules. There are advanced training modules in acute or trauma, vascular, 

abdominal, anorectal, head and neck, and breast ultrasound. Questions are included on 

the American Board of Surgery qualifying and in-service examinations that require the 

interpretation of ultrasound images. 

Use of Ultrasound Saves Money and Enhances the Quality and Safety of Care 

Use of ultrasound in clinical care speeds decision-making and enables greater 

reliance on minimally invasive, less costly, procedures. Many exams need to be 

performed urgently, such as when a woman experiences unexplained bleeding, pelvic 

pain or discovery of a mass. Ectopic pregnancies or complications during active labor 

can be life threatening and require immediate ultrasonography so the patient can be cared 

for quickly. Ob-gyns are the most appropriate physicians to provide these services. 

Radiologists often are not on call throughout the night and on weekends when many 

 

4

 CJ Kasales et al. Training in Obstetric Sonography for Radiology Residents and Fellows in the 

United States. American Journal of Roentgenology. 2001; 177: 763-767. 

5

 ED Staren, MM Knudson, GS Rozycki, JK Harness, DC Wherry, SR Shackford. An evaluation of 

the American College of Surgeons' ultrasound education program. American Journal of Surgery. 

2006. 191(4):489-96. 
104

emergencies occur. It is critical that women have access to diagnosis and treatment when 

they need it. 

 In ob-gyn, as in many other specialties, ultrasound has greatly reduced the need for 

“exploratory” surgery or invasive diagnostics to make the same determination. In many 

cases, integration of ultrasound can have considerable cost savings, in addition to quality 

of care and patient benefits. 

• Continuous ultrasound guidance improves the safety of third trimester 

amniocentesis and reduces costly complications. In one study, ultrasound 

guidance helped achieve a 99% success rate, considerably higher than the 87% 

success of the procedure in previous studies without using ultrasound 

guidance.6

 Prior to ultrasound guidance, complications were common and 

often serious, including premature rupture of membranes, infection, maternal 

hemorrhage, fetal or placental hemorrhage, fetal distress and fetal injuries. 

• Ultrasound imaging in clinical practice enables a breast surgeon to perform a 

minimally invasive breast biopsy and determine whether the lump is cancerous 

in a matter of days. Previously a surgeon had to do an open biopsy and the 

patient waited as long as 10 days to learn the result. The Medicare program is 

estimated to have saved as much as $88 million because of the use of imageguided breast biopsies instead of open biopsies between 2001 and 2003.7

• One study found that use of transvaginal ultrasound as the initial diagnostic test 

to evaluate peri- and post-menopausal women with abnormal vaginal bleeding 

has been found to yield substantial cost-savings over biopsy-based treatments. 

Endometrial biopsy is a relatively inexpensive test for identifying endometrial 

cancer but is a poor test for diagnosing benign endometrial abnormalities. 

Transvaginal ultrasound is more sensitive to these benign conditions and may 

be a cost-saving, less invasive alternative to biopsy.8 

In other examples: 

• Ultrasound guidance of central venous catheterization (CVC) placement 

reduces the risk of devastating complications by 75%. 

• Point of care evaluation of torso trauma resulted in decreased mortality and 

reduced inpatient length of stay. A conservative estimate of the resulting 

savings is $569 million per 100,000 patients.9

• A study examining endoscopic ultrasound with fine needle aspiration for 

preoperative staging of esophageal cancer resulted in potential cost reductions 

of $12,340 per patient by reducing the total number of thoracotomies 

performed.10

• Point of care, limited ultrasound during evaluation of patients for cardiac 

conditions revealed sufficient information for clinical decision making in 80% 

of cases. The remaining 20% received a detailed cardiac ultrasound. Using 

this staged approach, total costs were reduced by 33% and time to diagnosis 

was reduced from four days to instantaneous.11 

 

6

 MC Gordon, K Narula, R O’Shaughnessy, W Barth. Complications of Third-Trimester 

Amniocentesis Using Continuous Ultrasound Guidance. Obstetrics and Gynecology. 1999. 99 ( 2). 

255-259. 

7

 An Analysis of the Use of Ultrasound Imaging Services in the Medicare Program, The Lewin 

Group, May 27, 2005 

8

 Medverd JR, Dubinsky TJ. Cost analysis model: US versus endometrial biopsy in evaluation of 

peri- and postmenopausal abnormal vaginal bleeding. Radiology 2002;222(3):619-27. 9

 Effect of Early Ultrasound on Outcomes of Trauma Patients, Acad Emerg Med 2000, 7:501 10 Impact of endoscopic ultrasound combined with fine-needle aspiration biopsy in the management 

of esophageal cancer, Endoscopy. 2003 Nov;35(11):962-6. 

11 Clinical utility and cost effectiveness of a personal ultrasound imager for cardiac evaluation during 

consultation rounds in patients with suspected cardiac disease, Heart. 2003 Jul;89(7):727-30. 
105

• Thyroid nodules are a common occurrence. The usual approach to diagnosing 

these nodules is fine needle aspiration biopsy. When ultrasound guidance is 

used for these biopsies, the success rate of the procedure jumps from 75% to 

94% avoiding a costly hospital-based open biopsy.12 The cost of using 

ultrasound each time – roughly $150 – compared with the cost of an open 

biopsy – approximately $2900 – shows that using ultrasound routinely in these 

cases could save $40,000 per 100 patients. 

• A 2003 study by the UK's National Institute for Clinical Excellence and 

published in The British Medical Journal found that patients experience fewer 

complications when providers use ultrasound imaging to guide insertion of the 

catheters. Economic modeling showed that using ultrasound to place central 

venous catheters would save £2000 for every 1,000 procedures. This included 

the costs of purchasing ultrasound machines and training medical staff.13

Growth in Ultrasound Utilization 

In its March 2005 Report to Congress, MedPAC estimated overall imaging growth 

to be at a rate of 10.1%, compared to a 5.2% overall growth rate in Medicare physician 

services between 1999 and 2002. This analysis fails to differentiate between the growth 

rate of ultrasound versus the growth rate of advanced imaging and does not adequately 

reflect savings from in-office ultrasound. Further analysis of the data show that MedPAC 

also may have understated overall growth in Medicare services, making imaging growth 

seem larger by comparison. 

Ultrasound imaging in the physician office grew slower than imaging services in 

general (8.9% versus 10.8%). Ultrasound imaging services also grew slower than all 

Medicare Part B services (7.2% versus 7.8%) when looking across physician and 

outpatient settings. For some categories of ultrasound services, such as the ultrasound 

codes billed by ob-gyns for diagnosis of gynecologic conditions, the growth in this period 

has been less than 4% a year. 

The overall Part B growth rates used in the analysis by the Lewin Group differ 

significantly from those reported by MedPAC in its March 2005 report to Congress 

(which cited a 4.3% average annual growth rate from 2001 to 2002). This difference is 

primarily explained by our inclusion of all Medicare services, where MedPAC compared 

imaging growth to only selected types of physician services. In particular, MedPAC did 

not include durable medical equipment, or the “Other” category in its analysis. (The 

“Other” category consists primarily of high-growth chemotherapeutic drugs for cancers, 

other drugs and biologicals covered under Medicare Part B, and ambulance services.) 

Additionally, our analysis is based on all Medicare Part B claims, while MedPAC used 

physician claims from a 5-percent random sample of Medicare beneficiaries. 

 

12 Efficacy of Ultrasound-Guided Fine-Needle Aspiration Biopsy in the Diagnosis of Complex 

Thyroid Nodules, The Journal of Clinical Endocrinology & Metabolism, Vol 86, No. 9 4089-4091. 13 The Effectiveness and Cost-Effectiveness of Ultrasound Locating Devices for Central Venous 

Access: A Systematic Review and Economic Evaluation, Calvert N, Hind D, McWilliams RG, 

Thomas SM, Bererley C, Davidson A; Health Technology Assessment 2003; 7 (12), National 

Institute for Clinical Excellence, March 2003 
106

 Explaining Growth: Shift in Site of Service 

Lewin found that the application of ultrasound by different specialties is appropriate 

to their patient populations, as well as a shift in ultrasound services from the hospital into 

the physician’s office, which benefits patients in terms of convenience and accelerates 

diagnosis and treatment. 

Table 1 reflects the average annual growth in physician- and hospital-billed services 

for the period from 1999 to 2003. The differences between the growth rate in physicianbilled services and the combination of physician- and hospital-billed services indicates, in 

part, a shift in site of service. For ultrasound in particular, the numbers suggest services 

were shifting out of hospital outpatient departments towards physicians’ offices. The 

same trend, and potential shift in site of service, is not evident in all Medicare services. 

Significant growth continued in all sites of service over the 1999 to 2003 time period. 

As much as 19-21% of the growth in the technical component of ultrasound imaging is 

attributable to the shift in site of service, contributing significantly to the appearance of 

growth in these services. But a significant share of the perceived growth may not be 

growth at all, but a simple one-for-one substitution of scans that were previously 

performed in the hospital outpatient department and are now performed in the physician’s 

office. 

Table 1

Average Annual Growth in Volume of Medicare Part B Services across Providers from 

1999-2003 (Based on 2005 RVUs) 

7.2%

8.9%

10.8%

7.8%

7.2%

8.7%

9.6%

5.4%

2.8%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Total Ultrasound Total Imaging* All Medicare Part B

Services**

% Growth in RVU

Physician Physician/Hospital Outpatient Hospital Outpatient

Source: The Lewin Group’s analysis of the Medicare Physician/Supplier Master Summary 

File. 

* Total Ultrasound includes BETOS categories I3A–I3F 

**Total Imaging includes BETOS categories I1A-I4B 

*** All Medicare Part B Services includes all BETOS categories, including drugs, durable 

medical equipment, and ambulance services. Growth in Hospital Outpatient Services 

spending is estimated by using growth in allowed charges deflated by the hospital market 

basket. This is then weight averaged with the growth in physician services, using total 

allowed charges for the weights, to estimate growth in All Medical Services for 

Physician/Hospital Outpatient 
107

Understanding Utilization: Incidence of Diseases 

The increase in the incidence rate (per 1,000 population) of the diseases for which 

ultrasound imaging is useful has increased in recent years. Some of these increases have 

been quite substantial, such as a cumulative increase of more than 20% in the incidence 

of gallbladder, pancreatic, and liver disease over a four-year period. These diseases may 

be diagnosed using ultrasound on the abdomen or pelvis region. 

Some of this increase may also be an increase in the rate of detection. Medicare 

began covering annual prostate exams and prostate-specific antigen (PSA) tests in 2000, 

which is in the period of our data, and per-population use of prostate ultrasound increased 

5% between 1999-2001 and not at all from 2001-2003. It is reasonable to believe that the 

new coverage resulted in an increase to a higher level of utilization of follow-ups to PSA 

tests, including prostate ultrasound and ultrasonic guidance of prostate biopsy (as 

discussed below), but that once that adoption had happened, further increases above the 

current level may not result. 

Outside of Medicare, pregnancy rates are soaring in women older than age 35, and 

these women are more likely to have pregnancy complications, including hypertension 

and diabetes. Babies born to older mothers are more likely to be born preterm or with a 

low birthweight. The risk of miscarriage doubles and the older a woman gets, the greater 

her risk of carrying a child with chromosomal abnormalities. Ultrasound would be 

indicated for any one of these factors, and many older mothers should expect several 

ultrasounds and possibly ultrasound-guided tests such as amniocentesis or chorionic 

villus sampling (CVS). 

Appropriateness 

In looking at most utilization data, the question remains: how do you distinguish 

appropriate utilization from inappropriate utilization? What part of growth is better 

access to screening or more people living longer with chronic disease, and what part is a 

redundant use of health care resources? Public and private payers struggle with these 

questions. But until we better know how to answer these questions, Congress, CMS and 

MedPAC should recognize that it is premature to label all growth as bad growth. 

For instance, ultrasound-guided needle biopsy allows a physician to diagnose breast 

cancer without an open incision. The patient is spared time in the operating room, 

increased risk of infection, days off work and scarring. But on the Part B side of the 

ledger, two additional ultrasounds are scored—one for diagnosis and one to guide the 

needle. Marrying the hospital outpatient fee schedule and the physician fee schedule 

costs shows that needle-guided breast biopsy saves Medicare millions of dollars, but 

looking at the physician fee schedule alone shows only the cost of two additional 

ultrasounds. 

In a study assessing appropriateness, conducted for Highmark Blue Cross Blue 

Shield, ob-gyns ranked highest among physician specialties in appropriateness, followed 

closely by urology, another specialty that has integrated the use of ultrasound in their 

practice.14 Study authors attribute ob-gyns’ high degree of appropriateness to the 

specialty’s “relatively high degree of consensus” on imaging usage. Radiology and other 

specialties trailed in comparison. When broken down by diagnostic code, obstetric 

ultrasound was second only to mammography in overall appropriate usage at 86%. 

Ultrasound, generally, had an appropriateness score of 84%, far ahead of MRI and CT, 

both at 56%.

 

14 TG Dehn, B O’Connell, RN Hall, and T Moulton. Appropriateness of Imaging Examinations: 

Current State and Future Approaches. Imaging Economics. March/April 2000. 
108

Defensive Medicine 

Some imaging utilization growth, particularly within high-risk specialties like obgyn and in states that have not enacted tort reform, is undoubtedly attributable to the 

practice of defensive medicine. The fear of being sued leads physicians to sometimes 

perform additional procedures or tests, or refer to specialists.15 Some estimates of 

defensive medicine costs, as a whole, run as high as $60-100 billion a year. It costs the 

federal government billions of dollars in Medicare and Medicaid spending and raises the 

cost of health care for every American. 

The fear of being sued is justified. ACOG surveys members regularly on the issue 

of medical liability. According to preliminary data from the 2006 ACOG Survey on 

Professional Liability, the typical ob-gyn can expect to be sued 2.3 times over his or her 

career.16 In fact, 89.2% of ob-gyns reported they had been sued at least once so far. Over 

one-third (37.3%) have been sued for care provided during their residency. 

This high rate of legal activity does not equate to widespread malpractice. Rather, it 

demonstrates a lawsuit culture where doctors are held responsible for a less than perfect 

outcome. And in obstetrics, there is no guarantee of a perfect outcome, no matter how 

perfect the prenatal care and delivery. 

A study published in the Journal of the American Medical Association surveyed 

physicians in 6 high-risk specialties in Pennsylvania and found that nearly all of them 

practiced defensive medicine (93%).17 Within this group, 43% who detailed their most 

recent defensive act cited using imaging. This was true of a smaller but significant 

percentage of ob-gyns (18%). 

Ultrasound adds a layer of reassurance to many ob-gyns and to their patients. Until 

Congress acts to solve America’s medical liability crisis, the costs of defensive medicine, 

including imaging, will continue to grow. 

Ultrasound is Different: Current Proposals Are Not Necessary for Ultrasound 

Accreditation and Privileging 

Some have offered proposals to require accreditation of physician practices in 

Medicare and in the private sector, or privileging beyond board certification. 

Accreditation measures are unnecessary for ob-gyns, or other specialists, who are trained 

in ultrasound from the beginning of their residency and use it continuously and accurately 

throughout their medical career. Accreditation of medical practices is typically done to 

reduce exposure to radiation and to certify that technologists are using radiating 

equipment properly. This is not relevant to ultrasound, which doesn’t use ionizing 

radiation. 

Accreditation would also set a dangerous precedent of government intervention in 

patient care. If a physician needs special certification for ultrasound, then where would 

government accreditation regulations end? It would be unthinkable to parse medical 

practice into multiple government accreditation programs for each facet of clinical care, 

but that is just what is being proposed here. 

Accreditation of ultrasound, an essential tool of private practice physicians, would 

be much more burdensome than accreditation for advanced imaging, largely found in 

imaging centers. Ultrasound is widely dispersed in physician offices. Harvey Klein, 

 

15 Common Good and Harris Interactive. Fear of Litigation Study: The Impact on Medicine. 

Common Good, March 4, 2002. 

16 American College of Obstetricians and Gynecologists. 2006 ACOG Survey on Professional 

Liability. (Preliminary unpublished data) The 2006 ACOG Survey on Professional Liability 

administered between January 23 and March 20, 2006 by the American College of Obstetricians and 

Gynecologists. Results based on responses to self-administered mailed and electronic 

questionnaires. National response rate = 37%. 

17 DM Studdert, et al. Defensive Medicine Among High-Risk Specialist Physicians in a Volatile 

Malpractice Environment. JAMA. 2005; 293: 2609-2617. 
109

Ph.D. of Klein Biomedical Consultants, a long-time ultrasound industry analyst, 

estimates that as many as 85 - 90% of ob-gyn offices in the United States have ultrasound 

on site for use in managing the care of their patients. One-quarter of ob-gyns are in solo 

practice and the mean practice size is three. These physicians do not have the office 

support staff on hand to manage the process of accreditation, unlike multi-million dollar 

imaging centers. 

Furthermore, physician specialty societies, including ACOG, are already taking 

quality assurance measures, including participation in voluntary accreditation through the 

American Institute of Ultrasound in Medicine. Imposing a new layer of federal 

regulation on physicians will only increase practice expenses and require additional 

federal resources at CMS—already stretched beyond its means—for verification. 

No federal certification or accreditation standards can guarantee that the right 

diagnostic test is provided in the right setting at the right time. This can only be 

accomplished through training programs and recommendations on indicated usage, like 

those promoted by ACOG. 

Ultrasound has undeniable benefits for both patients and physicians needing prompt 

diagnosis and timely treatment. Its safety is high. Ultrasound is used appropriately in 

clinical settings. And it is growing at a slower rate than other Medicare imaging services 

and all Part B services generally. There is no compelling reason for the government to 

subject physicians, many in small practices and having many years of experience, to 

burdensome new accreditation requirements.

In-Office Ancillary Exception 

Removal of the in-office ancillary services exception of the Stark Law (42 USC 

§1935nn) is an overly broad remedy, particularly in ultrasound. This change would 

restrict in-office diagnostic testing and result in substantial inconvenience and costs for 

patients, who would have to schedule a new appointment, with a different facility and a 

different physician, when the needed testing could be performed on the spot by the 

patient’s own physician. Continuity of care would be interrupted, and the treating 

physician would lose valuable time in detecting and diagnosing a condition. An ob-gyn 

unable to perform ultrasonography would also lose the benefit of seeing real-time images, 

important in assessing fetal movement and blood flow. 

Maryland’s self-referral law--one of the toughest in the country—allows only 

radiology to self-refer for MR, CT and radiation therapy procedures, effectively limiting 

ownership of these technologies by nonradiologists. The law specifically excludes 

ultrasound. To the best of our knowledge, no state legislature has considered restricting 

in-office ultrasound. 

Adopting the IDTF Certification Program in the Physician Office 

Another proposal would expand certification requirements of independent diagnostic 

testing facilities (IDTFs) to the physician office. The IDTF certification program allows 

individual Medicare carriers to determine which specialties are able to supervise imaging 

exams, listed by CPT code. This approach would create a de facto privileging program 

under Medicare that is based on the physician’s specialty rather than the training and 

experience of any specific physician or the guidelines that are derived by each specialty 

organization for its members. If applied to physician offices, ob-gyns in 12 Western 

states that use the carrier Noridian would be barred from supervising obstetric ultrasound, 

simply because they are not radiologists. The Medicare carrier in Wisconsin is 

considering similar restrictions for mobile imaging units. 

Barring ob-gyns from performing ultrasound would clearly harm patient care. It 

also offers no protection from cost increases. The MRI, CT, and PET utilization growth 

in IDTFs far outpaces the utilization growth of these services in physicians’ offices. 

MedPAC found that Medicare spending for IDTF services (mainly CT and MRI) nearly 
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doubled between 2000 and 2002, from $385 million to $741 million.18 Medicare 

spending for all imaging services paid under the physician fee schedule grew at half that 

rate during the same period. MedPAC further found that Medicare spending for IDTF 

services grew by almost 40 percent per year, on average, during this period—a growth 

rate that cannot be explained due to the conservative growth in the number of new IDTFs. 

Adjusting the Medicare Allowances for Use of Equipment and Interest Rates 

In part of its calculation of the capital costs of equipment, Medicare assumes that 

imaging equipment is in use 50% of the time. CMS and MedPAC are investigating 

whether this assumption should be changed to a higher rate, a change ACOG would 

oppose. Ultrasound services are one element of the clinical care provided by physicians 

whose primary occupation is direct patient care - i.e. surgical procedures and office 

visits. Ultrasound equipment remains idle when physicians are engaged in other patient 

care activities, lowering its overall use rate. Breast surgeons, for example, will often 

have an ultrasound unit in their office for use on the one day a week that they perform 

ultrasound-guided needle biopsies and ultrasound-guided cyst aspirations in their offices. 

