Medicare: Higher Use of Costly Prostate Cancer Treatment by Providers Who Self-Refer Warrants Scrutiny
Published: 2013-07-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Questions have been raised about self-referral's role in Medicare Part B expenditures' rapid growth. Self-referral occurs when a provider refers patients to entities in which the provider or the provider's family members have a financial interest. Services that can be self-referred under certain circumstances include IMRT, a common and costly treatment for prostate cancer. GAO was asked to examine Medicare self-referral trends among radiation oncology services. This report examines (1) trends in the number of and expenditures for prostate cancer-related IMRT services provided by self-referring and non-self-referring provider groups from 2006 through 2010 and (2) how the percentage of prostate cancer patients referred for IMRT may differ on the basis of whether providers self-refer. GAO analyzed Medicare Part B claims and developed a claims-based methodology to identify self-referring groups and providers. GAO also interviewed officials from the Centers for Medicare & Medicaid Services (CMS), which administers Medicare, and other stakeholders.
section_title: What GAO Found
paragraphs: The number of Medicare prostate cancer-related intensity-modulated radiation therapy (IMRT) services performed by self-referring groups increased rapidly, while declining for non-self-referring groups from 2006 to 2010. Over this period, the number of prostate cancer-related IMRT services performed by self-referring groups increased from about 80,000 to 366,000. Consistent with that growth, expenditures associated with these services and the number of self-referring groups also increased. The growth in services performed by self-referring groups was due entirely to limited-specialty groups--groups comprised of urologists and a small number of other specialties--rather than multispecialty groups.
Providers substantially increased the percentage of their prostate cancer patients they referred for IMRT after they began to self-refer. Providers that began self-referring in 2008 or 2009--referred to as switchers--referred 54 percent of their patients who were diagnosed with prostate cancer in 2009 for IMRT, compared to 37 percent of their patients diagnosed in 2007. In contrast, providers who did not begin to self-refer--that is, non-self-referrers and providers who self-referred the entire period--experienced much smaller changes over the same period. Among all providers who referred a Medicare beneficiary diagnosed with prostate cancer in 2009, those that self-referred were 53 percent more likely to refer their patients for IMRT and less likely to refer them for other treatments, especially a radical prostatectomy or brachytherapy. Compared to IMRT, those treatments are less costly and often considered equally appropriate but have different risks and side effects. Factors such as age, geographic location, and patient health did not explain the large differences between self-referring and non-self-referring providers. These analyses suggest that financial incentives for self-referring providers--specifically those in limited specialty groups--were likely a major factor driving the increase in the percentage of prostate cancer patients referred for IMRT. Medicare providers are generally not required to disclose that they self-refer IMRT services, and the Department of Health and Human Services (HHS) lacks the authority to establish such a requirement. Thus, beneficiaries may not be aware that their provider has a financial interest in recommending IMRT over alternative treatments that may be equally effective, have different risks and side effects, and are less expensive for Medicare and beneficiaries.
section_title: What GAO Recommends
paragraphs: Congress should consider directing the Secretary of Health and Human Services, whose agency oversees CMS, to require providers to disclose their financial interests in IMRT to their patients. GAO also recommends that CMS identify and monitor self-referral of IMRT services. HHS disagreed with GAO's recommendation. Given the magnitude of GAO's findings, GAO maintains CMS should identify and monitor self-referral of IMRT services.

section_title: Letter
paragraphs: Expenditures for Medicare Part B services—which include physician and  other outpatient services—have grown rapidly, increasing annually at   5.9 percent, on average, from 2007 through 2011. In comparison, the  national economy grew by less than half that rate during the same period.  Policymakers have questioned whether some of the growth in spending  for Part B services may be attributed to self-referral, which occurs when  providers refer their patients to entities—such as themselves or a group  practice—in which they or a member of their families have a financial  relationship. While federal law generally prohibits self-referral under  Medicare, there are exceptions for certain services and arrangements.  Among the Medicare diagnostic and therapeutic services that may be  self-referred under one of these exceptions is intensity-modulated  radiation therapy (IMRT), a form of external beam radiation therapy  (EBRT) commonly used to treat prostate cancer. While there are multiple  effective treatments for prostate cancer, IMRT is one of the most costly  options. In 2010, expenditures for prostate cancer–related IMRT services  accounted for about 55 percent of the $1.27 billion that Medicare paid for  all IMRT services under Medicare Part B.
Questions have been raised about the effect of self-referral arrangements  on the utilization of IMRT services reimbursed under Medicare Part B.  Critics of such self-referral arrangements suggest that there may be a  financial incentive to overutilize IMRT because diagnosing providers can  earn more by self-referring IMRT services than if patients were referred  for other treatments. Other treatments for prostate cancer are often  considered equally appropriate, as experts have not established a “gold  standard” for the treatment of cancer that has not spread beyond the  prostate (i.e., localized prostate cancer), which represents a large  majority of newly diagnosed prostate cancers.arrangements contend that the self-referral of IMRT services does not  affect clinical decision making and that patients benefit from self-referral  through, for example, improved coordination among the providers who  diagnose and treat patients.
You asked us to examine Medicare self-referral trends among radiation  oncology services. In this report, we (1) compare trends in the number of  and expenditures for prostate cancer–related IMRT services provided by  self-referring and non-self-referring provider groups from 2006 through  2010 and (2) examine how the percentage of prostate cancer patients  referred for IMRT may differ on the basis of whether providers self-refer.
To compare trends in the number of and expenditures for prostate  cancer–related IMRT services provided by self-referring and non-self- referring groups in provider offices from 2006 through 2010, we analyzed   We identified  IMRT delivery claims from the Medicare Part B Carrier file.prostate cancer–related IMRT services using diagnosis codes on the  claims. Because there is no indicator or “flag” on the claim that identifies  whether services are self-referred or non-self-referred and the Centers for  Medicare & Medicaid Services (CMS), the agency that administers  Medicare, has no other method for identifying whether a service was self- referred, we developed a claims-based methodology for identifying  provider group practices as self-referring or non-self-referring.  Specifically, we classified groups as self-referring if the providers who  administered IMRT for the group had a financial relationship with the  same entity as the provider who referred the IMRT service. Additionally,  in order to be considered self-referring, groups had to meet other volume- related criteria, such as self-referring at least half of the courses of IMRT  therapy the group provided. To ensure that how we defined our criteria  were reliable, we tested alternative thresholds for defining self-referring  groups and found that the observed patterns were similar regardless of  the threshold used. We also analyzed trends in the utilization of prostate  cancer–related IMRT services by whether the service was performed by a  limited-specialty or multispecialty group. We defined groups as limited  specialty in a given year if more than 75 percent of its office visits were  performed by urologists, nonphysician practitioners (e.g., physician  assistants), or providers whose specialty was related to the diagnosis or  treatment of cancer, such as radiation oncologists. The remaining groups  were comprised of providers from a large number of different specialties  and were considered multispecialty groups. We examined the trends in  prostate–cancer related IMRT services performed in hospital outpatient  departments for context.
To examine how the percentage of prostate cancer patients referred for  IMRT may differ on the basis of whether providers self-refer, we  performed two separate analyses using the Medicare Part B Carrier and  hospital outpatient files. First, we compared the percentage of prostate  cancer patients that self-referring and non-self-referring providers referred  for IMRT and other treatments within a year of being diagnosed in 2007  or 2009. We classified referring providers as self-referring if they were the  performing provider on a claim that was paid to a self-referring provider  group in the year of, before, or after a beneficiary’s prostate cancer  diagnosis. All other providers were considered non-self-referring. In  addition, we examined how, if at all, the referral patterns for non-self- referring and self