MRI and CT, on the other hand, are more often used in a radiology practice setting where 

imaging is the only type of care provided, and unlikely to sit idle during business hours. 

Given this use model for ultrasound equipment, we recommend that Congress direct 

CMS to maintain the 50% utilization rate for ultrasound equipment in order to maintain 

access to these important services for Medicare beneficiaries, even if CMS decides to 

change the utilization rate for other types of imaging equipment. 

CMS indicated in its 2007 Medicare Physician Fee Schedule Notice of Proposed 

Rulemaking regarding practice expense that it currently utilizes an interest rate of 11% in 

calculating the cost of capital for medical equipment purchases. MedPAC, using 

commercial loan rates rather than medical equipment loan rates, argued during its April 

2006 meeting that this rate is overly generous. Data obtained from Key Equipment 

Financing supports the accuracy of Medicare’s current interest rate allowance. The last 

several years have seen historically low interest rates. During this time period the interest 

rate on the ultrasound equipment has ranged from 8%-10% (depending on the term and 

structure). In the last six months the low interest environment has changed, with the 

Federal Reserve Board boosting rates several times. As a result, rates have increased to 

9%-11%. Before making any change on this interest rate, MedPAC or CMS should 

investigate the issue more fully by surveying a range of medical equipment financing 

companies. 

Conclusion 

Physicians in many specialties are trained in ultrasound from day one of their 

residency. ACOG and other specialty societies have shown leadership in developing 

appropriateness criteria and getting it into practice, and evidence of appropriateness 

shows that these efforts are working. Growth in ultrasound is low and driven by factors 

largely out of a physician’s control, such as the increase in incidence of chronic disease 

and the tort climate. Setting it apart from other imaging services, ultrasound has a high 

record of safety, is fully integrated in day-to-day patient care, and is saving our health 

care system money every day through early detection and fewer invasive procedures. 

A distinction between ultrasound and the rest of the imaging field is warranted. We 

urge the Congress, in any legislation, to recognize the safety, quality and appropriateness 

of ultrasound studies and to exempt ultrasound from any new restrictions on imaging use, 

federal quality standards, or additional administrative burdens. 

MR. DEAL. Thank you. 

 

18 MedPAC June 2004 Data Book. 
111

 Dr. Griffeth. 

DR. GRIFFETH. Thank you, Chairman Deal and the distinguished 

members of this subcommittee for this opportunity to address the 

subcommittee and discuss the critical role of imaging in cancer care. As 

the Director of Nuclear Medicine at Baylor University Medical Center in 

Dallas, the Medical Director of the North Texas Clinical PET Institute, 

and the National Medical Director for PET for U.S. Oncology, I spend 

about 95 percent of my time focused on oncology patients and oncologic 

imaging. I have been asked specifically to address the utilization of 

advanced medical imaging, in particular, positron emission tomography, 

or PET scanning in the management of cancer patients. 

 But first, let me summarize that the growth of imaging utilization 

over the past several years is, in fact, saving the Government and other 

payers significant sums of money, improving the quality of healthcare, 

and allowing millions of Americans to lead longer, more productive 

lives. This is not just an evolution of technology; it is an evolution of 

patient care. 

 Advanced medical imaging is expensive, but medical imaging is 

absolutely crucial for the early detection, therapy selection, and followup of cancer patients. Let me stress this: if you or a family member is 

diagnosed with a life-threatening cancer tomorrow, it is virtually certain 

that the selection of your treatment and the follow-up of that treatment 

will be governed by advanced medical imaging. An imaging test such as 

a PET or PET CT scan can easily cost $2,000, but the therapy for a 

cancer patient can very quickly exceed $100,000. Medical imaging is 

absolutely critical to the selection and the targeting of those expensive 

therapies. Cost-effectiveness studies in various cancers have shown that 

utilization of PET or PET CT in appropriate circumstances can mean 

billions of healthcare dollars saved in this country per year. 

 But I am not here to focus on cost savings. Imaging quite simply 

provides better patient care. For example, PET CT imaging can prevent 

up to half of the futile surgeries that are performed for what turns out to 

be unresectable lung cancer. Substituting a $2,000 non-invasive imaging 

test for a $20,000 major surgery in a terminally ill patient makes good 

fiscal and clinical sense. The rise in utilization is overwhelmingly a 

positive occurrence for patients, as well as for healthcare budgets, and is 

due mostly to oncologists becoming more familiar with this vital new 

tool. Utilization will and should continue to increase as this physician 

education is ongoing. 

 It is clear that even with the very stringent criteria set out by CMS 

for utilization of appropriate PET in appropriate patients, less than half of 

those who qualify for a PET scan are actually getting that PET scan. 

CMS is losing hundreds, if not thousands, of dollars on each of those 
112

patients that is not getting an appropriate PET scan, because that patient 

is therefore at risk for other needless and expensive procedures. In fact, 

CMS has always limited utilization of PET and dramatically limited 

over-utilization by imposing strict limitations on when a patient is even 

eligible to have a PET scan. Recently in recognition of the fact that these 

limitations are impeding both the appropriate care of many patients and 

our ability to learn more about when PET should be used in these 

patients, CMS has worked with the Academy of Molecular Imaging to 

establish the National Oncologic PET Registry, which allows for some 

expansion of the guidelines for use of PET in these patients and 

collection of data regarding PET’s impact on patient management. This 

is a shining example of how CMS can work together with the imaging 

and oncology communities using what is commonly called evidencebased medicine to ensure appropriate future utilization. Several peers 

have also established guidelines regarding how often a cancer patient can 

have a follow-up PET scan. Some of these are unrealistic. Recently, I 

have been working with a group assembled by Dr. Mitchell Burkin of 

Trailblazer Healthcare aimed at establishing appropriate frequency 

guidelines for these patients, and I believe his approach could be 

duplicated on a larger scale by CMS. 

 In my opinion, collaborative efforts, such as those that I just 

mentioned, form the best way to balance optimal patient care with fiscal 

responsibility. Drastic reimbursement cuts will not decrease healthcare 

expenditures. They will limit access to advanced imaging tests like PET, 

and they will tend to push cancer care services back into the major 

medical center. This will lead to more expensive, less convenient, less 

integrated, and less effective patient care. Access to medical imaging 

must keep pace with advances in cancer therapy. To better see disease is 

to better treat disease. CMS should continue to work with imaging and 

oncology experts to develop appropriate management guidelines that 

includes and depends heavily upon advanced imaging. 

 I appreciate your attention and I look forward to any questions. 

 [The prepared statement of Dr. Landis Griffeth follows:] 

PREPARED STATEMENT OF DR. LANDIS GRIFFETH, DIRECTOR, NUCLEAR MEDICINE, BAYLOR 

UNIVERSITY MEDICAL CENTER

Thank you, Mr. Chairman and distinguished members of the panel for giving me 

this opportunity to discuss the critical role of imaging in cancer care. My name is Dr. 

Landis Griffeth. I am the Director of Nuclear Medicine at Baylor University Medical 

Center in Dallas. I also serve as the Medical Director for the North Texas Clinical PET 

Institute and, for the past 6 years, the National Medical Director for PET for US 

Oncology. 

My discussion today focuses on the use of advanced medical imaging, Positron 

Emission Tomography (PET) in particular, in the management of cancer patients. 

However, I want to make it clear that most of what I am saying extends to the treatment 
113

of the other major diseases that take millions of American lives each year, such as cardiac 

or neurological diseases. 

Turning to the role of imaging in cancer, it is important to consider several facts: 

• 42 % of Americans will develop a significant cancer. 

• 52% of those (almost 600,000 a year) will die from their cancer. 

• Death rates from the four most common cancers—lung, breast, prostate and 

colorectal—continue to decline. Over the past decade, Americans have 

experienced a 7% decline in mortality from cancer and hundreds of thousands 

of lives have been saved—and imaging has played an important role in this 

progress. 

• Imaging is used to diagnose, treat, manage, and predict disease. 

• Many cancer patients will have their cancers detected or diagnosed by medical 

imaging. 

More importantly, virtually 100% of cancer patients will have their treatment 

options determined by the results of one or more advanced imaging tests, and a large 

percentage of those patients will need multiple types of imaging tests and/or sequential 

imaging tests over time, to determine how well treatment has worked or whether tumor 

has recurred. Let me restate this – if you or a family member is diagnosed with a lifethreatening cancer tomorrow, it is a virtual certainty that the extent of your disease, the 

treatment of your disease, and the assessment of whether or not that treatment worked 

will depend heavily on one or more advanced imaging tests. 

The role of imaging in cancer care, in simple terms, is to diagnose and localize 

tumors, so that optimal decisions can be made about whether and how to pursue surgery, 

radiation therapy, chemotherapy, or any of the other extremely sophisticated therapeutic 

modalities that are now being developed at an encouraging pace. 

The good news is that, over the past 40 years, along with dramatic advances in 

cancer treatment strategies, there has been an explosion of technological advances in 

imaging that have dramatically improved cancer patient care. These advances have led to 

earlier detection of cancer, when it is most easily and successfully treated, better selection 

of the appropriate therapies for each individual patient, better targeting of specific types 

of therapy, such as radiation therapy and minimally invasive surgeries, and better followup of cancer patients after therapy. Advanced imaging techniques such as mammography, 

sonography, CT, MRI, Nuclear Medicine and PET have played a huge role in helping us 

achieve better patient care, higher cure rates for limited cancers, and longer – and more 

productive – survival for patients with more extensive cancers. 

While many of these new imaging techniques are expensive, we must consider the 

costs of imaging relative to the costs of treating cancer without the information that 

imaging provides and also with an eye to the efficacy of treatment without that vital 

information. 

An imaging test, such as a PET or PET/CT scan may cost $2000 or so with the 

current payment schedule – clearly a lot of money. Surgery, radiotherapy, and 

chemotherapy for a cancer patient can very quickly exceed $100,000 – clearly 

significantly more money – and that is without some of the newer and more expensive 

treatment modalities, such as bone marrow transplantation. One paper published last year 

in the journal Cancer Biotherapy and Radiopharmaceuticals, studying patients evaluated 

for colon cancer that had spread to the liver, showed that incorporating PET into the 

work-up of these patients saved $5,269 per patient. In the US, there are 7000 colon 

cancer patients in this particular clinical situation. If all 7000 of these patients underwent 

PET imaging, this would save $37M. In patients undergoing initial staging evaluation of 

non-small-cell lung cancer, the global savings would be $267M (in 2003 dollars). Now I 

realize that $37M, or even $267M, is a very small amount compared to the types of 

budgets that you folks look at every day, but this is for two small subsets of the patients 
114

in this country with cancer and, once again, shows that limiting access to advanced 

imaging is penny-wise and pound-foolish. 

How do PET and other advanced imaging techniques save money? - Typically by 

showing that another costly procedure, like surgery or radiotherapy, is not indicated, or 

can be better targeted to improve patient results. The most extreme case would be a 

patient who is thought to have operable cancer, based on other tests, but in whom PET 

shows that the tumor has spread to other organs. The fact is that advanced imaging like 

PET helps make sure patients are treated appropriately. 

This isn’t just important from a cost-savings perspective; it is simply better patient 

care. The last thing any patient needs is surgery, radiotherapy, or chemotherapy that is 

either unnecessary or ineffective. For example, PET imaging can prevent up to half of the 

needless surgeries performed for lung cancer that is thought to be resectable, but, in fact, 

is not resectable. Imagine if you had inoperable metastatic cancer and only had six 

months to live. Would you rather have a $2000, non-invasive PET/CT scan that told you 

that it was inoperable, so that you could make the most of the time you had left, or would 

you rather spend a good part of your last six months recovering from a major surgery that 

cost $20,000 and that, in the end, didn’t do you any good at all? 

In addition, as cancer treatments become more expensive or more toxic to the 

patient, we need to be able to determine DURING therapy, preferably EARLY during 

therapy, whether that treatment is working or whether we should switch to a different 

type of therapy. To pursue a cancer treatment that is not working not only wastes 

thousands and thousands of dollars, but exposes the patient to needless side effects of 

treatment and, most importantly, delays the switch to another, hopefully more effective, 

type of therapy. In most tumors, imaging techniques like PET are the best means we have 

to determine whether a given treatment is working or not. 

Moreover, as our treatments become more sophisticated, whether we are talking 

about better and better targeting of radiotherapy beams to avoid damage to non-tumor 

tissue or highly advanced types of gene therapies that very precisely target specific types 

of tumor cells, we simply cannot aim those big guns of cancer therapy correctly without 

the appropriate imaging techniques, whether they be CT, MRI, Nuclear Medicine, PET, 

or some combination of the above. 

We also cannot forget that many cancer patients actually DIE from their treatments 

and from complications relating to their treatments, rather than from their disease. That is 

an unfortunate sequela of the need to use potentially very toxic agents to kill tumor cells. 

It is imperative that we use the best tools we have to allow us to target and refine those 

treatments. 

I have been asked specifically to address the rise in utilization, and possible overutilization, of PET and PET/CT, and to suggest ways to manage that utilization. My own 

impression is that the rise in utilization is a positive occurrence for patients, as long as it 

is appropriate utilization. I want to stress that increases in imaging utilization arise 

primarily from advances in patient care and not inappropriate use and are, in large part 

due to oncologists becoming more familiar with the use of PET in patient management. 

The large majority of medical oncologists and radiation oncologists currently practicing 

were not exposed to this relatively new modality during their training, and it sometimes 

takes a while for even very smart old dogs to learn new tricks. However, over time, when 

offered a tool that can be demonstrated to be more effective, and more cost-effective, at 

helping them make these life and death patient decisions, these physicians will, of course, 

adopt and utilize that tool. 

Another factor in PET’s growth has been the increased availability of this equipment 

– which not long ago was confined to major medical centers – in medium and small 

communities. I believe that this trend is bound to occur with any new and improved 

treatment or diagnostic tool, it’s just that the growth curve is slower for complicated, 
115

sophisticated modalities than it is for something that is easy to explain and distribute, 

such as a new antibiotic. 

It should not be a surprise that the utilization of PET imaging has continued to grow 

rapidly over the past several years. It takes time to disseminate the knowledge and 

equipment necessary for appropriate utilization. In fact, even when we use the very 

stringent criteria developed by CMS for determining eligibility for a PET study, as well 

as VERY conservative estimates for the number of patients who will need a follow-up 

study to assess for effectiveness of treatment or for suspicion of a recurrence, far less than 

half of those patients who would probably benefit from a PET study are currently getting 

that PET study. Based on the cost-effectiveness projected for these PET studies, CMS is 

losing hundreds if not thousands, of dollars on each patient who does not get an 

appropriate PET scan, because that patient is, therefore, potentially at risk of undergoing 

other needless, expensive procedures. It is important to understand that imaging 

technologies detect cancer early, enable less-invasive cancer diagnosis and treatment, 

foster more effective cancer management, produce efficiencies and savings in cancer 

care, and, in many instances, keep workers more productive. 

There also has been concern expressed over the “escalation of technology and 

expense,” such as from CT to PET to PET/CT. This process is not just an evolution of 

technology, but an evolution of patient care. Sometimes, the benefits of this evolution, 

while clinically evident, are hard to quantify. For example, most studies, depending on 

the tumor type, show that combined-modality PET/CT scanning will provide answers that 

may range from 5-30% more accurate than separate PET and CT scans. But, the 

CONFIDENCE in the answer provided by this new technology can be up to 50% higher. 

When medical oncologists and radiation oncologists have greater confidence in the 

accuracy of these types of results, they can be more aggressive in their clinical decisions 

and treatments, they can spend less time and money with “second-guessing” procedures, 

and they can deliver better therapies that have a greater chance of killing the tumor cells 

and a lesser chance of needless side effects. Thus with the increased confidence of 

evolving imaging technology, oncologists provide better and safer treatment. Moreover, 

now that we have the appropriate tools to monitor tumor activity, we are seeing more 

rapid development of improved therapies, such as highly targeting radiation therapies and 

novel molecular approaches to cancer therapy, such as gene therapies or immunologic 

therapies. 

As I just mentioned, CMS, as the hallmark of payer reimbursement has, in fact, 

limited utilization and dramatically limited over-utilization by imposing strict clinical 

guidelines for when a patient is and is not eligible for a PET study. CMS has recently 

acknowledged that those guidelines, in fact, are impeding both the appropriate care of 

many patients and the ability of the PET community, the oncologic community, and CMS 

to learn more about which patients should and should not undergo PET imaging. CMS 

has worked with the Academy of Molecular Imaging, the American College of 

Radiology, and others to address this problem by establishing the National Oncologic 

PET Registry, which allows for some expansion of the guidelines under which PET 

studies can be performed for Medicare’s cancer patients, provided that data regarding the 

impact of PET on patient management are collected. This allows us and CMS to take an 

organized approach to expanding the use of a new modality into new patient conditions 

while gathering data to determine whether the new modality actually changes patient 

management and is, therefore, worthy of continued reimbursement for those conditions. 

This is a shining example of how the imaging community, the oncology community, and 

CMS can work together, using what is commonly called “evidence-based medicine” to 

ensure that a relatively expensive test is made available to patients who will benefit from 

it, while still limiting its use to appropriate situations. 

In addition, several payers have also established frequency guidelines, based on the 

concern that repetitive testing is adding more cost than benefit to the patient care 
116

equation. Some of those have been reasonable, while some, in my opinion, have not been 

adequately vetted in the real world of patient management. Recently, I have been 

involved in a PET stakeholder work group assembled by Dr. Mitchell Burken of 

Trailblazer, one of CMS’s carriers, aimed at establishing appropriate frequency 

guidelines for various cancer conditions and patient situations, and I believe his approach 

should be duplicated on a larger scale within CMS. What I need to stress is that such 

clinical guidelines MUST be developed with input from the folks on the front lines: 

medical oncologists and radiation oncologists who are treating the patients and imaging 

physicians experienced in the use of PET in patient management. I would extrapolate 

those last comments to other imaging modalities. 

While thoughtful, collaborative efforts such as those I just described are, in my 

professional opinion, the appropriate way to balance proper patient care with sound 

fiduciary responsibility, I don’t see how the drastic spending cuts called for in the Deficit 

Reduction Act of 2005 will stop the inappropriate use of medical imaging. I am 

concerned that this legislation will deny access to the medical procedures that Medicare 

patients need. I admit to you today that I am not a businessman. I pursued a career in 

science and medicine, in part, to AVOID having to deal with business and finance. What 

I DO know is that the impetus, by both CMS and caregivers, over the past 15 years has 

been to push cancer care out into the community, while maintaining state-of-the art 

quality. This is good for the patients, who no longer have to drive long distances during 

their very serious illnesses for their diagnostic and therapeutic procedures. This is good 

for CMS and other payers, because community-based care is typically less expensive 

than care delivered in large medical centers. We believe that the drastic cuts in imaging 

reimbursement, particularly for PET and PET/CT, contained in the DRA constitute a 

serious threat to cancer care in the community. The estimates of the PET community are 

that the reimbursement cuts contained in the DRA could result in half of the non-hospitalbased PET and PET/CT providers closing their doors, because they would be operating at 

a substantial loss. The net effect will surely be to push cancer care services back into the 

large hospital setting, translating into greater inconvenience and difficulty for patients 

and their loved ones and more expense for the healthcare system. Even worse, there are 

many patients who simply will not undergo advanced imaging tests like PET, because 

they are unwilling or unable to travel to a distant imaging center or because the lack of 

proximity means that their community physicians will remain unfamiliar with this lifesaving technology. 

We believe these cuts in reimbursement are arbitrary, and attempt to balance far too 

much of the overall healthcare budget on the small percentage that represents imaging. 

We also believe that there ARE no reliable cost data available by which to justify these 

cuts. The Academy of Molecular Imaging is currently trying to collate such data for PET 

and PET/CT and, at the very least, these drastic cuts should be delayed until reasonable 

and reliable cost data for both hospital and community outpatient care delivery systems 

can be gathered and analyzed. 

In January 2000, the editorial board of the New England Journal of Medicine listed 

medical imaging as one of the eleven most significant medical advances of the past 1000 

years, ranking on a par with the development of antibiotics and the elucidation of human 

anatomy and physiology. 

The advancement of imaging science, and the ability of cancer patients in all 

communities across America to access these imaging techniques, must keep pace with the 

advances in cancer therapy. Optimal cancer care is absolutely dependent on optimal 

imaging care. To better SEE disease is to better TREAT disease, and the best treatments 

in the world may be useless if they are not targeted appropriately. To take our American 

cancer patients, who otherwise have access to the finest cancer care in the world, and 

restrict their access to high-quality imaging services such as PET, is the medical 
117

equivalent of putting them in a very expensive, very fast, sports car – and then bashing 

the windshield with a ball-peen hammer. 

Simply put, Draconian, across-the-board cuts in imaging reimbursement are NOT an 

effective way to cut overall healthcare costs. CMS should, instead, continue to work with 

experts in the related imaging and patient-care subspecialties to develop appropriate 

guidelines for patient management – management that includes, and depends upon, 

advanced medical imaging. 

Mr. Chairman, thank you again for allowing me the opportunity to address you and 

your distinguished colleagues on this important issue. 

 MR. DEAL. Thank you. 

 Mr. May. 

MR. MAY. Thank you. Mr. Chairman and members of the 

committee, my name is Lynn May. I am Chief Executive Officer of the 

American Society of Radiologic Technologists. Thank you for this 

opportunity to contribute to this important dialogue on the quality, safety, 

and cost of imaging services. 

 The ASRT represents more than 121,000 radiologic technologists, 

the healthcare professionals who perform medical imaging. Radiologic 

technologists work closely with physicians in a variety of medical 

settings, ranging from cardiac cath labs in hospitals to outpatient X-ray 

clinics. The images they produce help physicians diagnose disease, 

detect injury, and direct treatment. 

 Radiologic technologists operate some of the most complex 

equipment in the medical field, including MRI units, CT scanners, and 

gamma cameras. However, this amazing technology is ineffective in the 

wrong hands. That is because the quality of a medical image is directly 

linked to the skill of the person performing the exam. Individuals must 

have extensive education to perform exams correctly. Accurate medical 

imaging leads to accurate diagnoses, which leads to better outcomes for 

patients. 

 Unfortunately, tens of thousands of people who perform medical 

imaging in this country are not really qualified to do so. They have no 

formal education in the field, and they have no certification or license in 

the profession. That is because Washington, D.C. and nine other States 

do not regulate people who use diagnostic medical imaging equipment. 

In some States, a person can go from operating a forklift on one day to 

operating CT scanners in the next, with no training in between. And 

even in States where there are regulations, they vary so widely that there 

is no guarantee personnel are qualified. In many places, a hairdresser is 

more highly regulated than a nuclear medicine technologist. 

 Lack of Federal minimum standards for operators of equipment 

poses a danger to patients; that is why the ASRT, the Alliance for 

Quality in Medical Imaging and Radiation Therapy, and a large number 

of other organizations support the passage of the Consumer Assurance of 
118

Radiologic Excellence, or CARE bill. I would like to thank 

Representative Pickering and Doyle for demonstrating their commitment 

to quality healthcare by introducing the CARE bill, H.R. 1426. The bill 

currently has 129 cosponsors, and it sets Federal minimum standards of 

education and credentialing for non-physician personnel who perform 

medical imaging examinations. To receive reimbursement from Federal 

healthcare funds for imaging procedures, States would need to regulate 

technologists according to these standards. 

 The CARE bill will improve medical imaging in three ways. First, 

the bill will improve quality. Patients rely on medical imaging for 

diagnosis, treatment, and cure, but any imaging procedure is only as 

effective as the person performing it. An exam won’t reveal a broken 

bone or a diseased organ if the person using the equipment doesn’t know 

the basics of anatomy, exposure, and technique. Poor quality exams can 

lead to additional testing, delays in treatment, and unnecessary anxiety 

for the patient. The Mammography Quality Standards Act proves that 

the establishment of personnel standards improves patient outcome. 

Under MQSA, people who perform X-ray exams of the breast must meet 

education credentialing and experience requirements. A study in 

Michigan concluded that breast cancer detection improved by one-third 

with the quality program that included educated and credentialed 

mammographers. 

 The CARE bill would not alter MQSA anyway, but the bill will 

ensure quality for all types of medical imaging exams, not just 

mammograms. People undergoing tests to diagnose a brain tumor 

deserve the same guarantee of quality that MQSA offers women 

undergoing mammography. 

 Second, the CARE bill will improve safety. When an X-ray exam 

has to be repeated because of improper technique, the patients receive 

double the radiation dose. Overexposure to radiation, as we know, can 

cause cancer, shorten lives, and cause birth defects in future generations. 

Taking an X-ray or a CT scan involves much more than pushing a 

button. Patients could be injured or even killed if the equipment is not 

properly used. 

 Third, the bill will reduce healthcare costs. More than 300 million 

medical images are performed in the United States every year. On 

average, 5.5 percent of these procedures have to be repeated. This means 

that thousands of defective medical images are being produced every 

day, and the Federal government pays for many of these mistakes. 

Medicare spent approximately $9.3 billion on medical imaging in 2003. 

If we can reduce the number of repeated exams by just one percent, 

Medicare would save well over $90 million a year. 
119

 Last year, as we know and as we have heard, the Medicare Payment 

Advisory Commission recommended the establishment of standards for 

personnel who perform medical imaging. The MedPAC report stated, 

“Establishing standards for medical imaging services would increase 

diagnostic accuracy and reduce the need for repeat tests, thereby 

improving the quality of care and helping to control Medicare 

expenditures.” 

 The safety, quality, and cost of medical imaging procedures affects 

us all. Only competent personnel should be allowed to perform these 

procedures. H.R. 1426, the CARE bill, will ensure a minimum level of 

education, knowledge, and skill for those non-physician personnel who 

are responsible for medical imaging. 

 On behalf of the ASRT and the millions of patients that members of 

the ASRT serve, I ask this committee to move this legislation forward. 

Thank you. 

 [The prepared statement of F. Lynn May follows:] 

PREPARED STATEMENT OF F. LYNNE MAY, CHIEF EXECUTIVE OFFICER, AMERICAN SOCIETY 

OF RADIOLOGIC TECHNOLOGISTS

Mr. Chairman and members of the Committee, my name is Lynn May, and I am the 

chief executive officer of the American Society of Radiologic Technologists. On behalf 

of ASRT’s members, thank you for the opportunity to contribute to this dialogue on the 

quality, safety and cost of medical imaging procedures. 

The ASRT represents more than 121,000 radiologic technologists, the health care 

professionals who perform medical imaging examinations. Radiologic technologists are 

non-physician health professionals. They work closely with physicians in a variety of 

medical settings, ranging from imaging departments and cardiac cath labs in hospitals to 

outpatient x-ray clinics. The images radiologic technologists produce can be the best tool 

a physician has to diagnose disease, detect injury and direct treatment. 

Radiologic technologists operate some of the most complex equipment in the 

medical field, including MRI units, CT scanners and gamma cameras. However, this 

amazing technology is ineffective in the wrong hands. That’s because the quality of any 

medical image is directly linked to the skill and competence of the person performing the 

exam. Individuals must have extensive education and training to perform the exam 

correctly. Accurate medical imaging leads to an accurate diagnosis, which leads to a 

better outcome for the patient. 

Unfortunately, tens of thousands of people who perform medical imaging in this 

country are not qualified to do so. They have no formal education in the field, and they 

have no certification, license or credential in the profession. That’s because Washington, 

D.C., and nine states around the country do not regulate the people who use diagnostic 

imaging equipment. In some states, a person can go from a job operating a forklift one 

day to a job operating a CT scanner the next, with no training in between. And even in 

states where there are regulations and laws, they vary so widely that there is no guarantee 

that personnel are qualified. In many places, a hairdresser is more highly regulated than a 

nuclear medicine technologist. 

The lack of a minimum educational and credentialing standard for operators of 

imaging equipment poses a danger to American patients. That’s why the ASRT and 30 
120

other health, science and patient organizations support the passage of the Consumer 

Assurance of Radiologic Excellence bill, or CARE bill. 

 I would like to thank Representative Pickering for demonstrating his commitment to 

quality health care by introducing the CARE bill, H.R. 1426. The bill currently has 129 

cosponsors. The bill sets minimum federal standards of education and credentialing for 

the personnel who perform medical imaging examinations. To receive reimbursement 

with federal health care funds for imaging procedures, states would be responsible for 

regulating technologists according to those standards. 

 The CARE bill will improve medical imaging in three important ways. 

• First, the CARE bill will improve quality. Doctors and patients rely on medical 

imaging for accurate diagnosis, treatment and cure. But any imaging procedure is only as 

effective as the person performing it. An exam won’t reveal a broken bone or a diseased 

organ if the person using the equipment doesn’t know the basics of anatomy, exposure 

and technique. Poor quality exams can lead to additional testing, delays in treatment and 

unnecessary anxiety for the patient. 

The Mammography Quality Standards Act is evidence that this approach works. 

Under MQSA, the personnel responsible for performing x-ray examinations of the breast 

must meet educational, credentialing and experience requirements. A study in Michigan 

concluded that breast cancer detection improved by one-third with a quality program that 

included educated and credentialed mammographers.1

 

The ASRT supports MQSA. The CARE bill would not alter MQSA in any way. But 

the CARE bill will ensure quality in ALL types of imaging exams, not just 

mammograms. Of the millions of medical imaging tests performed every year in the 

United States, only 10 percent of them are mammograms covered by MQSA. People 

undergoing general x-ray exams to detect pneumonia or MR scans to diagnose a brain 

tumor should have the same guarantee of quality that MQSA offers to women undergoing 

mammography. 

• Second, the CARE bill will improve safety. When an x-ray exam has to be 

repeated because of improper positioning or poor technique, the patient receives double 

the radiation dose. Overexposure to radiation can cause cancer, shorten lives and cause 

birth defects in future generations. A June 2005 Public Health Service report listed 

radiation as a carcinogen and concluded that: “there is no dose of radiation, however low, 

that can be deemed completely safe.”2

 Medical radiation should always be used 

judiciously and only when the benefit to the patient outweighs the risk. Taking an x-ray 

or CT scan involves much more than just pushing a button. Patients could be injured or 

even killed if this equipment is not used properly. 

• And third, the CARE bill will reduce health care costs. Repeated imaging 

examinations cost the U.S. health care system millions of dollars annually in needless 

medical bills. More than 300 million medical imaging procedures are performed in the 

United States every year. If just one-half of one percent of those images is performed 

improperly, more than 4,000 defective medical images would be produced every single 

day. And the federal government pays for many of those mistakes. Medicare spent 

approximately $9.3 billion on medical imaging in 2003. The average repeat rate for 

imaging exams is 5.5 percent. If we can reduce the number to 4.5 percent, then Medicare 

would save more than $90 million a year. 

In March of last year, the Medicare Payment Advisory Commission issued a report 

that recommended the establishment of standards for personnel who perform medical 

imaging. The MedPAC report stated, “Providers vary in their abilities to perform quality 

imaging procedures. Poor-quality studies can lead to repeat tests, misdiagnoses, and 

improper treatment. Establishing national standards for imaging services would increase 

diagnostic accuracy and reduce the need for repeat tests, thereby improving quality of 

care and helping to control Medicare spending.”3
121

The safety, quality and cost of medical imaging procedures affects us all. Only 

competent personnel should be allowed to perform these procedures. H.R. 1426, the 

CARE bill, will ensure a minimum level of education, knowledge and skill for those who 

are responsible for medical imaging. On behalf of 121,000 ASRT members and the 

millions of patients they serve, I ask the committee to move this bill forward. 

Thank you. 

References

1. Fintor L, Brown M, Fischer R, et al. The impact of mammography quality 

improvement legislation in Michigan: implications for the national mammography 

quality standards act. Am J Public Health. 1998;88:667-671. 

2. U.S. Department of Health and Human Services, Public Health Service, National 

Toxicology Program. Report on Carcinogens, Eleventh Edition. Washington, D.C.; 

2005. 

3. Medicare Payment Advisory Commission. Report to the Congress: Medicare 

Payment Policy. Washington, D.C.; March 2005. 

 MR. DEAL. By the end of the year. I am sure that request was Mr. 

Pickering’s as well. 

 Mr. Baumgartner, you are recognized. 

MR. BAUMGARTNER. Chairman Deal, Congressman Pallone, 

distinguished members of the subcommittee, I am the CEO for Center for 

Diagnostic Imaging. I am pleased to be here on behalf of the National 

Coalition of Quality Diagnostic Imaging Services. 

 NCQDIS is a national nonprofit organization representing 2,400 

outpatient imaging clinics and independent diagnostic facilities, 

otherwise known as IDTFs. I applaud the subcommittee for addressing 

this topic. NCQDIS believes that appropriate imaging utilization is 

vitally important. We define appropriate utilization as the right 

procedure at the right time, done right. 

 Our coalition has been actively engaged with CMS, recommending 

criteria to improve quality, reduce improper utilization, and better align 

Federal quality standards with those in the private sector. Above all, we 

appreciate that the focus of this committee is on ensuring the highest 

value in the services provided to the Nation’s Medicare and Medicaid 

beneficiaries. 

 The good news is is that the savings can and should be achieved 

through appropriate utilization, while at the same time improving 

outcomes for beneficiaries through improved quality. We do not believe 

that the across the board reduction in payments as mandated by the DRA 

is the right approach. 

 For our members, such as my company, CDI, commitment to 

consistent quality standards and appropriate utilization has been critical 

to our success. It is important to note that as IDTFs, we rely on referrals 

from physicians. We cannot create our own demand for our services. 

We must prove to referring physicians and their patients that we are 
122

worthy of their referrals. We believe this gives us a unique clinical 

perspective on appropriate utilization. 

 Today, I would like to focus on three primary recommendations. 

 First, we recommend that all diagnostic imaging providers be 

required to meet quality standards already set by CMS for IDTFs. I 

would like to cite for the committee a few examples. Unlike hospitals, 

IDTFs and physician offices are required to have physician supervision 

of all imaging procedures. IDTFs, unlike hospitals and physician offices, 

are required to have radiologists as supervising physicians, in some 

cases, Board-certified radiologists. In addition, IDTFs are required to 

have non-physician personnel be certified technologists, and 

furthermore, have written physician orders, unlike hospitals or physician 

offices that do not have to meet this criteria. 

 NCQDIS recommends that these quality standards established by 

CMS for IDTFs be applied to all outpatient imaging operations. Raising 

the quality bar across the board will protect beneficiaries from nonqualified imaging facilities, reduce repeat examination, and improve 

overall quality of care to the Medicare beneficiaries. 

 Our second recommendation is the continued support of public and 

private-sector efforts and setting consistent quality standards and 

addressing utilization. Private payers are taking action by implementing 

minimum quality guidelines and employing radiology benefit managers 

to make sure imaging is appropriately utilized. In addition, many States 

have sought to address utilization in imaging services. For example, 

Maryland does not permit non-radiologist physicians to refer to imaging 

equipment in which they have a financial interest. Other States have 

made it illegal for physicians to lease time on imaging equipment not 

located in their facility. Our members encourage these private-sector 

efforts and believe these steps will help ensure that beneficiaries receive 

a consistent standard of care, regardless of provider, and tests performed 

are medically appropriate. 

 Finally, NCQDIS supports a thorough analysis of imaging 

reimbursement as a critical component of value, recognizing that 

payment cuts will not reduce utilization and that attention to consistent 

quality standards will create better outcome for taxpayers and 

beneficiaries. By addressing utilization through rate cutting, rate cutting 

alone will have the unintended impact of encouraging providers who are 

able to control volume to increase referrals, thereby reducing any 

potential savings. Worse, rate cutting could lead to a lack of 

reinvestment in advanced imaging technologies, resulting in the use of 

old or ill-maintained equipment that produces poorer scans. The results 

will be missed or delayed diagnoses for beneficiaries, resulting in 

additional costs to Medicare. 
123

 I would like to point out that the NCQDIS members really have not 

seen this level of rate increase that others have seen. In fact, some of the 

major providers have shown a lack of growth completely, zero to 

negative growth in IDTFs. 

 Let me close by urging members of this subcommittee to support 

Congressman Pitts’ legislation, H.R. 5704, requiring a comprehensive 

look at imaging reimbursement policy before any payment cuts are 

implemented. 

 NCQDIS sincerely appreciates this opportunity to testify and 

welcomes any questions. 

 [The prepared statement of Robert V. Baumgartner follows:] 

PREPARED STATEMENT OF ROBERT V. BAUMGARTNER, CHIEF EXECUTIVE OFFICER,

CENTERS FOR DIAGNOSTIC IMAGING

Chairman Deal, Ranking Member Brown, distinguished Members of the 

Subcommittee, my name is Robert Baumgartner, and I am the Chief Executive Officer 

for Center for Diagnostic Imaging Inc. I am very pleased to be here today as a 

representative for the National Coalition of Quality Diagnostic Imaging Services 

(NCQDIS), of which am a member of their Board of Directors. 

NCQDIS is a non-profit organization, representing 2,400 outpatient imaging clinics 

and independent diagnostic testing facilities (IDTFs) throughout the United States. As 

described by Executive Director Cherrill Farnsworth, “NCQDIS and its members are at 

the forefront of medical technology, providing physicians and patients with the most 

state-of-the-art innovations, techniques and procedures available in diagnostic imaging.”1

I applaud the Subcommittee on Health for committing its time and resources to address 

today’s important topic. As you know, it has been well-documented by the Centers for 

Medicare & Medicaid Services (CMS) and private payers alike that imaging utilization 

and spending have been growing at a rate faster than other health care expenditures. 

NCQDIS and its members believe that appropriate imaging utilization is an issue for both 

the public and private sectors, and you will learn about some of this coalition’s related 

efforts today. 

Our goal is appropriate utilization: the right procedure, at the right time, done 

right. NCQDIS has been actively engaged with CMS on this topic, recommending 

certain criteria that we believe CMS should consider in improving quality in imaging, 

reducing improper utilization, and better aligning federal standards with those in the 

commercial sector. But above all, NCQDIS firmly believes that the focus of this 

Committee should be on ensuring the highest value in the services provided to the 

nation’s Medicare and Medicaid beneficiaries, and we believe that this can be done by 

providing clinically appropriate guidelines to all imaging providers that will have the net 

result of reducing over-utilization, and promoting the best possible care for beneficiaries. 

An across-the-board reduction in payments, as promulgated in the Deficit Reduction Act 

(DRA), without due consideration of the nuances of the imaging market and the resulting 

impact on beneficiaries will not improve quality or utilization and may, in fact, have the 

opposite effect. 

My company, CDI, has been a leading provider of outpatient imaging services for 

25 years. Our founder, Dr. Kenneth Heithoff, was one of the first physician pioneers to 

 

1

 U.S. H.R. Comm. on Ways and Means, Health Subcomm., Utilization of Medical Imaging. 109th 

Cong. (February 10, 2005) (taken from prepared written testimony of Cherill Farnsworth, Executive 

Director, National Coalition for Quality Diagnostic Imaging Services (NCQDIS)). 
124

advocate for more cost-effective, convenient and appropriate imaging services – and he 

did so originally by opening one of the first outpatient imaging centers in the country in 

1980. Since that time CDI has grown to now serve 14 communities in Minnesota, 

Wisconsin, Illinois, Indiana, Missouri, Kansas, Florida and Washington. We are pleased 

to have received this year the distinction of “Number One Freestanding Imaging Group” 

in the U.S. by the readers of Medical Imaging magazine, a leading, national industry 

publication. 

The principles of CDI are straightforward and unwavering: to deliver accurate, 

efficient diagnostic imaging services in an accessible and compassionate manner. To do 

so, we partner with specialized, board-certified, local radiologists in conjunction with 

community health systems, hospitals and physicians. For example, in St. Louis we have 

collaborated with St. Luke’s Hospital as well as with the St. Louis Cancer & Breast 

Institute. In Minnesota, we are working with the Mayo Clinic in a small city and with a 

rural county-owned hospital and surrounding physicians, as well as providing convenient 

access for patients in the three main population centers of the state. 

For CDI and other NCQDIS members, our commitment to consistent standards and 

appropriate utilization has always been critical to our success. As an independent imaging 

provider, we cannot create demand for our services. Let me underscore this point: the 

volume of procedures referred to NCQDIS members cannot be initiated or self-promoted, 

and we therefore represent an independent clinical viewpoint. We, like other IDTFs, must 

prove to referring physicians and their patients that we are worthy of their continued 

referrals. At CDI, we prove ourselves by maintaining a national, robust peer-review 

program, ongoing patient satisfaction surveys, sophisticated quality assurance initiatives, 

use of advanced imaging equipment, ACR accreditation of our MRI and CT scanners, 

electronic portal access to images and reports for referring physicians, and an insistence 

on radiologist specialization. Other NCQDIS members offer similar listings of service 

and quality indicators. 

I. Industry Overview: Trends and Types of Providers in Outpatient Imaging 

Before discussing specific utilization and quality topics, it is important to recognize 

the macro healthcare environment. Two significant national trends have and will continue 

to cause a natural and positive increase in diagnostic imaging utilization in the United 

States.

First, the use of imaging tests and procedures increases as we get older, and the 

‘Baby Boom’ generation continues to age. By 2010, it is estimated that this generation 

will constitute 79 million people in the U.S.2

 Appropriate use of imaging procedures will 

play a crucial role in the early detection and treatment planning for the medical needs of 

these beneficiaries, so that overall costs on repeat exams, incorrect/non-concise and/or 

late-stage diagnoses and complications are avoided. 

Second, demand for imaging services overall is also increasing due to advances in 

technology and applications. For example, new and less-invasive – yet efficacious and 

cost-effective – image-guided procedures are being developed and used as alternatives to 

costly and more invasive procedures like surgeries. Advanced applications, new contrast 

agents, refined scanners and new protocols are being brought to market and focused on 

specific medical specialties, benefiting patients with diseases or injuries such as cancer, 

neurological and cardiovascular diseases and musculoskeletal injuries (e.g. hips, knees 

and spines). As former Senator and Medicare Payment Advisory Commission (MedPAC) 

 

2

 Kimberly Scott, 2006 Diagnostic Imaging Industry Strategic Outlook: Market Trends & Analysis

(Wash. G-2 Reports 2005).
125

Commissioner Dave Durenberger recently noted, “Innovation is a value in healthcare and 

needs to be encouraged by policy.”3

The Outpatient Diagnostic Imaging Environment

To better understand the issue of imaging utilization, it is important to understand 

exactly who provides imaging services. Imaging services are delivered in a variety of 

ways to Medicare beneficiaries. 

First, an imaging procedure is performed only after a physician has evaluated a 

patient’s condition and produced an order (similar to a prescription) for a specific 

imaging procedure that he or she feels is necessary to aid in the patient’s diagnosis. The 

procedure has two components – the exam itself, and the radiologist’s interpretation. 

The imaging exam (the experience of the patient coming to the clinic and having the 

actual procedure done) is typically referred to as the “technical” component. Types of 

diagnostic imaging examinations include: 

• MRI (Magnetic Resonance Imaging); 

• CT or CAT (Computed Tomography); 

• PET or PET.CT (Positron Emission Tomography); 

• Ultrasound; 

• X-ray; 

• DEXA/Bone Densitometry; 

• Mammography; and 

• Nuclear Imaging. 

After the “technical” imaging procedure is complete, the images are then sent for 

interpretation to a radiologist, who studies the images and delivers a written report back 

to the referring physician with the results of the imaging examination. Radiologists are 

physicians who must complete an additional 4 to 6 years of education and internships 

after completing their medical degrees before being licensed as a general radiologist. 

Fellowship-trained radiologists are further trained in specific areas of the anatomy or on 

specific imaging equipment, and require another two years of fellowship training. 

Imaging equipment is owned, and technical services are provided by, a variety of 

sources. 

The major provider segments are: 

• Hospitals (both inpatient and outpatient); 

• Independent Diagnostic Testing Facilities (IDTFs); 

• Radiologist Offices; and 

• Non-radiologist Physician Offices. 

Hospitals typically provide both inpatient and outpatient imaging services at the 

hospital, and may also own imaging facilities geographically distant from the hospital 

campus to provide better community access. Hospitals are regulated facilities that provide 

on-site radiologists for required procedures and to supervise staff and assuring 

compliance with accreditation requirements such as JCAHO (Joint Commission on 

Accreditation of Healthcare Organizations). Hospitals provide imaging services for 

trauma patients, inpatient care and outpatients. Outpatient referrals come from on-staff 

hospital physicians, independent hospital physicians and community physicians. 

Independent diagnostic testing facilities (IDTFs), which NCQDIS represents, are 

imaging facilities that exist outside the hospital setting and are not physically located in 

physician offices. They may be owned by hospitals, radiologists or investors. IDTFs have 

 

3

 David Durenberger, Presentation, Defining the Medical Arms Race Syndrome (National Institute of 

Health Policy, July 13, 2006) (Minneapolis, Minn.). 
126

more rigorous federal regulations than other imaging providers; they must provide on-site 

radiologists for certain procedures, have qualified and certified technologists to operate 

the imaging equipment, and typically have their equipment certified by the American 

College of Radiology (ACR). Nationwide, there are approximately 5,000 IDTFs. As 

noted earlier, independent facilities, IDTFs cannot refer to themselves or create demand 

for their services. They provide service only after a physician has ordered an imaging 

procedure for his or her patient. IDTFs provide quick, convenient and high-quality access 

to imaging procedures that may not be available through the local hospital and generally 

provide same-day service for patients. 

Radiologists may or may not own imaging facilities. Oftentimes radiology groups 

practice inside the hospital to provide interpretation services and consultation to hospital 

physicians. In certain instances, the radiologist may own the imaging equipment in the 

hospital or at hospital-based facilities. A radiologist may also own an IDTF in partnership 

with hospitals and investors. Radiologists also provide interpretation services to IDTFs 

and physician-owned imaging equipment. By law, radiologists are deemed not able to 

refer patients, and are considered independent imaging providers since they do not 

examine patients and order imaging services. 

As a result of the in-office ancillary exceptions provided by Stark I and Stark II, nonradiologist physicians are able to install imaging equipment inside their offices or 

collaborate with other physicians to own or lease imaging equipment. In physician-owned 

imaging centers the primary source of referrals is from the physicians who own the 

equipment. Physician practices are not subject to the same requirements as IDTFs in 

terms of having a radiologist on site, nor are they required to have certified technologists 

as required for IDTFs. 

NCQDIS believes this information to be critical in discussing consistency in 

standards, in understanding where and how over-utilization is occurring, and in 

discussing reimbursement. 

II. Consistent Standards for All Imaging Providers: 

Assuring Value for Medicare and Medicaid Beneficiaries

NCQDIS and its members believe that the first step in consistent standards for all 

providers is the uniform application of IDTF regulations to all types of imaging 

providers. 

Effective July 1, 1998, Medicare regulations provided for the implementation of the 

new provider designation of independent diagnostic testing facility (“IDTF”)4

. The 

IDTFs replaced the previous provider category of independent physiological laboratory 

(IPL). IDTFs are to be independent of a physician’s office or a hospital, although either 

can apply to be an IDTF and therefore are not barred from meeting higher standards. 

The Medicare carriers are charged with determining that all IDTF applicants meet the 

IDTF standards as required by CMS prior to enrollment and granting an IDTF applicant a 

Medicare billing number. 

Arguably, the purpose of creating the IDTF classification was to ensure that 

diagnostic testing performed outside the traditional inpatient hospital or radiologist office 

setting met certain quality and safety standards, which also help to assure appropriate 

utilization. However, many believe that the Stark “in-office ancillary exception” has 

fostered the proliferation of imaging in physician offices, raising the question as to 

whether the goal of quality and safety has been achieved beyond the enrolled IDTFs. In 

fact, those entities that enroll and bill as an IDTF are disadvantaged from a competitive 

standpoint due to the regulatory requirements placed on the IDTF but not the other types 

of outpatient imaging entities. These include: 

 

4

 42 C.F.R. § 410.33. 
127

• Supervising Physician Requirement

 Currently Medicare Carriers are taking the position that, with limited exception 

for certain specialties, each supervising physician in an IDTF needs to be a 

radiologist. Some carriers have extended that definition to require boardcertified radiologists. The goal of the regulations is clearly to ensure that the 

“supervising physician” oversee the quality of the testing equipment and the 

technologists who will be performing the tests utilizing such equipment. 

However, the Carriers place no such supervising physician requirements upon 

non-IDTF imaging providers such as outpatient hospital facilities or physician 

office imaging facilities; 

• Non-Physician (Technologist) Requirements in the IDTF Setting 

The Medicare Carriers are given the authority to determine whether an imaging 

center technologist is qualified to conduct the diagnostic tests the IDTF is 

performing. Some Carriers have taken the position that such training and 

proficiency must be to the level of specific accreditation in the imaging 

modality in which the technologist is operating. This goes above and beyond 

state licensing or national credentialing of American Registry of Radiologic 

Technologists (“ARRT”). Thus, the Medicare beneficiaries who are receiving 

services in the IDTF setting are being treated by highly credentialed 

technologists under the supervision of radiologists. In other outpatient settings 

the technologists are not required to meet these same standards. Again, if 

having a technologist, who is not only certified but certified in a specific 

imaging modality, is important to have in place in an IDTF, then it should be 

important in all settings where Medicare beneficiaries are receiving outpatient 

imaging; 

• Written Orders are Mandated at IDTFs

While not clarified for physician offices, IDTFs are specifically required to 

proceed with care only with a written order in place. This small step is useful in 

assuring appropriate utilization. Certainly, if CMS is adhering to the quality 

components of patient safety and effectiveness, such a requirement is at least as 

important in a physician office setting or hospital. 

 To summarize, the following chart is a comparison of IDTF requirements to other 

imaging settings: 

Type of Imaging Provider

CMS Criteria IDTF Physician Hospital 

Physician Supervision Required Required Not Required 

Supervising Physician 

Qualifications determined by 

Carrier (Radiologist, and for 

many Carriers, BoardCertified) 

Required Not Required Not Required 

Non-Physician Personnel 

(Technologist) Qualifications Required Not Required Not Required 

Written Orders Required Not Clarified Not Clarified 

Let me underscore: NCQDIS and its members are not seeking an advantage in either 

regulatory oversight or reimbursement, but rather, IDTFs are simply seeking a level 

playing field on which to operate. Advances in diagnostic imaging have led to 

tremendous strides in patient care: from reducing the need for invasive surgical 
128

procedures to early detection of life-threatening diseases. However, imaging equipment 

and facilities operated by providers not specifically trained to provide complex diagnostic 

imaging services can be sub-optimal with regard to equipment quality, technologists 

operating the equipment, the quality of images produced, and ultimately interpretation of 

these diagnostic images. In addition, images taken by technologists who do not meet 

IDTF qualification standards may produce lesser-quality images that even the besttrained physician will have trouble interpreting. 

Recommendation:

NCQDIS recommends that the existing IDTF regulations be used as a model to 

address all outpatient imaging operations, including those that fall under the Stark “inoffice ancillary exception,” hospital outpatient imaging facilities, and outpatient imaging 

facilities that are not enrolled in the Medicare program under the IDTF classification. 

This will guarantee progress in assuring appropriate utilization and offer more value for 

the beneficiary, as consistent standards will discourage non-qualified imaging facilities 

and reduce repeat examinations and diagnostically poor images caused by quality issues 

with either imaging equipment or staff. 

III. Identifying, Measuring and Reporting Quality – Here and Now 

NCQDIS has and will continue to advocate for Medicare’s IDTF standards, as well 

as for additional community standards for the patients we serve. Several of our members 

have initiated efforts with their regional payers and purchaser-employers to identify 

community standards and best practices for imaging, and to measure and report their 

impact on utilization. 

Identifying Quality Indicators 

For example, CDI has been directly involved with an effort to identify best practices 

based on the components of quality as originally identified in Crossing the Quality 

Chasm, the landmark Institute of Medicine (IOM) series of reports.5 We have found our 

mid-sized employers and collectively-bargained (Taft Hartley) Trusts are especially 

appreciative of this characterization because it is one that they can use with their 

employees/membership to help promote more knowledgeable consumers of value 

services. Below are several categories as an illustration that the goal of consistent 

standards for imaging providers is not a years-long process, but rather an attainable, 

short-term goal.

 

5

 Institute of Medicine, Crossing the Quality Chasm: A New Health System for the Twenty-first 

Century (Washington: National Academy Press 2001). 
129

Indicators for Purchasing Value in Imaging

Categories are those identified by the IOM in Crossing the Quality Chasm to assist consumers 

in making value-based decisions about imaging providers. 

Safety: 

• MRI and CT equipment that have been accredited by a national accrediting body 

• Registered Technologists 

• Safety and Adverse Event Reports 

• Active Peer Review Program with full participation of all radiologists 

• Adequate and accessible Patient Education to assure the patient understands the 

 procedure being undertaken and the risks of it. 

Effectiveness

• Fellowship trained sub-specialists 

• *Registered Technologists 

• Online report access for treating physicians 

• *Accredited MRIs and CTs 

• Internal and Referring Physician Education - development and promotion of best 

practices. 

Patient-Centered 

• Access/Locations 

• *Fellowship trained sub-specialists 

• *Registered Technologists 

• Patient Satisfaction data (tracked over time) 

• *Patient Safety Records 

• *Patient Education – customized to appropriate audience 

• Cost competitive with providers maintaining similar standards 

• Prohibition and/or reporting of Self-referral/ownership/leasing for any imaging services 

over $100 

Timely

• Turn Around Time on Reports (average time from when patient comes in or referred to 

facility to when report arrives at treating physician) 

• *Online Report Access for treating physicians (this might be a sub-head of previous item) 

• *Patient Satisfaction data (i.e., patient’s view of if service was timely) 

Efficiency

• State-of-the-art Radiology Information System 

• High-field equipment 

• *Online Report Access 

• *Access and Location, including evening and Saturday hours 

Equity

• *Cost competitive with providers maintaining similar standards 

• *Prohibition on Self-referral for any imaging services over $100 

• *Reasonable Access/locations 

*Indicates item is used in more than one category of quality

Measuring and Reporting Indicators of Quality 

Another project CDI has contributed to is a program to assist employees in choosing 

health care providers based on value, which is defined through the formula of: 

Service, Access, Convenience, Safety, and Quality Outcomes
130

Cost 

This measurement-for-public-reporting effort requires that imaging providers be 

measured based on three weighted-value categories. With this model, the score for 

professional services is weighted at 40%, a weight of 30% is given to each imaging 

facility, and another 30% designated for service and consumer satisfaction. In a June 30, 

2006, communication to CMS Administrator McClellan, NCQDIS shared the specific 

measures included in each of these weighted categories and would be pleased to share the 

same with any Member of this Subcommittee. Currently, a white paper is in development 

which will link each of these indicators to peer-reviewed literature regarding specific best 

practices in imaging, or to another type of community standard, such as the CAHPS® 

Clinician and Group Survey.6

 

Other Marketplace Activities Related to Appropriate Utilization 

Private payers have become not only aware of the potential for over-utilization of 

imaging services, they are taking action. Many private payers and purchasers have started 

to impose minimum quality standards for imaging facilities and equipment, and/or have 

hired third-party utilization review companies, often referred to as radiology benefit 

managers (RBMs). 

As HealthHelp CEO Cherrill Farnsworth has explained: 

“The second generation RBMs are encouraging and facilitating quality and 

safety. Measures such as tools for ordering the most appropriate tests and 

consistent quality standards for all imaging providers are saving 20-25% of 

total imaging costs. Cuts to reimbursement have been shown to save little or 

nothing. It is time that all payers, including CMS, reward quality and safety – 

and in the process, control over-utilization and costs. NCQDIS is happy to 

demonstrate this through actual case studies from the private sector.” 

NCQDIS has spent the last year monitoring and collecting publicly available 

information from commercial payers and radiology benefits management companies 

(RBMs). We produced a tracking chart which we shared with CMS Administrator 

McClellan earlier, and which is appended to my testimony here today. Taken as a whole, 

the information on this chart indicates a sophisticated understanding by the majority of 

private payers that capital intensive imaging services must be managed in a more 

comprehensive manner than simply slashing reimbursement, and to encourage 

appropriate utilization. 

In addition, many states have adopted more stringent Certificate of Need (CON) 

laws to review the need for higher-end equipment (such as MRI, CT and PET/CT) in the 

community before the equipment may be ordered. One state, Maryland, has passed a law 

that does not permit non-radiologist physicians to refer to imaging equipment or facilities 

in which they have a financial interest. Other states have made it illegal for physicians to 

lease time on imaging equipment which is not located in their facility and then bill for 

those procedures, essentially receiving a profit for each scan that they order. 

Recommendation:

NCQDIS and its members not only support but strongly encourage private and 

public efforts to develop and utilize consistent standards for all imaging providers. In 

addition, NCQDIS supports efforts to restrict leasing of imaging time on equipment not 

located in the physician office. NCQDIS believes both of these efforts will help reduce 

 

6

 Agency for Healthcare Research and Quality, Consumer Assessment of Healthcare Providers and 

Systems (CAHPS), CAHPS Clinician & Group Survey: Key Issues in Field Tests, 

http://www.cahps.ahrq.gov/default.asp; path Work-In-Progress (accessed July 14, 2006). 
131

imaging over-utilization by ensuring that beneficiaries receive a consistent standard of 

care regardless of provider, and that tests performed are medically appropriate and 

accurate. 

IV. Parity in Reimbursement is Critical to Achieving Value 

in Imaging Services 

In the current absence of consistent standards of quality for all imaging providers, 

cutting reimbursement seems the natural alternative to curbing over-utilization. However 

cutting reimbursement alone will not yield the desired effect, as value in healthcare 

cannot be measured by price. 

Additionally, rate-cutting alone will likely have the unintended impact of 

encouraging some providers who are able to control volume to increase referrals to 

“make up the difference” in lost revenue, reducing any potential savings to CMS or its 

beneficiaries. Worse, rate-cutting could lead to a lack of reinvestment in advanced 

imaging technologies, and thus extended use of older or minimally maintained equipment 

that produces poorer scans. The result could be missed or delayed diagnoses for 

beneficiaries. 

To be clear, NCQDIS and its members support parity in reimbursement for all 

imaging providers when consistent standards are met, but believe this parity must be 

determined carefully and in context of the different types of imaging providers and their 

business/cost structures, and of the reasoning behind current CMS reimbursement 

categories. 

Medicare uses two reimbursement categories today for imaging services: HOPPS 

and MPFS. Hospitals are paid for outpatient services provided to Medicare beneficiaries 

through a methodology called Hospital Prospective Payment System (HOPPS). The 

HOPPS payment methodology was determined using the following process: Hospitals 

allocate costs for capital equipment, supplies, staff and other expenses into cost centers 

that they then submit in aggregate (with charge data) to CMS on an annual basis. CMS 

calculates a cost-to-charge ratio (CCR) for each department and for the hospital as a 

whole. HOPPS groups ‘clinically similar’ services together into Ambulatory Payment 

Classifications (APCs), whose costs are determined by multiplying each charge on every 

claim for a service in that APC by the hospital-specific CCR. The resulting HOPPS rate, 

in aggregate, is meant to reimburse the hospital for 82% of their costs. 

Non-hospital outpatient imaging, independent diagnostic treatment facilities (IDTF) 

and physician offices are paid under a methodology called the Medicare Physician Fee 

Schedule (MPFS). MPFS bases payment for each imaging service on the costs associated 

with providing that service, including clinical staff, disposable supplies, capital 

equipment and administrative overhead. For each service provided, the MPFS assigns a 

payment rate based upon the actual costs of the services. 

Unlike the MPFS, under which IDTFs are paid, HOPPS rate does not represent the 

true cost of providing imaging. The result of the methodology behind HOPPS is that 

neither the hospital, nor CMS, is able to identify the costs of providing individual 

imaging services within a particular hospital, especially over time. On the other hand, 

MPFS assigns a payment rate based upon the actual costs of each service. 

It is also worth noting that hospitals receive additional payments from federal, state 

and local governments that are not available to non-hospital outpatient imaging providers. 

These additional payments are hospital-specific and are not figured into the national 

HOPPS payment rates. They include Disproportionate Share Hospital (DSH) payments 

for inpatient care (meant to offset the monetary losses hospitals incur when providing 

care to indigent patients), credit for bad debt, and, in some non-profit instances, taxexempt bonding for capital expenditures and property taxes. 
132

Last, hospitals provide a wide mix of services that subsidize one set of unprofitable 

services with others that are profitable. IDTFs instead concentrate on cost and quality of 

imaging services only.7

Recommendation

The disparity between HOPPS payment methodology and actual cost of providing 

individual services for IDTFs will lead to less competition in the imaging industry. 

Without a payment system that allows IDTFs to recoup actual costs of providing imaging 

services, IDTFs will not be able to meet consistent standards of quality nor improve 

services. 

As mentioned previously, an IDTF cannot independently create demand for its 

services, and therefore relies upon providing quality services to attract the necessary 

demand.8

 It is therefore the position of NCQDIS that the discussion around quality and 

utilization is wholly ineffective and possibly counterproductive to have without including 

discussion on reimbursement. NCQDIS asks for the Members of this Subcommittee to 

consider the provision in H.R. 5704 that requires this comprehensive look at imaging 

reimbursement policy and we ask your support for it. 

V. Conclusion 

Medical advances are one of our society’s great achievements, and the frail and 

elderly who depend on Medicare and Medicaid should be afforded the same access to this 

lifesaving and life-enhancing technology as those in the private sector. From the 

utilization perspective, rate cuts alone will not curb utilization. Congress and CMS have 

the tools to ensure this equality, and by promoting policies that move beyond shortsighted reimbursement-only methodologies to the more nuanced quality and value-based 

metrics such as those being used in the private sector, true parity for all imaging 

providers can be achieved, benefiting beneficiaries and taxpayers alike. 

NCQDIS sincerely appreciates this opportunity, and we look forward to working 

with you and your colleagues, and the Administration, in the days ahead to address this 

important public need. 

Appendix: 

Private Payer / Radiology Benefits Management Activity 

Related to Standards in Diagnostic Imaging 

 

7

 “Numerous studies show that when physicians or teams treat a high volume of patients who have a 

particular disease or condition, they create better outcomes and lower costs.” Michael E. Porter, 

Elizabeth Olmsted Teisberg, Redefining Competition in Health Care, Harv. Bus. Rev. vol. 82(6), 64-

76 (June 2004). 

8

 “In healthy competition, relentless improvement in processes and methods drive down costs. 

Product and service quality rise steadily.” Michael E. Porter, Elizabeth Olmsted Teisberg, Redefining 

Competition in Health Care, Harv. Bus. Rev. vol. 82(6), 64-76 (June 2004). 
133
134
135
136

 MR. DEAL. Thank you. 

 Dr. Rucker. 

DR. RUCKER. Thank you. My name is Don Rucker. I am Vice 

President and Chief Medical Officer of Siemens Medical Solutions, 

United States, and I am also a practicing emergency department 

physician. I am testifying today for the National Electrical 

Manufacturers Association. NEMA represents the manufacturers who 

provide about 90 percent of the world’s imaging equipment and NEMA 

has been the standard-setting organization for imaging equipment for 

many decades, leading to an extraordinary high level of quality in that 

equipment. 

 Thank you for holding the hearing today about Medicare patients and 

the care they receive. You have heard a lot of testimony about various 

perspectives on growth in imaging services. We believe that the 

tremendous advance in science is by far the main reason for growth in 

imaging. This is a worldwide phenomenon. It is actually independent of 

reimbursement schemes and by country. 

 To understand that, I think it is worth understanding modern imaging 

devices: ultrasound, CT, MR, PET scanners are computers. Almost half 

of our cost of goods in these devices is actually software, and as you 

know, computer power has been doubling every 18 months for decades. 

So when you look at what has been going on in imaging, I think if you 

see these things as computer devices it gives a little bit of perspective on 

this. Let me just give an example about CAT scanners, computer 

tomography, to spell it out. About 10 years ago, CAT scanners became 

advanced enough in resolution that you could see the appendix. When 

that happened, you eliminated lots of exploratory laporotomies and the 

notorious observation admit where we just see if the patient got worse. 

Five years ago, CAT scanners gained enough resolution to be able to 

look at 5 milliliter dropoffs in blood vessels in the lung. Now, you can 

actually look at pulmonary embolus blood clots in the lung, eliminating 

the need for what are known as ventilation profusion scans, eliminating 

the need for pulmonary angiography. Today, high resolution cardiac CT 

scanners are so fast and so accurate that we can stop in the middle of a 

heartbeat and look at coronary arteries, a resolution detail of 2 to 3 

millimeters. This will certainly, as this technology comes on, reduce 

hospital admissions for chest pain as well as a number of diagnostic 

cardiac catheterizations, huge cost savings. 

 In talking about imaging, I think often statements about self-referral 

are blended in with statements about imaging growth. It is worth 

understanding, certainly as we look at the Medicare data, that in fact the 

growth of imaging has been pretty much uniform by all physicians, 

whether they have any opportunities for self-referral or not. This is true 
137

by ordering physicians who have absolutely no way of making money 

and for whom ordering a study incurs incremental costs and time that are 

not directly reimbursed. 

 It is also worth noting that when you look at some of the data that the 

mix of imaging studies is remarkably constant. The top five: heart, 

brain, spine, abdomen, and extremities actually don’t change from a 

year-to-year basis. I mean, they are almost like constants of nature, 

which suggests that specialty-specific self-referral, while it certainly goes 

on on some level, is probably much smaller than we think, possibly 

based on the assumptions that increased utilization is equivalent to 

inappropriate utilization or mis-utilization. The Deficit Reduction Act 

makes what we feel are disproportionate cutbacks in medical imaging. 

As other witnesses have testified, these cutbacks have a randomizing 

effect. The philosophy there also absolutely does not address the billions 

of dollars of cost savings from having precise diagnoses, and that is 

something I think that Medicare and CMS and MedPAC really need to 

look at. NEMA feels that these large cuts will slow the adoption of 

imaging technologies, will slow down the option of earlier diagnosis for 

Medicare patients, and less invasive treatment. We would like to thank 

Congressman Pitts and the members of the committee and subcommittee 

who have sponsored H.R. 5704 to reassess these cutbacks in this broader 

context. 

 I would like to conclude by suggesting that imaging is growing not 

because of self-referral or sort of devious things, but because physicians 

would like to provide Medicare patients with precise answers and 

targeted treatment, rather than educated, I would like to think highly 

educated, but nevertheless, educated guesses and empiric therapy. 

Medicare reimbursement policy should reflect the true cost of providing 

imaging and Medicare reimbursement policy should reflect the total cost 

of providing care, not just the 10 percent most divisible in imaging costs. 

 Thank you very much. 

 [The prepared statement of Dr. Donald W. Rucker follows:] 

PREPARED STATEMENT OF DR. DONALD W. RUCKER, VICE PRESIDENT AND CHIEF MEDICAL 

OFFICER, SIEMENS MEDICAL SOLUTIONS USA, INC. 

Mr. Chairman and Members of the Subcommittee: 

My name is Donald Rucker. I am a practicing emergency physician and serve as 

Vice President and Chief Medical Officer of Siemens Medical Solutions USA. I am 

speaking today on behalf of the National Electrical Manufacturers Association. 

NEMA is the largest association representing medical imaging manufacturers in the 

world. It represents companies whose sales comprise more than 90 percent of the global 

market for X-ray imaging, computed tomography (CT), radiation therapy, diagnostic 

ultrasound, nuclear medicine imaging, magnetic resonance (MRI), and medical imaging 

informatics equipment. 
138

NEMA is also the world's primary standards-development organization for medical 

imaging equipment. Such standards establish commonly-accepted methods of design, 

production, and distribution for medical imaging products. Sound technical standards 

benefit the user and patient, as well as the manufacturer, by improving safety, fostering 

efficiencies, and assisting the purchaser in selecting and obtaining the appropriate 

product. We have been setting standards for 75 years. 

I want to thank the Chairman for conducting this important hearing on imaging. On 

behalf of NEMA, I also want to thank the Subcommittee members who have taken steps 

to ensure continued beneficiary access to critical imaging services. 

Summary and Overview

In my testimony today, Mr. Chairman, I wish to leave the Subcommittee with 

several points: 

Scientific Advances are the Primary Reason for Imaging Growth: The primary 

drivers of imaging utilization are the dramatic scientific and technical advances that allow 

physicians to see soft tissues and organs inside the human body. The power of imaging 

to offer more precise and less-invasive care has sparked what can only be described as a 

fundamental transformation in medicine. Physicians can now use imaging for more 

conditions, for more patients, and for a much broader array of purposes than ever before. 

Modern imaging devices today are sophisticated computers, and the imaging power 

behind them continues to grow in parallel with the growing computing power that drives 

so many other sectors of the economy. 

Medical Imaging Has Become a Standard of Care: Given this new ability to make 

specific diagnoses—rather than educated clinical guesses—before treating a patient, 

physicians have incorporated medical imaging into practice patterns across medical 

conditions and diseases. In fact, imaging has become a standard of modern care for 

virtually all major medical conditions and diseases. This includes cancer, stroke, heart 

disease, trauma, and abdominal and neurological conditions. 

Utilization Growth Arises from Complex Causes: No one can doubt that financial 

incentives play a role in the use of imaging. But the impact of these incentives pales in 

comparison to these broad, patient-centered changes. Interestingly, growth in utilization 

is remarkably similar across medical specialties that can bill for imaging and those that 

cannot. Growth in utilization is also remarkably consistent across organ systems, 

suggesting that a desire to address patient care questions is behind the growth, not 

practice changes by specific medical specialties. 

Continued Innovation and Patient Access Require Informed Policies: Public 

policies that influence the use of medical imaging—including reimbursement decisions 

such as the Deficit Reduction Act of 2005—must take into account this fuller view and 

richer context of utilization growth. Basing imaging reimbursement policy almost purely 

on year-over-year growth rates overlooks these deeper realities and patient desire for 

diagnostic certainty. 

I will elaborate on each of these today, Mr. Chairman, before turning to our policy 

recommendations on reimbursement of imaging and issues directly related to growth in 

the use of imaging. 

Scientific Advances are the Primary Reason for Imaging Growth

As a first step, it is important to explore why imaging has become such a driving 

force in how physicians practice and how medical delivery is structured. 

For centuries, physicians diagnosed patients by using the physical examination. 

With the advent of plain film x-rays a little over a century ago, physicians could see 

bones and outlines, as well as shadows of some organs such as the heart and the lungs. 

Today, with modern imaging devices, physicians can see every single soft tissue, organ, 

and clinically significant blood vessel. Complemented by a parallel, computing-based 
139

revolution in genomics, we simply have the opportunity to take care of patients in 

entirely new ways. In this context, it does not seem surprising that Medicare is seeing 

rapid growth in these clinical practices. 

How has medical imaging technology transformed health care? 

Redefining Care: Advances in imaging have provided physicians with new tools to 

improve care and do so in new ways. As a result, they use imaging in more clinical 

situations, for more diseases, and for more patients. 

• Diagnosis of heart disease was once confined to a stethoscope and an EKG. 

Today, physicians use imaging procedures such as cardiac catheterization, CT 

angiography, cardiac ultrasound, and nuclear imaging to address heart disease. 

These foster early diagnosis and treatment and improved survival.1

 With 

intravascular ultrasound, the very basis of coronary artery care has moved from 

treating “hardening of the arteries” to addressing “vulnerable soft plaque”. 

• For decades, cancer physicians were limited to guesswork and indirect 

evaluations in judging the effect of cancer drugs on a tumor. Today, PET scans 

allow them to visualize the tumor on a individual cellular level, determine how 

well cancer drugs are working, and calibrate therapy to the patient's exact 

circumstances.2 

New Information for Diagnosis and Planning: Imaging has also brought about 

significant change by providing physicians with vast amounts of new information and 

visualization for every body part. This allows them to diagnose disease and plan 

treatment more effectively and confidently. 

• CT and MRI now allow physicians see the blood vessels in the brain and the 

precise location of a stroke—reducing guesswork—and guide them in choosing 

between surgery or clot-busting drugs.3

 

• Physicians use CT and MRI, rather than surgery, to visualize and pinpoint brain 

tumors and aneurysms—even view them in 3D.4

 This gives them critical 

information about the approach to treatment, sparing as much normal brain 

tissue as possible. 

As these examples also show, the power of medical imaging is increasingly blurring 

the lines between diagnosis and treatment delivery. 

Less-Invasive Treatment: Medical imaging has also transformed medicine by 

enabling physicians to provide medical treatments deep within the body without surgery, 

blood loss, or their related risks. So care is easier, complications fewer, and recovery is 

faster. As a result, patients who may have avoided surgery or whose health conditions 

did not allow surgery may now elect to receive care. 

 

1

 See Mowatt G, Brazzelli M, Murray A, Fraser C, Vale L. Systematic review of single photon 

emission computed tomography (SPECT) myocardial perfusion scintigraphy for the diagnosis and 

management of angina and myocardial infarction. Nucl Med Commun. 2005 Mar;26(3):217-29. 

Also see Alan S, Ulgen MS, Ozturk O, Alan B, Ozdemir L, Toprak N. Relation between coronary 

artery disease, risk factors and intima-media thickness of carotid artery, arterial distensibility, and 

stiffness index. Angiology. 2003 May-Jun;54(3):261-7. Also see The Value of Investment: Better 

Care, Better Lives, by MedTAP International, February 2004. 2

 "Positron-Emission Tomography and Assessment of Cancer Therapy," Juweid, ME, Cheson, BD, New 

England Journal of Medicine, 2006 354: 496-507. 3

 "Diagnosis as a Guide to Stroke Therapy," The Lancet, Vuadens P, Bougousslavsky J, 1998: (suppl 

III) 1014. Also see "Practice Guidelines: Use of Imaging in Transient Ischemic Attacks/Acute 

Stroke," A Report of the Stroke Council, American Heart Association, Stroke, 1997; 28: 1480-1497; 

and "Stroke Tests," American Stroke Association at www.strokeassociation.org, and 4

See White PM, Wardlaw JM, Easton V. Can non-invasive imaging accurately depict intracranial 

aneurysms? A systematic review. Radiology. 2000 Nov;217(2):361-70. 
140

• Screening for abdominal aortic aneurysms now allows elective surgery or even 

minimally invasive aortic stent placement preventing largely fatal aortic 

aneurysm ruptures.5

• Physicians can now use image-guided embolization to correct uterine fibroid 

tumors without a hysterectomy. This permits patients to get back to work in 

two weeks, rather than six. 

• Physicians can use stereotactic radiosurgery which targets very narrow but 

extremely powerful beams of radiation on small brain tumors and early 

metastases. The procedure requires no hospitalization and substitutes for brain 

surgery. 

Substitution for Other Health Care Costs: Innovations in medical imaging also 

provide physicians with new capabilities to substitute imaging for other interventions or 

procedures, including observation days in the hospital. 

• Physicians can use ultrasound to guide them in placing large-bore intravenous 

catheters in central veins—substituting for blind guesses about where the vein 

is located. The result is reduced pain and complications—and shorter hospital 

stays.6

 

• With high resolution CT scans, physicians can now precisely diagnosis 

appendicitis. As recently as several years ago, the standard of care for possible 

appendicitis included hospital admissions to observe for clinical deterioration 

and exploratory surgery to enable the surgeon to look directly at the appendix 

and see whether it needed to be removed.7

• CT scans can tell physicians whether a pulmonary embolism has developed in 

the lung, thereby reducing the need to thread a catheter through the heart to 

reach the lung.8

 

• Intensity-modulated radiation therapy allows physicians to pinpoint tumor 

location and “sculpt” each beam of radiation, thus avoiding harm to 

surrounding healthy tissue.9

New Settings of Care: Medical imaging is now smaller and more portable, enabling 

care in a variety of new settings such as physician offices and imaging centers. For 

 

5 "Community-Based, Nonprofit Organization-Sponsored Ultrasonography Screening Program for 

Abdominal Aortic Aneurysms Is Effective at Identifying Occult Aneurysms," Ogata T, Arrington S, 

Davis PM Jr, Sam AD 2nd, Hollier LH, Tromp G,Kuivaniemi H., Ann Vasc Surg. 2006 Apr 27; 

[Epub ahead of print] 

6

 "Ultrasonic Locating Devices for Central Venous Cannulation: Meta-Analysis," Daniel Hind, et al, 

The British Medical Journal, Volume 327, 16 August 2003 7"

CT Evaluation of Appendicitis and its Complications: Imaging Techniques and Key 

Diagnostic Findings," Pinto Leite N, Pereira JM, Cunha R, Pinto P, Sirlin C.,AJR Am J 

Roentgenol. 2005 Aug;185(2):406-17. Review.

8

 "Multidetector-Row Computed Tomography in Suspected Pulmonary Embolism," Perrier, et. al., 

New England Journal of Medicine, Vol 352, No 17; pp. 1760-1768, April 28, 2005. Also, "Clinical 

Validity of a Negative Computed Tomography Scan in Patients with Suspected Pulmonary 

Embolism: A Systematic Review," Quiroz, et al., Journal of the American Medical Association, Vol 

293, No 16; pp. 2012-2017, April 27, 2005. 

9

 See "High Dose Intensity Modulated Radiation Therapy for Prostate Cancer: Early Toxicity and 

Biochemical Outcome in 772 Patients," by Zelefsky MJ, Fuks Z, Hunt M, Yamada Y, Marion C, 

Ling CC, Amols H, Venkatraman, ES, Leibel S, in International Journal of Radiation Oncology, 

Biology, Physics, Volume 53, No. 5; pages 1111-1116, August 2002. Also see "Cancer in the 

Crosshairs," Brown E, Forbes, p. 364, October 28, 2002. 
141

patients, the result is convenience and easier access—increasing the likelihood they will 

get the tests, treatments, and follow-up they need.10 

• Shrinking ultrasound machine size allows physicians to diagnose 

cardiovascular, obstetrical, abdominal, and many soft tissue problems in 

independent imaging facilities, physician offices, and other non-hospital 

locations as well as at the patient's bedside. Hand-carried ultrasound machines 

are used in emergency rooms, ambulances, and even on the battlefield.11 

• Similar changes are occurring in other imaging technologies, including digital 

radiography, CT, and MRI. These technologies now allow diagnosis and 

treatment in a variety of non-hospital settings. 

The Computer Revolution and Imaging: Modern imaging devices are in large part 

sophisticated computer systems that perform incredible transformations of signals 

acquired via sound waves, x-ray beams, or radio frequency waves and proton spins. 

Computing power over the last 40 years has in fact grown as described by “Moore’s 

Law”, a remarkable prediction by Gordon Moore, one of the founders of Intel, who stated 

back in 1965 that, as far as he could see, computing power would double every 18 

months. For Medicare patients and physicians, this has come to mean that every two to 

three years, entirely new aspects of the body come into focus and, what was before a 

clinical guess is now a precise answer from an imaging study. 

Mr. Chairman, I want to stress that any of these trends individually would have been 

enough to bring about important improvements in medical care. Taken together, 

however, they have brought deep change to the health delivery system: 

• Diagnosis is earlier than ever. 

• Physicians have more information and insight. 

• Care is less invasive and less painful. 

• Access to tests and treatments is easier as imaging procedures are available in 

convenient settings. 

• Patient outcomes—from fewer complications to saved lives—are dramatically 

improved. 

• System-wide savings and efficiencies abound. 

Medical Imaging Has Become a Standard of Care

Another factor in the transformation of medicine is that imaging has become a 

standard of modern care for virtually all major medical conditions and diseases. 

Heart Disease

One of the most dramatic contributions that imaging has made over the past 30 years 

has been its role in the significant reductions in mortality and morbidity of heart 

disease.12 Advances in cardiac imaging have enhanced every aspect of cardiac care, 

including screening, diagnosis, treatment, and follow-up monitoring—providing detail 

unachievable even a decade ago.13 Cardiac catheterization, ultrasound, and CT scanning 

 

10 See "Travel Distance to Radiation Therapy and Receipt of Radiotherapy Following BreastConserving Surgery," Athas WF, et. al., Journal of the National Cancer Institute, Vol. 92, No. 3, 

February 2, 2000, pp. 269-271. 

11 See "The Incredible Shrinking Ultrasound Machine," Elsberry, RB, Imaging Economics, Nov. 

2001. 

12 See The Value of Investment: Better Care, Better Lives, by MedTAP International, February 2004. 

Also see "Trends in Heart Attack Treatment and Outcomes, 1975-1995, Literature Review and 

Synthesis," by Paul Heidenreich and Mark McClellan, in Medical Care Output and Productivity,

edited by David M. Cutler and Ernst R. Berndt, University of Chicago Press, 2001. 13 See Lewin Report, p. ii. Also see Alexanderson E, Granados N, Gomez-Martin D, Ricalde A, 

Meave A. [Evaluation of coronary artery disease by myocardial perfusion imaging in women] Arch 
142

provide physicians with vital information and precise images of blood flow, artery 

blockages, and heart functioning.14 This information allows physicians to make earlier, 

more accurate diagnoses and to better target therapy. Also, medical imaging facilitates 

coronary angioplasty which has become the therapy of choice for opening clogged 

arteries and has been shown superior to drugs in more than 20 clinical trials.15 

Advances in imaging continue to offer new insights and detail about cardiac activity. 

Today, multi-slice CT provides rapid images of coronary artery plaque and precise 

visualization of clogged arteries without use of invasive catheters.16 In addition, MRI 

and nuclear imaging scans show functioning of the heart muscle at the cellular level 

allowing effective treatment of CHF, one of Medicare’s most costly illnesses. 

Stroke

Medical imaging has made modern stroke therapy possible through early, accurate 

diagnosis and new treatment options.17 Numerous imaging technologies, such as 

ultrasound and MRI, provide high-resolution images of the vascular system, and the brain 

to identify blockages or the thickening of the artery lining, thus allowing stroke 

prevention. CT scans, diffusion-weighted imaging, and PET scans aid physicians in 

assessing whether carotid endarterectomy is appropriate—a surgery that removes plaque 

from the arteries that supply blood to the brain.18 

When stroke hits, imaging tests such as CT and MRI provide rapid information 

about the nature and location of stroke and the extent of brain injury, allowing physicians 

to make well-informed judgments rapidly.19 This information enables physicians to 

differentiate between ischemic stroke, involving a blockage in the arteries, and 

hemorrhagic stroke, which involves rupture or loss of blood. With this information, 

physicians can prescribe cost- and life-saving thrombolytic therapy—a drug treatment for 

ischemic brain attack.20 Or they can use imaging to guide delicate surgical procedures to 

close ruptured arteries. Imaging also enables use of microcoil stents to correct brain 

 Cardiol Mex. 2005 Jan-Mar;75(1):35-41. Also see Mowatt G, Brazzelli M, Murray A, Fraser C, 

Vale L. Systematic review of single photon emission computed tomography (SPECT) myocardial 

perfusion scintigraphy for the diagnosis and management of angina and myocardial infarction. Nucl 

Med Commun. 2005 Mar;26(3):217-29. 

14 See "American College of Radiology Clinical Statement on Noninvasive Cardiac Imaging," 

Weinreb, JC, et. al., Radiology, June 2005, Vol. 235, pp. 723-727. 

15 See “Primary Angioplasty Versus Intravenous Thrombolytic Therapy For Acute Myocardial 

Infarction: A Quantitative Review of 23 Randomized Trials,” by Keeley EC; Boura JA; and Grines 

CL; in The Lancet, Vol 361, No 9351, Jan 4, 2003. Also see “A Comparison of Coronary 

Angioplasty with Fibrinolytic Therapy in Acute Myocardial Infarction,” by Andersen et al, in The 

New England Journal of Medicine, Vol 349, No 8; 733-742, 2003. 16"Roles of Nuclear Cardiology, Cardiac Computed Tomography, and Cardiac Magnetic Resonance: 

Assessment of Patients with Suspected Coronary Artery Disease," Berman, DS, et. al., Journal of 

Nuclear Medicine, V 47, No 1, January 2006, pp. 74-82. Also see "How New Heart-Scanning 

Technology Could Save Your Life," by Christine Gorman and Alice Park, Time, Sept 5, 2005, pp. 

58-71. 

17 See "Stroke Treatment: Time is Brain," Hill MD, and Hachinski V, The Lancet, 1998; 352 (suppl 

III) 1014. Also see "Practice Guidelines: Use of Imaging in Transient Ischemic Attacks/Acute 

Stroke," A Report of the Stroke Council, American Heart Association, Stroke, 1997; 28:1480-1497. 18 See "Cost Effectiveness of Carotid Endarterectomy Clinical Study," Nussbaum ES, Heros RC, 

Erickson DL, Neurosurgery, 38; 237-244; 1996. Also see The Value of Investment in Health Care: 

Better Care, Better Lives, MedTap International, p. 34, 2004. 19 "Evidence-Based Neuroimaging in Acute Ischemic Stroke," Vo DK, Lin W, Jin-Moo L, 

Neuroimaging Clinics North America, 13 (2003), 167-183. 20 "Cost-Effectiveness of Tissue Plasminogen Activator for Acute Ischemic Stroke. NINDS rt-PA 

Stroke Study Group," Fagan SC, Morgenstern LB, Petitta A, Ward RE, Tilley BC, Marker JR, 

Levine SR, Broderick JP, Kwiatkowski TG, Frankel M, Brett TG, and Walker MD, in Neurology, 

50, 4: 883-890. 
143

aneurysms without open surgery, thus reducing patient hospital stays by half and 

allowing patients to recover months earlier.21

Lancet study identifies productivity gains from stroke therapy 

Let me add one more small, but important point, with regard to the role of imaging 

in diagnosing and treating stroke. A study published this past April in The Lancet, one of 

the premier medical journals in the world, reported that three NIH studies on techniques 

for diagnosing and treating stroke—in which medical imaging plays a critical role in 

guiding physician decisions—led to a net economic benefit to society of roughly $8 

billion in the 10 years following completion of the studies.22 These are the benefits in 

dollar terms that arose from use of the approaches suggested in the studies, minus the 

total treatment costs. 

These treatments—in this case, use of clot busting drugs following stroke onset and 

carotid endarterectomy to clear clogged arteries to the brain—would not be possible 

without the sophisticated imaging provided by CT, MRI, ultrasound, and other 

modalities. In addition, a separate study published online by The Lancet on July 4, 2006, 

added a new prospect for even greater value.23 It found that advanced MRI is effectively 

able to extend the time window—which has traditionally been understood to be three 

hours following the onset of symptoms—during which certain patients can benefit from 

clot-busting drugs. This holds the potential for dramatic new savings in lives and costs. 

Cancer

Medical imaging is also a primary tool in the battle against cancer. Over the past 

two decades, advances in medical imaging have dramatically improved cancer diagnosis 

and treatment.24 

Earlier detection of breast cancer through mammography has reduced death rates in 

the U.S. and other countries,25 with ultrasound and MRI aiding in diagnosis and 

treatment. CT, MRI, and PET scans give physicians vital information about the location 

and nature of cancer to aid in treatment planning. And computer-aided detection, or 

CAD, systems enhance the ability of mammography to detect breast cancer in its early 

 

21 “Surgical and Endovascular Treatment of Unruptured Cerebral Aneurysms at University 

Hospitals,” by Johnston SC, Dudley RA, Gress DR, and Ono L , Neurology, 1999; 52:1799. Also 

see “Endovascular and Surgical Treatment of Unruptured Cerebral Aneurysms: Comparison of 

Risks,” by Johnston SC, Wilson CB, Halbach W, Higashida RT, Dowd CF, McDermott MW, 

Applebury CB, Farley TL, Gress DR, Annals of Neurology, 2001, May; 49(5): 682-4. Also see, 

"International Subarachnoid Aneurysm Trial (ISAT) of Neurosurgical Clipping Versus Endovascular 

Coiling in 2143 Patients with Ruptured Intracranial Aneurysms: A Randomised Comparison of 

Effects on Survival, Dependency, Seizures, Rebleeding, Subgroups, and Aneurysm Occlusion," 

Molyneux AJ, Kerr RS, Yu LM, Clarke M, Sneade M, Yarnold JA, Sandercock P, The Lancet, Vol. 

366, Issue 9488, September 3, 2005, Pages 809-817. 

22 "Effect of a U.S. National Institute of Health Programme of Clinical Trials in Public Health and 

Costs," Johnston SC, et. al., The Lancet, Vol.367, pp. 1319-1327, April 22, 2006.

23 "MRI versus CT-based Thrombolysis Treatment Within and Beyond 3-hour window after Stroke 

Onset," Kohrmann, M; Lancet Neurology, 2006, published online, July 4, 2006

24"Molecular Imaging in Cancer: Future Directions and Goals of the National Cancer Institute," 

Hoffman JM, Menkens AE, Academic Radiology 2000, Vol 7, No 10, October 2000, p.905. Also 

see, "Imaging in Cancer: A National Cancer Institute 'Extraordinary Opportunity,'" Hoffman, JM, 

Neoplasia, Vol. 2, No.1/2, January-April, 2000. 25 "Effect of Screening and Adjuvant Therapy on Mortality from Breast Cancer," Berry, DA, et. al., 

The New England Journal of Medicine, October 27, 2005, pp.1784 - 1792. Also, "Effects of 

Chemotherapy and Hormonal Therapy for Early Breast Cancer on Recurrence and 15-year Survival: 

An Overview of the Randomised Trials," Early Breast Cancer Trialists' Collaborative Group 

(EBCTCG), The Lancet, Vol. 365, May 14, 2005, pp. 1687-1717. 
144

stages.26 Minimally invasive imaging procedures allow biopsies of breast, bone, and 

other tissue without open surgery, dramatically reducing infections, complications, and 

recovery time.27 

Sophisticated new radiation treatment systems provide targeted radiation therapy 

that matches the tumor shape, but protects surrounding tissue. The result: better success 

rates, quicker pain relief, and fewer complications.28 

PET and other cell-metabolism specific nuclear scans also allow physicians to 

identify cancer cells when they number in the hundreds of cells rather than waiting for 

the cancer cell doubling to the millions of cells that are needed to be seen with other 

modalities. 

Physician Practice Guidelines Specifically Recommend Imaging 

The central role that medical imaging plays in addressing disease is captured in 

medical practice guidelines developed by many medical specialty societies, including the 

American College of Radiology and the American College of Cardiology. The 

guidelines reflect clinical recommendations developed by the specialty physician groups 

themselves on how best to diagnose or treat specific medical conditions. They are based 

upon proven and widely accepted standards and evidence. 

Recent examples of such guidelines include: 

3⁄4 Guidelines by the American Urological Association recommending use of 

ultrasound to assess prostate size or abnormalities, guide minimally 

invasive kidney biopsies, and examine the bladder for suspected bladder 

stones.29

3⁄4 Guidelines by the American Heart Association and the American College 

of Cardiology recommending use of ultrasound, CT, and other imaging 

technologies to diagnose peripheral arterial disease.30

3⁄4 Recommendations of the U.S. Preventive Services Task Force—the 

nation's pre-eminent preventive services panel—to use ultrasound screening 

to detect abdominal aortic aneurysms in elderly male smokers.31 The 

USPSTF has long-established recommendations on the use of imaging to 

detect breast cancer and colorectal cancer. 

Governmental bodies also frequently underscore the importance of imaging in 

diagnosis and treatment. Many of the national coverage decisions issued by Medicare 

over the past 18 months have involved medical imaging—PET scanning in particular. In 

2005, the Medicare program covered PET for Alzheimer's disease and for diagnosing and 

 

26 "Screening Mammograms: Interpretation with Computer-aided Detection—Prospective 

Evaluation," Morton, MJ, Radiology, Vol. 239, No. 2, pp. 375-383, May, 2006. 27 See "Diagnosis of Primary Bone Tumors with Image-Guided Percutaneous Biopsy: Experience 

with 110 Tumors," by Jelinek JS, Murphey MD, Welker JA, Henshaw RM, Kransdorf MJ, 

Shmookler BM, Malawer MM, Radiology 2002; 223; 731-737. 28 See, "High Dose Intensity Modulated Radiation Therapy for Prostate Cancer: Early Toxicity and 

Biochemical Outcome in 772 Patients," by Zelefsky MJ, et. al., International Journal of Radiation 

Oncology, Biology, Physics, Volume 53, No. 5; pages 1111-1116, August 2002. 29 American Urological Association, "Guidelines for Ultrasound Utilization," accessed May 8, 2006, 

at http://auanet.org/about/policy/education.cfm#ultrasound. 30 ACC/AHA Practice Guidelines for the Management of Patients with Periperal Arterial Disease 

(Lower Extremity, Renal, Mesenteric, and Abdominal Aortic): Executive Summary," Hirsch AT, et. 

al., Circulation, March 21, 2006, pp. 1474-1547. 31 "Screening for Abdominal Aortic Aneurysm: A Best-Evidence Systematic Review for the U.S. 

Preventive Services Task Force," Fleming C, et. al. Annals of Internal Medicine, Feb 2005, Vol. 

142, No. 3, pp. 203-211; and "Screening for Abdominal Aortic Aneurysm: Recommendation 

Statement, U.S. Preventive Services Task Force," Annals of Internal Medicine, Feb 2005, Vol. 142, 

No. 3, pp. 198-202. 
145

determining the stage of esophageal, colorectal, head and neck cancer, and non-small-cell 

lung cancer, as well as lymphoma and malignant melanoma.32 Medicare also agreed to 

provide payment for use of PET for virtually all other types of cancer if provided as part 

of a clinical trial or a national registry, such as the National Oncologic PET Registry.33 

Medicare coverage clears the way for use among the program's 40 million beneficiaries. 

Physicians Say Imaging is Most Important Innovation 

In light of the impact of imaging on the practice of medicine, Mr. Chairman, it is not 

surprising that it has been rated highly by physicians and medical journals alike. 

A 2001 study published in the policy journal Health Affairs asked 225 leading 

general internists to rank the relative importance of 30 medical innovations in terms of 

their value in improving patient care.34 These physicians, a group who do not do imaging 

themselves, overwhelmingly picked two imaging technologies—CT and MRI—as the 

most significant medical innovation. The next highest choice, a heart drug, was rated 

much lower. Of the top five innovations chosen by these physicians, three involved 

imaging: CT and MRI, image-guided balloon angioplasty, and mammography. 

While this survey focused on general internists, the same broad adoption of imaging 

has occurred among medical specialty physicians as well. This includes oncologists, 

surgeons, cardiologists, internists, and emergency room physicians, among others. In 

March 2005 testimony, a coalition of more than 20 physician specialty groups 

characterized the importance of imaging in the way they practice in this way: 

“In addition to traditional diagnostics employing medical imaging, we now use 

imaging to guide minimally invasive treatments and to track ongoing treatment 

protocols through judicious use of medical imaging. We are enabled as 

physicians to adjust patient care plans mid-therapy to achieve the best possible 

outcomes. Several specialist groups intimately integrate medical imaging in the 

most delicate and intricate aspects of their care. The prudent use of medical 

imaging in the actual treatment regimen is not only excellent medicine: it also 

manages short- and long-term costs by minimizing wasteful and ineffective 

treatments.”35

It is not surprising that The New England Journal of Medicine called imaging one of 

the top 11 innovations of the past 1,000 years—ranking it alongside such milestones as 

the invention of anesthesia, the discovery of the cell, the understanding of genetics, and 

the synthesis of antibiotics.36

Utilization Growth Arises from Complex Causes

Unfortunately, these broad, patient-centered changes that underlie growth in 

imaging are not often heard in policy discussions about utilization. As noted earlier, 

utilization growth is judged almost entirely on the size of the year-to-year change, not on 

whether the reasons behind it are sound or unsound. In fact, increase in the number of 

imaging procedures per patient is one of the primary metrics used to demonstrate 

 

32 "Positron-Emission Tomography and Assessment of Cancer Therapy," Juweid ME, and Cheson, 

BD, The New England Journal of Medicine, Vol. 354, No. 5, Feb. 2, 2006, pp. 496-507. 33 See http://www.cancerpetregistry.org/index.htm. 

34 "Physicians' Views of the Relative Importance of Thirty Medical Innovations," Victor R. Fuchs 

and Harold C. Sox, Jr., Health Affairs, Volume 20, Number 5, September/October, 2001. 

35 Williams, Testimony before the U.S. House Ways and Means Committee, March 17, 2005

36 "Looking Back on the Millennium in Medicine," the Editors, New England Journal of Medicine, 

Volume 342, pp. 42-49, January 6, 2000. 
146

excessive utilization.37 Yet it is this very metric that captures the transformation of 

medicine brought about by imaging—physicians use it more broadly, in more patients, 

for more conditions because it improves care. 

In addition, it is widely accepted that financial incentives for physicians—usually in 

the form of self-referral—are behind the increase in imaging growth. Yet, detailed 

analysis of Medicare payment data done for NEMA suggests that the growth in imaging 

utilization has been remarkably consistent across all specialties and procedures whether 

or not there is an opportunity for “self-referral.” In particular, the percentage of dollars 

spent on each of the top five imaged areas—the heart, spine, brain, extremities and 

abdomen—has stayed remarkably constant. This suggests that—rather than performing 

new studies largely for reimbursement—physicians are using better studies to answer 

age-old clinical questions, such as why the patient is not able to talk or move or is in pain. 

Notably, these imaging patterns cross all specialties—those that have the opportunity for 

self-referral and those for whom ordering, explaining, arranging, and tracking imaging 

studies done by someone else is purely an additional cost, not specifically reimbursed. 

To complicate the issue of utilization further, the costs associated with increases in 

utilization are often overstated. In its March 2005 Report to the Congress: Medicare 

Payment Policy, the Medicare Payment Advisory Commission argued that utilization of 

imaging technologies was increasing out of proportion to growth in other health care 

services and that these increases contributed to steep cuts in physician reimbursement 

through a budgeting mechanism known as Medicare's Sustainable Growth Rate (SGR) 

formula.38

In fact, imaging costs have grown at about the same rate as other portions of health 

care spending. With regard to the SGR, imaging services grew 4.6 percent per year faster 

than other services that were included in the SGR mechanism. But a study done for the 

National Electrical Manufacturers Association found that more than half of that was due 

solely to a shift in imaging services from hospital outpatient departments to physician 

offices and other non-hospital settings. When this “site-of-service” shift—from hospital 

to non-hospital settings—is taken into account, imaging services grew about 2.0 percent 

faster than other services.39 

A 2005 study by the Lewin Group found that when growth in imaging costs are 

compared to growth in all Medicare Part B services, imaging grew at roughly the same 

rate. From 1999-2003, the average annual growth in all Medicare Part B services across 

providers was 7.8 percent, while the comparable growth in imaging was 8.7 percent—

only about 0.9 percentage points faster.40

Similarly, a study of overall hospital costs over the seven-year period of 1996-2002 

at Massachusetts General Hospital found that medical imaging costs rose more slowly 

than overall hospital costs. The study also found that use of imaging was linked to 

shorter hospital stays.41

Utilization Growth Often Means Offsetting Savings 

In this regard, Mr. Chairman, I want to underscore that, despite frequent assertions 

to the contrary, medical imaging reduces costs and creates new efficiencies in health 

 

37 See "Report to the Congress: Medicare Payment Policy," Medicare Payment Advisory 

Commission, March 2005, Washington, D.C. 

38 Ibid. 

39 See "NEMA Cautions on Misinterpreting Medical Imaging Growth under SGR," National 

Electrical Manufacturers Association press release, April 20, 2006, accessed May 22, 2006, at 

http://www.nema.org/media/pr/20060420a.cfm. 

40 "Issues in the Growth of Diagnostic Imaging Services: A Case Study of Cardiac Imaging," The 

Lewin Group, May 3, 2005, p. 20. 

41 "Diagnostic Imaging Costs: Are They Driving up the Costs of Hospital Care?", Beinfeld MT, 

Gazelle GS, Radiology, 2005; 235:934-939. 
147

delivery and improved productivity in patients. In these cases, greater utilization means 

greater savings. 

3⁄4 The American Heart Association journal Stroke reported that a “scan-all” 

strategy for stroke patients ultimately saved money—when compared to 

later, or reduced, use of CT scans for such patients—because the 

information from the scans led to better diagnoses that led to better 

outcomes and shorter hospital stays.42 Thus, greater use of CT scans, and 

greater expenditures on CT scans as a result, translated into dollar savings 

overall. 

3⁄4 Physicians at Massachusetts General Hospital reported in the American 

Journal of Roentgenology that increased use of state-of-the-art CT imaging 

in treating facial trauma patients led to a reduction in overall imaging costs 

of 22 percent per patient between 1992 and 2002. The primary explanation 

for the findings, according to the researchers, is that CT cost less than it did 

10 years earlier, did more, and increasingly substituted for X-ray 

examinations, which dropped by 50 percent over the period.43 

3⁄4 A study from Radiology found that image-guided breast biopsy costs 

roughly a third of what a surgical biopsy does. This minimally invasive 

procedure uses ultrasound or mammography images to locate a suspicious 

lump or nodule in the breast. It takes one-fifth the amount of time as 

surgical biopsy, reduces complications, and allows women to return to 

normal activities in half the time that it takes after open surgery. 44 In 

Medicare patients, use of this procedure is increasing, while use of more 

invasive procedures, such as surgery, is declining. 

 

In each of these cases—and the peer-reviewed literature contains many more 

examples like them, for virtually all imaging modalities—the number of imaging 

procedures per patient increases. Yet in each case, more utilization of imaging is better, 

not worse, because it represents cost-savings. This underscores the point that increases in 

utilization do not automatically equate with inappropriate utilization. 

Another complicating issue is that the budgeting and accounting systems that public 

and private payers use for imaging procedures fail to take into account any savings that 

arise from the use of that imaging. Thus, savings that offset other costs—such as 

substitution of minimally invasive breast biopsies for open surgery—are never reflected, 

while the increase in the number of imaging studies performed is tabulated. The result is 

a skewed picture of both imaging utilization and its costs. It is interesting to note that, in 

exploring the potential for Medicare payment analysis based on grouping care into allinclusive episodes, even MedPAC acknowledges that paying for isolated pieces of care is 

fundamentally flawed.45 NEMA believes that disproportionately forcing cutbacks in 

imaging when it can drive cost savings in other areas of care is inappropriate. 

Mr. Chairman, this is our view of the forces behind utilization of imaging. To be 

sure, inappropriate utilization exists. It is a serious issue and we do not wish to underplay 

it. But as we look at the real world of health delivery, there isn't the degree of wasteful, 

 

42 "Immediate Computed Tomographic Scanning of Acute Stroke is Cost-Effective and Improves 

Quality-of-Life," Wardlaw, JM; Seymour JC; Keir S; Lewis S, and Sandercock P, Stroke, 

November, 2004, pp. 2477-2483. 43 Trends in the Use of CT and Radiography in the Evaluation of Facial Trauma, 1992-2002: 

Implications for Current Costs," Turner BG, Rhea JT, Thrall JH, Small AB, Novelline RA; 

American Journal of Roentgenology, 2004; 183: 751-754. 44 "Core-Needle and Surgical Breast Biopsy: Comparison of Three Methods of Assessing Cost," 

Jeffrey H. Burkhardt and Jonathan H. Sunshine, Radiology, 212:181-188, 1999. 45 "Report to Congress: Increasing the Value to Medicare," Medicare Payment Advisory 

Commission, June, 2006. 
148

out-of-control utilization that many observers suggest. Instead, what is prominent is a 

glimpse of the power of science to offer better views inside the human body and greater 

insight about a patient's condition. 

Continued Innovation & Patient Access Requires Informed Policies

DRA Cuts will Harm Patients, Providers, and Even Medicare 

It is in this broader context of forces underlying utilization growth that that we offer 

these observations about the payment reductions of the DRA. 

We view the DRA imaging cuts as excessive and unjustified. Given their size, these 

reductions will set off a chain reaction that will force many physicians to discontinue or 

greatly reduce the availability of imaging services. In turn, patients will find it harder to 

get care, will have to travel further, and will face long delays as they seek care in hospital 

outpatient departments. I have attached to my testimony a short policy brief summarizing 

our view of the DRA cuts. It was prepared by the Access to Medical Imaging Coalition, 

of which NEMA is a member. 

To ensure continued quality care, we urge Congress to pass H.R. 5704, the Access to 

Medicare Imaging Act. The measure would impose a two-year delay on the cuts while 

the Government Accountability Office analyzes the likely impact of the cuts on Medicare 

beneficiaries, especially those living in rural areas. We see this as sensible health policy 

and prudent fiscal policy. 

DRA cuts will harm Medicare beneficiaries 

The Subcommittee should be aware of the breadth and significance of systemic 

issues that will arise from the DRA cuts. 

• First, utilization will not be improved. These are budget cuts, nothing else. 

They affect imaging procedures without regard to whether such procedures are 

overused, inappropriately used, or underused. 

• Second, the rate reductions bear no relationship to the real-world costs of 

providing imaging services. Some 80 percent of the services subject to the 

DRA caps will fall to levels below the office-based cost of providing the 

service. Many will fall to less than half of these real costs. This stands in sharp 

contrast to efforts by CMS, as described by Administrator Mark McClellan just 

last week, to ensure that payment decisions “accurately reflect the cost of 

providing quality care.”46

• Third, costs are dictated by the site of care. The DRA ignores legitimate 

differences in the costs of providing imaging services in different settings—

specifically hospital outpatient departments versus physician offices and 

independent imaging facilities. The legislation does this despite the fact that 

both Congress and Medicare have long recognized and adjusted for these 

differences. In fact, the DRA largely presumes that the hospital outpatient and 

the physician payment systems are interchangeable. They are not. They are 

very distinct systems with unique designs that reflect the nature of care 

delivered in very different settings. Rates on the physician fee schedule reflect 

the costs of specific procedures; hospital outpatient rates reflect the estimated 

cost of a bundle of different services, adjusted to reflect the expected severity of 

the patients who will likely need that care. Mixing these systems, especially to 

hunt for the lowest rates, poses threats to office-based treatments and tests that 

go well beyond the DRA imaging cuts themselves. 

• Fourth, the DRA reductions contradict efforts in CMS and Congress to add 

reason and predictability to Medicare payment systems, including value-based 

 

46 Mark B. McClellan Remarks to InHealth, the Institute for Health Technology Studies, July 10, 

2006. 
149

purchasing proposals. It seems ironic that, at a time when CMS states that its 

goals for the Medicare physician payment system are to make rates 

“understandable, intuitive and stable,” that the DRA imposes reductions that 

contradict this intention.47

• Finally, the DRA cuts may actually increase inappropriate utilization. The 

reason is the cuts are so deep they create incentives for providers to increase the 

number of procedures to compensate for extreme financial shortfalls. 

Future diffusion of important imaging advances requires reimbursement policies that 

are equitable and reflective of the resources required to provide high-quality, appropriate 

care. The Deficit Reduction Act of 2005 reductions to imaging payments will slow – 

maybe greatly – the adoption of medical technologies that free patients of the older, more 

invasive alternatives which often require longer recoveries and hospital stays. 

Policies: NEMA Should Participant in Standards-Setting for Medical Imaging 

I want to add one final note in closing, Mr. Chairman. If Congress decides the 

development of quality or performance standards is necessary to address use of medical 

imaging, NEMA should play a central role. 

NEMA is not only an association of imaging manufacturers, it is also a standardssetting organization. For the past 75 years, NEMA has developed hundreds of medical 

imaging standards for product quality, safety, and performance. 

• NEMA developed a standard for ultrasound equipment enabling the physician 

or sonographer to monitor the acoustic output display in real time, during an 

ultrasound examination. This helps minimize the ultrasound exposure, while 

maximizing the diagnostic information that can be acquired from the exam. 

• NEMA developed a performance standard and quality control guidelines for 

single photon emission computed tomography (SPECT) devices used in nuclear 

medicine, to inform clinical users whether their SPECT devices are performing 

properly, and therefore suitable for use with patients. 

• NEMA successfully developed, and continues to update, one of the most 

significant standards in improving efficiency and communications in health 

care delivery. The Digital Information and Communications in Medicine 

(DICOM) standard established a common digital “language” to facilitate the 

interchange of information between digital imaging computer systems in 

medical environments. 

NEMA knows the technology. We know how it is used. We understand how to set 

standards and maintain them. NEMA needs to be at the table. 

Conclusion

Let me conclude my remarks today, Mr. Chairman, with these final thoughts. 

Perhaps at its most basic level, the increased use of medical imaging reflects the 

human desire to know—with more certainty—what is wrong, or why something hurts, or 

whether a dangerous disease is present. Medical imaging devices are the ultimate digital 

cameras that can help answer those questions. And the ability to look inside the human 

body with these tools—in new ways, with more precision, and with confidence in the 

result—arises from advances in computing technology and, in essence, science itself. 

Because computer power doubles roughly every 18 months, we can expect—and hope--

that these technical and technological advances to continue. 

Mr. Chairman, we believe that it is short-sighted to base imaging reimbursement 

policy—and particularly our broader attitudes about imaging utilization—on year-over-

 

47 Physician Practice Expense Proposed Rule, Federal Register, June 2006.
150

year growth rates overlooking these deeper realities, desires, and needs. We believe that 

the starting place for finding sound policies to manage imaging utilization must begin 

with these fundamental realities. 

Attachment 

Access to Medical Imaging Coalition 

Protecting and Preserving Access to Quality Imaging Services for our Nation’s Medicare 

Patients 

_______________ 

Imaging Cuts in Deficit Reduction Act 2005 Will Harm 

Patients and Physicians 

ISSUE: Severe, last minute payment cuts in medical imaging in the Medicare physician 

fee schedule included in the Deficit Reduction Omnibus Reconciliation Act of 2005 

(DRA) will lead to a wide range of adverse, unintended consequences for Medicare 

beneficiaries and providers.

BACKGROUND: Section 5102 of the DRA directs severe reductions in payments for 

many imaging services under the Physician Fee Schedule (PFS). Under this provision in 

the DRA, effective January 1, 2007, the payment for the technical component (e.g., 

equipment, non-physician personnel, supplies, and overhead) of an imaging service will 

be set at the Hospital Outpatient Department (HOPD) payment rate, if the PFS payment 

rate is higher. 

CONCERNS: This change in Medicare payment policy raises a number of disturbing 

issues such as: 

• Rushed and Inadequate Process – Neither Congress, nor MedPAC, nor any other 

public forum has held a public hearing or meeting on this proposal. This proposal 

has received no public comment or testimony. 

• Disproportionately Large Cuts for Imaging – The cuts enacted for imaging by the 

DRA comprise roughly one-third of the total Medicare savings in the bill. Yet 

imaging only comprises roughly one-tenth of Medicare spending. Examples of 

these cuts include: 

o Ultrasound - Reimbursement for ultrasound guidance procedures, performed 

as part of a minimally invasive biopsy for the diagnosis of breast cancer (a 

biopsy method which saved the Medicare program $88 million from 2001 – 

2003), would be reduced by 35 percent.

o PET / Nuclear Medicine - Reimbursement for PET/CT exams used to 

diagnose cancerous tumors and determine the effectiveness of cancer treatment 

would be reduced by upwards of 50 percent (an unprecedented cut for a new 

technology whose HCPCS code was just provided by CMS in April 2005).

o DEXA - Reimbursement for bone densitometry studies necessary for the 

diagnosis of women at risk for osteoporosis (a recently enacted Medicare 

screening benefit) would be reduced by over 40%. 

o MRI - Reimbursement for MR angiography of the head used to detect the 

location of aneurysms would be reduced by 42%. 

• A Failure to Recognize the Fundamental Differences between the costs 

associated with practicing medicine in a physician’s office, and practicing 

medicine in a hospital outpatient department - The different payment formulas 

for each site of service are specifically designed by Congress to take into account the 
151

unique differences and costs of providing care in each setting. Linking 

reimbursement under the PFS system to the HOPD system ignores real-world costs 

in personnel, rent, and supplies that physicians in non-hospital settings must deal 

with daily. 

• Limiting Beneficiary Access to Critical Imaging Services – These cuts have the 

very strong potential to drive imaging from the physician office and free-standing 

facilities back into hospital outpatient departments, thus limiting Medicare 

beneficiaries’ access to nearby imaging services that allow for more timely 

diagnosis and initiation of treatment. 

• Longer Wait Times for Medicare Patients - On average, patients already wait 10 

days to two weeks for non-urgent imaging services in the hospital outpatient 

department. Reduced access to imaging services in the physician’s office and in 

free-standing imaging centers could increase these wait times dramatically. 

• Reduced Access For Medicare Patients in Rural Areas - Beneficiaries may be 

forced to drive long distances for needed imaging services if providers reduce or 

eliminate imaging locally. Also physicians may choose not to invest in telemedicine 

equipment that allows specialists at distant locations to help interpret a patient's scan 

—again harming rural access. 

SOLUTION: Please support HR 5704 to delay implementation of DRA Sec. 5102 for 

two years, while the GAO conducts a thorough study of the impact on patient access and 

services. 

 MR. DEAL. Well, thank you all. A very interesting panel. I think it 

demonstrates how difficult it is to get our hands around this issue, 

because you all are coming at it from somewhat different points of view, 

perhaps, at least in part. 

 Let me see if I can find some indication of where we are on some of 

the issues that have surfaced. One of the issues that surfaced, obviously, 

is the question of standards, whether they should be federally imposed 

standards, and whether there should be standards that maybe, as Dr. 

Douglas suggested, may be incorporated into pay-for-performance type 

of approach to it. I will go down the line and I will start with Dr. 

Douglas, how many of you feel that there is a need for Federal standards 

to be adopted in the imaging area? 

 DR. DOUGLAS. I think there’s a need for Federal standards, provided 

that they respect specialty-specific knowledge. I don’t think any of you, 

God forbid you had a heart attack, would want anybody but a 

cardiologist taking care of you. 

 MR. DEAL. I am going to come back to that next. 

 Dr. Van Moore. 

 DR. VAN MOORE. Clearly, I think we would advocate because of the 

fact that there is a lack of uniformity. There can be a relatively disparate 

lack of uniformity in the way the States are handling the IDTF issue-- 

 MR. DEAL. So you would be a yes? 

 DR. VAN MOORE. --for Federal standards. 

 MR. DEAL. Yes. 
152

 MR. DONAHUE. I would be for it, Chairman Deal. I believe that 

Federal standards imposed that consider the nuances in specialty and 

modalities would be very effective in improving the quality of care. 

 MR. DEAL. All right. 

 DR. LAUBE. I would be against, as our imaging capabilities are 

primarily those of ultrasound, which I think we handle on a voluntary 

basis through various-- 

 MR. DEAL. You would be opposed to Federal standards on 

ultrasound, even? 

 DR. LAUBE. Yes. 

 MR. DEAL. Okay. 

 Dr. Griffeth. 

 DR. GRIFFETH. Speaking strictly personally, I have general support 

for standards. I think it is a very delicate issue that should be approached 

primarily through education rather than any sort of punitive system, and I 

think this, once again, raises the question of how much we are going to 

single out imaging. Are we going to adopt standards for imaging that are 

different or higher than standards for other practices of medicine, say 

surgery or psychiatry? I think it is a very difficult issue. 

 MR. DEAL. Mr. May? 

 MR. MAY. We advocate standards for non-physician personnel 

operating medical imaging equipment. 

 MR. DEAL. Mr. Baumgartner. 

 MR. BAUMGARTNER. We would agree with those recommendations 

as well as the equipment standards for providers. There is a lack of 

consistency amongst the various administration regions on standards 

today. 

 MR. DEAL. Dr. Rucker. 

 DR. RUCKER. We think there are already quite a few standards in 

many different areas. Many of these sort of standards are sort of thinly 

disguised, I think, turf battles, and don’t lead to cost-competitive and 

cost-effective medical care. Certainly in looking at the MedPAC written 

testimony, it doesn’t look like any of the studies that were cited actually 

showed actual harm to patients. 

 MR. DEAL. All right. 

 Let us go back and dissect that a little bit. That is a good word to use 

in medical terms. 

 DR. DOUGLAS. We try to avoid the point until we get to dissecting. 

 MR. DEAL. Dr. Douglas’s point is that it needs to be specialtyspecific. Now, I understand that, and I tend to agree with that. I think it 

maybe can go further and that is whether or not it also needs to be testspecific, instrument specific, whatever test you are using, and the 

examples we have already heard here are, let us see. We had, of course, 
153

ultrasound, whether or not that needs to be carved out as an area that is 

dealt with as a specialized area. We have also heard Dr. Griffeth say 

PET scanning needs to be considered, perhaps, in a little different arena 

and is already regulated in terms of usage. 

 So let me ask this question then. Are there certain types of imaging 

procedures that should be carved out and certified, based on the specialty 

of the medical practice of the person so that someone who may be carved 

out for ultrasound may not be carved out for certification for CTs or PET 

scans or whatever else? Is there any common sense to an approach of 

that nature? Dr. Douglas. 

 DR. DOUGLAS. I think there are, if you can envision what it takes to 

do quality imaging. It starts with picking the right test for the right 

patient, and that is obviously very specific to the patient and to the test. 

The next thing that happens is you acquire images, you acquire pictures 

very specific to the test. Things that might make a good CT scan might 

make a lousy ultrasound, and vice versa. But there are specific things, 

specific imaging protocols, completeness of the study, that would judge 

quality that are generic, but how the particular measure might be for each 

modality. 

 You want the interpretation to be done by a skilled observer who 

knows what they are doing, has been trained to do it, and meets standards 

that exist for those things, and you want the reporting to also meet 

quality measures. Then, of course, that gets translated into altered care 

for the patient and hopefully improved outcomes. 

 MR. DEAL. Unfortunately my time has run out before I get complete 

answers to my questions, so I will yield to Mr. Pallone. 

 MR. PALLONE. Thank you, Mr. Chairman. 

 I wanted initially to ask Mr. Baumgartner a question. 

 It seems there are several levels of technical skill that are required, 

depending upon the complexity of both the patient’s individual 

circumstances and the imaging procedure being performed. For 

example, some services like an OB ultrasound seem possible and even 

preferable to be performed at a physician’s office, but I am sure there are 

other examples of more complex procedures that should be referred to an 

imaging specialist. I just wanted to ask what guidance you can give us to 

assure we are meeting the needs of the patients and physicians while also 

assuring the highest possible quality with any standards. 

 MR. BAUMGARTNER. Sure, and I would agree with that statement, 

Congressman. 

 We are not advocating that certain physicians not be allowed to 

perform those procedures. It is absolutely necessary, but I think you 

have heard from Mr. Donahue and others that there is some overutilization going on. NCQDIS is supporting quality standards, and we 
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think that should be based by equipment type, regardless of who is 

providing that procedure. So whether it is an orthopedist or a radiologist, 

we think the standard should be the same. 

 MR. PALLONE. Okay, thank you. 

 Then I wanted to ask Dr. Laube, on the first panel we heard a lot 

about standards for imaging services; however, I know that ACOG--is 

that right, ACOG? 

 DR. LAUBE. Yes. 

 MR. PALLONE. Has tried very hard to educate its members about the 

appropriate use of imaging services. And when you discussed what 

ACOG is doing in this area and the model programs it uses to help train 

its members, when to order an ultrasound and when an ultrasound is not 

clinically indicated? 

 DR. LAUBE. Yes. We have a variety of ways that we educate, 

beginning in our postgraduate training years, that is the residency, 

beginning year one through year four on a progressively more complex 

basis. For the graduate of a residency program, ACOG offers a number 

of different types of CME courses for practicing physicians to gain CME 

in this area. Our specialty societies, the cancer group, the GYN cancer 

group and the reproductive endocrinologists and infertility doctors are all 

working with AIUM, the American Institute of Ultrasound in Medicine, 

to develop various types of, for lack of better word, credentialing 

procedures or accreditation procedures. 

 So education occurs at a general level through residency for our 

general OB/GYNs on a postgraduate basis, and for our subspecialists on 

a subspecialty basis. 

 MR. PALLONE. Okay, thanks again. 

 And then last, I had a couple of things for Mr. Donahue. 

 I heard concerns that many of the programs that are put in place to 

reduce the utilization of radiology services, such as preauthorization of 

services, are by design broad brush and may simply create additional 

bureaucracy for tests that are appropriately ordered. So wouldn’t it be 

more effective to simply identify the providers whose ordering patterns 

are irregular compared to other similarly situated providers and work 

with them to bring their practices into alignment? By implementing 

across the board programs that affect all providers, doesn’t that cause 

providers whose practices are actually doing the right thing to incur 

unneeded administrative costs? 

 MR. DONAHUE. That is a very good question, Congressman Pallone. 

I think firstly, you have to take a very specific causal factor look at what 

is driving utilization in any region of the country. What we endeavor to 

do is exactly what you described. We use the data, the historical claims 

data, the clinical evidence that we have to design a radiology program 
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that fits the community. One of the things that we have learned over the 

last 10 years, ordering patterns, quality concerns, safety concerns, and 

the capacity and network and access concerns are unique in all of these 

50 States. 

 So our programs, in fact, do very much address the uniqueness of 

specialty ordering. As an example, we have a Board-certified radiologist 

who will have peer-to-peer discussions with radiologists, Board-certified 

cardiologists who will dialogue on the clinical merits of a case when 

cardiologists interact with us, Board-certified gynecologists who will 

interact with us on OB/GYN issues. So I agree with your concern, a 

broad brush approach is not the most effective was to take this on, but 

programs like ours, radiology benefit management programs that address 

the uniqueness of the community and the specialties do work, do add 

value, and we feel could unlock billions of dollars in savings in the 

Medicare Advantage, in the Medicaid programs for this country. 

 MR. PALLONE. Can I just ask a brief follow-up to him? 

 MedPAC recommended to create a profiling mechanism to allow 

physicians to compare their use of imaging with their colleagues. Is that 

something that you agree with, just quickly? 

 MR. DONAHUE. I think physician profiling and peer assessment on a 

confidential basis that MedPAC recommended are very effective. 

 MR. PALLONE. Okay, thank you. 

 MR. DEAL. Dr. Norwood. 

 MR. NORWOOD. Thank you, Mr. Chairman. I just want to point out 

at the beginning, I would like to associate myself with the remarks of all 

of this panel, except Mr. May and Dr. Donahue. Mr. May, I don’t have 

any problems with what you were saying. That is not what this hearing 

is about, and perhaps we will deal with that at another hearing. Whether 

we have Federal standards or not makes me extremely nervous, because I 

never know who is going to write them. Mr. Donahue’s outfit may write 

them, and that scares me to death. I would much rather have physicians 

writing these standards who I believe in and can trust. 

 The first panel we had today proves to me without a doubt that we 

need to pass Mr. Pitts’s bill. Perhaps we need to go further than that. 

Perhaps we need to not put this off for a year, but strike it from the 

record because MedPAC and CMS have no clue what they are talking 

about yet. They proved that all morning; they couldn’t answer questions. 

They had not done thorough studies, and we need to do what you are 

doing now, Mr. Chairman, as the beginning process of trying to learn 

what is going on so we actually--if we do need to legislate, we can do so 

from a point of knowledge rather than speculation. 

 I hear even today some say well, there must be some over-utilization 

going on. Well, maybe there is. I would like somebody to come along 
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and say, and here is why I am saying that. We have the proof of that. 

We know nationally why there is over-utilization, because it is always 

sort of well, we sort of assume it. Surely, there are bad guys--as many 

bad docs as there congressmen, so most likely there is over-utilization 

going on. You can’t prove statements like that unless you are there with 

the patient, and these Board-certified cardiologists that are 10,000 miles 

away from the actual treating physician can’t diagnose over the phone 

very well. They are often wrong. I have been there, done that, and know 

a lot of people who have done the same thing, so you can’t depend on 

stuff like that. 

 So Mr. Chairman, rather than answering questions, I would urge the 

Commerce Committee to get rid of this language, and let us do, unlike 

the Ways and Means Committee did, let us study this issue and try to 

come up with some sensible reforms. 

 With that, I would like the panel to finish answering the Chairman’s 

question that he asked earlier. 

 MR. DEAL. Thank you for that, and if you would yield, I would like 

to modify that just a little bit and clarify what I am getting at. 

 I think we need to understand whether or not there can be certain 

types of test that are so uniquely aligned with certain specialties that they 

should be treated differently for purposes of setting standards of usage, 

certification of equipment perhaps. That was really the base of the 

question. I appreciate your allowing them to answer that, and I guess we 

got to Dr. Moore. 

 DR. VAN MOORE. Thank you, Chairman Deal. 

 It is our belief that if you look at a specific imaging procedure, 

regardless of what it is, whether it is an MR of the knee, a CT of the 

heart, that the physicians that are involved in the interpretation and 

evaluation of the exam should, regardless of specialty, have the same 

criteria in quality in terms of the training that they have, the requirements 

that they have in terms of providing the reports and rendering an opinion 

on that examination. I think not to have that, to have different specialties 

have different standards or different ways, patients will not benefit from 

it. So we would advocate for uniform standards for individuals that are 

providing a study regardless of the specialty. 

 MR. DONAHUE. Thank you, Mr. Chairman. I would like to make an 

attempt to draw consensus from the group, because I think there is one 

area of standards that we would all agree on, and that is on the safety of 

imaging equipment and the rendering of imaging as it relates to the 

patient, and the very concerning issue of radiation exposure. I am sure 

the panel is familiar with the National Academy of Sciences’ study that 

was conducted in 2005 that indicated as the intensity of particularly CT 

equipment increases the level of radiation exposure to a patient, there is a 
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clarion call to monitor radiation dosages for patients and to ensure that 

there are standards on the equipment to make sure that it doesn’t 

erroneously emit radiation that could further provoke carcinogenic 

effects. 

 MR. DEAL. And that is not being done in all instances now? 

 MR. DONAHUE. In all instances, Mr. Chairman, it is not, and there 

are a number of clinical studies that are taking place. And this is another 

important factor I think all of the various distinguished members of the 

panel would agree on. As it relates to your primary focus on the 

question, I believe there are probably categories of specialists who are 

better equipped, in terms of their clinical training and experience, to 

ordering exams, but I wouldn’t go so far as to say that specialty A only 

has the capacity to perform an exam. 

 I will give you just one brief example, lumbar spine MRIs. There are 

radiologists, there are cardiologists, there are specialty trained internists 

who focus on sports medicine who all have terrific credentials and 

experience to order this. One may not. There are some specialties that 

don’t examine the lumbar spine that we would want to assure have no 

opportunity to order an exam like this. 

 MR. DEAL. I have more than exhausted Mr. Norwood’s time. 

 Mr. Pickering. 

 MR. PICKERING. Thank you, Mr. Chairman, and just as an effort to 

try to find both the consensus and clarification, as we talk about 

standards there are different forms of standards in different areas, but is 

there consensus among the panel that there should be standards as far as 

to the education and the credentials of any group performing imaging 

services? Is there a consensus on that front? I would like to ask the 

panel if there is agreement or any disagreement, and if so, what are those 

areas of disagreement? 

 MR. DEAL. Could I ask for clarification? 

 MR. PICKERING. Yes. 

 MR. DEAL. In light of your bill, it relates to the technologists and the 

equipment. Is that where you are focusing it? 

 MR. PICKERING. The focus is there, but it would say for physicians 

or technologists, or anybody who is providing the service. It would 

make the distinction but it would have a minimal Federal standard that 

then the States would implement in order to be eligible for the 

reimbursements. 

 DR. DOUGLAS. We believe that imaging is a whole process, and that 

education of the technologist or stenographer or whoever, as well as the 

physician, is critically important. We think that the standards for each 

laboratory or each type of test have been generated by multi-specialty 

groups and need to do so on a local level with people who understand 
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those tests best. That is not necessarily cardiology, it is not necessarily 

radiology, but we need to respect the standards that are out there and 

work with them. 

 ACC has been part of the Intersocietal Accreditation Commission for 

ultrasound, nuclear, MRI, CT vascular laboratories and we feel it is a 

model program. 

 MR. PICKERING. Dr. Douglas, would you say that additional Federal 

standards on education, would that be helpful, or are you saying that 

what is already out there as far as different specialty groups, this is 

currently sufficient? 

 DR. DOUGLAS. I think an additional standard might be duplicative. 

What would be better and what the ACC supports is mandatory 

accreditation for reimbursement, specialty-specific generated 

accreditation. It could be ACR, it could be cardiologist groups, but 

mandatory for reimbursement. But there is no need for additional 

standards beyond that. 

 MR. PICKERING. And just for clarification, the bill that I introduced 

does not include physicians. We allow you all as you have said to go 

ahead and do your specialty-specific accreditation. 

 DR. DOUGLAS. Lab accreditation includes education and standards 

for stenographers and technicians as well, and not necessarily under 

radiology. 

 DR. VAN MOORE. I think there are two aspects of the question that 

you have. One is as Dr. Douglas talks about, the accreditation programs 

and the American College has got accreditation programs which looks at 

the facilities, the equipment, the quality of the images, the quality 

training of the physicians, the quality of training of the technologists to 

ensure those all meet certain standards. If you look at also then the 

MQSA, that clearly that if you are going to do mammography and if you 

are going to be involved in the care of those patients you need to have 

certain minimum requirements and continuing medical education 

specific to the area that you are rendering the high level of expertise in. 

So that if you combine those with respect to accreditation, looking at 

some of the components that have made MQSA so successful and also 

look at the requirements of IDTFs and how if you fold all those into a 

complete package, we believe that that will be a solution where 

utilization in and of itself, because there will be fewer exams that are 

ordered or requested or performed that are less appropriate, that in and of 

itself will reduce utilization of procedures, and by doing that will save 

the money that you are looking to save with respect to the offset, as I said 

in my initial comments. 

 MR. DONAHUE. I would add, Congressman, that this is such a 

dynamic and evolving technology that the notion of continuing education 
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standards that keep up with the evolution of this technology greatly 

appeal to me. I agree with Dr. Douglas. There are numerous folks, 

physicians, and ultrasound techs and rad techs and others who are 

involved with this who need to keep up with the nuances and the 

emerging opportunity to use this technology in the most effective way. 

 DR. LAUBE. Yes, I think I support standards in education, obviously, 

as I am an educator, and we have what in effect is a Federal or 

nationwide standards, and that is called Board certification. So we 

already promote the notion of standards that are applicable to all the 

Nation’s 50,000 obstetricians, gynecologists, as well as our efforts at 

continuing medical education. In this regard for us, of course, as I have 

mentioned, it is ultrasound, but yes, I certainly support standards. That is 

what we are all about. But I think we can go about it through our own 

expert specialty societies. 

 MR. DEAL. I am going to ask indulgence of the committee. This end 

never gets to answer anything because we run out of time. Unless 

somebody objects, let us let that end of the panel answer that question. 

Dr. Griffeth, you may proceed. 

 DR. GRIFFETH. The scope of my comments is limited to positron 

emission tomography, means that I have a little less to say probably 

about this since PET imaging has come along later than the other types 

of imaging. We are talking about even though it was invented back in 

the mid-‘70s, it has been clinically adopted much more slowly, 

predominantly because it was the later of the advanced medical imaging 

technologies to come along which provided the opportunity for CMS to 

regulate or over-regulate its utilization and has provided opportunities for 

other State regulatory agencies to impose those sorts of criteria regarding 

who can do PET imaging. My guess is that a Federal regulation 

regarding the interpretation of PET imaging is likely not to be any more 

strict than what is already involved in most State regulations regarding 

performance and interpretation of tests utilizing radioactive materials. 

 MR. MAY. Standards of quality will affect the overall quality, safety, 

and cost of imaging services. Dr. Norwood asked why we were here, 

and I think the answer is because quality standards will restore money 

back to Medicare, if the tests are-- 

 MR. PICKERING. Mr. May, could you pull the microphone a little bit 

closer? 

 MR. MAY. I am sorry. Thank you. 

 MR. PICKERING. No trouble. 

 MR. MAY. The standards will affect overall quality, safety, and cost 

of providing medical imaging services, and unfortunately, the States 

haven’t done their job. There was a bill passed in 1981 that addressed 

this issue, and it set forth discretionary standards for the States. Only 41 
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States now regulate radiographers. Those are people that administer Xrays. Only 30 States regulate radiation therapists. Those are people that 

use medical imaging or radiation to treat cancer, and only 25 States 

regulate nuclear medicine technology. These are people that use radio 

pharmaceuticals to detect imaging. 

 So unfortunately, the States have not done their job. We do need 

standards that may vary from modality to modality, but the outcome, the 

quality standards should be the same in terms of good patient care. 

 MR. BAUMGARTNER. Congressman, we would support minimum 

education standards, and if the States would like to add to that, they 

could feel free to do that still, but I think some minimum education 

standards for technologists is appropriate. 

 DR. RUCKER. I think physicians order imaging studies to ask and 

answer clinical questions, and I think those questions vary widely. For 

example, I might ask Dr. Douglas, who as it turns out was my resident 

several years ago, for an elaborate cardiac echo on valves. If I am taking 

care of somebody in cardiac arrest, I might just look quickly at that heart 

to see whether the heart is beating or not. So you know, both are echo of 

the heart, but very, very different and probably need different billing 

codes. So I think there are some very different specialty-specific uses of 

these imaging studies. 

 MR. DEAL. We are going to have to try to hurry if we get these 

questions in. 

 Mr. Pitts, you are recognized. 

 MR. PITTS. Thank you. I will start down at the other end, Dr. 

Rucker. 

 DR. RUCKER. Thank you. 

 MR. PITTS. In light of the fact that MedPAC raises doubts about the 

value of imaging and, in particular, bases much of that concern on the 

rapid growth in imaging utilization, are you aware of any peer-reviewed 

literature that sheds additional light on this point? 

 DR. RUCKER. There is a tremendous amount of peer-reviewed 

literature looking at the benefits of imaging, literally in the tens of 

thousands of articles. For folks who are interested in that in any specific 

specialty, the National Library of Medicine has a wonderful website, 

pubmed.gov. Just type in the name of the imaging study, the disease, 

and you will get a flavor of the simply stunning amount of scientific 

literature that backs up many of these practices. 

 MR. PITTS. I don’t know if you passed out this booklet to the 

members or not, but this seems to tell the story of imaging. Can you 

comment on what this illustrates for the members? I don’t know if they 

have it or not. 
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 DR. RUCKER. Yes, and we are happy to provide any member who 

may not have gotten a copy of it. It is a book of images from 64 sliced 

CT scans. It shows, I think, the tremendous technology. It shows the 

stunning clarity of these computer-generated images, and I think it 

highlights, Representative Pitts, the rapidity of the change which also 

gets to whether standards could begin to evolve anywhere near as rapidly 

as the imaging technology that the manufacturers are providing is 

changing. We suspect that is not the case. 

 MR. PITTS. Dr. Griffeth, why is it so important for such advanced 

imaging to be available out in the community rather than having patients 

get their imaging done at large medical centers and just having the 

treatments done in the communities? 

 DR. GRIFFETH. The simple fact is that most of us believe that the 

most effective cancer care is integrated cancer care, and there has been a 

huge push over the past couple of decades, both from the provider 

community whose primary issue is the delivery of this better patient care, 

and from the payer’s standpoint, who as far as I know, the vast majority 

of their data showed that care is more economic out in the community 

than it is at major medical centers. I think the value of having the 

imaging close by for patient convenience--we are talking about cancer 

patients who are very ill who may have, unfortunately, as part of the 

discussion today, repetitive imaging studies who have to have those 

imaging studies integrated very closely into their patient care. It is not a 

matter of being able to often get back a report of a study and be able to 

utilize that. There generally is a considerable benefit from one-to-one 

interaction between the imager and the physician treating the patient. 

 So for all of those reasons, not to mention the fact that so much of 

our patient base in oncology is out in rural areas that are pretty remote 

from major medical centers that the simple added burden on a patient 

population that need to know more added burdens I think would be the 

crux of my issue. 

 MR. PITTS. Dr. Douglas, in your statement you state that 

appropriateness criteria will weed out inappropriate utilization, improve 

imaging quality, and facilitate reimbursement in a performance-based 

system. To what extent are these criteria followed, and what, if anything, 

is done to ensure compliance? Is it voluntary? Are physicians penalized 

for not following them? How do the guidelines work? 

 DR. DOUGLAS. At this point, the guidelines have just been published 

a few months ago and we are in the process of implementing them. We 

work very closely with the medical directors of payers and have our fifth 

annual Medical Directors Institute coming up this fall and hope to learn 

from them how they are using these criteria to better understand imaging 

amongst their beneficiaries. 
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 MR. PITTS. And Dr. Griffeth, you mentioned in your statement a 

Trailblazer, Dr. Burkin, and you support his approach to establishing 

appropriate frequency guidelines for imaging. Can you elaborate a little 

bit on that? 

 DR. GRIFFETH. Dr. Burkin is one of the medical directors for 

Trailblazer Healthcare, one of CMS’s carriers, and CMS as part of their, 

as I mentioned before, tight regulation of eligibility requirements for 

patients having PET study has also given the carriers leeway to establish 

these frequency guidelines, particularly for follow-up studies performed 

to determine how a patient’s treatment has worked or whether a patient’s 

disease has recurred. Several payers have addressed this as a possible 

area of over-utilization. Dr. Burkin has, I think, taken a very rational 

approach that is still in evolution of consulting very closely with folks 

from both the imaging side and from the treatment side to determine 

what appropriate clinical guidelines might be for those frequency 

limitations. 

 MR. DEAL. Dr. Burgess, you are recognized for questions. 

 MR. BURGESS. Thank you, Mr. Chairman. 

 Dr. Griffeth, we tried to get the information from MedPAC and 

CMS, and it was difficult to do, but do you have an opinion as to the 

value of imaging in regards to the Medicare system? Is this something 

that costs or pays? 

 DR. GRIFFETH. Obviously, I wouldn’t be sitting here if I didn’t think 

it paid, but you know, the fact of the matter is while we have spent a lot 

of time talking about cost effectiveness, and I am here primarily as a 

patient advocate, I would be here talking to you and saying the same 

thing even if I did think that PET imaging in specific was costing the 

budget money, because I believe that this is appropriate patient care. 

 Having said that, yes, I believe we are saving money on a daily basis. 

I do believe that there is opportunity for over-utilization. In my 

experience, if there is considerable over-utilization, it overwhelmingly is 

coming from physicians who might be being overly cautious with taking 

care of their patients and they have been convinced of the value of 

advanced medical imaging to answer questions they couldn’t have 

answered before. 

 So my personal opinion is that yes, we are certainly saving money. 

Perhaps with some refinement of utilization guidelines and education, we 

could save a bit more. 

 MR. BURGESS. On the--and I apologize if you have already 

answered this question. I got distracted by this very colorful booklet that 

was handed to me, Dr. Rucker. The issue came up, I think Mr. 

Baumgartner brought up the issue about a ban on self-referral. How 
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would that affect a group such as yours, U.S. Oncology, and your ability 

to interact with physicians in your own group? 

 DR. GRIFFETH. Well, I am not sure. 

 MR. BURGESS. I was actually addressing it to you, Dr. Griffeth. 

 DR. GRIFFETH. I need to make clear, I am not a member of U.S. 

Oncology. U.S. Oncology reimburses my department for part of my time 

to help them determine appropriate utilization of PET and their oncology 

patients. I must say that our interaction with the oncologists is, as I 

alluded to earlier, crucial in the care of the patient. The two-way 

interaction, educating them both in terms of the value and the limitations 

with PET, and them educating us regarding what sort of patient care 

decisions they need to make is invaluable. 

 MR. BURGESS. Dr. Laube--and I guess our time is drawing to a 

close, Mr. Chairman. I get the impression from you that ultrasound in 

OB/GYN is different than perhaps other imaging technologies in other 

specialties. Is that a fair statement? 

 DR. LAUBE. Yes, different in the sense that we need to have it dayto-day in our clinical practice onsite in real time. And so I think we are 

considerably different from the others. We don’t want to do MRIs or 

CTs for sure, and we don’t want to learn how to do them. 

 MR. BURGESS. The issue was brought up on standards for education. 

In your testimony, you have certainly drawn--posed a question, I think in 

my mind at least, and that is as the residency training for the average 

OB/GYN resident in ultrasound has increased, the training for the 

average radiology resident may have reduced in OB/GYN because of the 

lack of clinical material which is being, of course, attended to 

appropriately by the OB/GYN resident. Do you see that as an issue for 

us going forward? 

 DR. LAUBE. I personally don’t. I think that is an appropriate shift, 

from my perspective, of course, for the reasons I just mentioned. We 

need to have our tool day-to-day, 24/7, 365, and I think that-- 

 MR. BURGESS. Let me just interrupt briefly. When it comes then to 

the issue of accreditation, is an OB/GYN residency going to be an 

acceptable credential for someone who is to be accredited in ultrasound, 

and conversely, is a radiology residency going to be an acceptable 

credential in the same field? 

 DR. LAUBE. I don’t think for us that the radiologist can or should 

accredit us. I think we should take care of ourselves because that is what 

we do, and as you pointed out, with our experience going vastly up in the 

last 10 years, theirs has gone dramatically down in our field. 

 MR. BURGESS. Yes, sir. Thank you, Mr. Chairman. 

 MR. DEAL. Thank you. 

 Ms. Myrick. 
164

 MS. MYRICK. Well, I know we are out of time, so in interest of that, 

I know everybody has to go vote. I will just thank you all and any 

questions I have I will get to you individually. Thanks. 

 MR. DEAL. Let me also thank all of you, and I apologize that we are 

having to rush out, but we are just about out of time on the floor for a 

vote that has been going on. Very interesting panel, very interesting 

discussions. If you wish to supplement any of your answers or provide 

additional information, we would encourage you to do so. 

 Thank you all for your presence today. With that, this hearing is 

adjourned. 

 [Whereupon, at 1:45 p.m., the subcommittee was adjourned.] 
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RESPONSE FOR THE RECORD OF HERB KUHN, DIRECTOR, CENTER FOR MEDICARE 

MANAGEMENT, CENTERS FOR MEDICARE & MEDICAID SERVICES, U.S. DEPARTMENT OF 

HEALTH AND HUMAN SERVICES
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RESPONSE FOR THE RECORD OF GLENN M. HACKBARTH, CHAIRMAN, MEDICARE PAYMENT 

ADVISORY COMMISSION
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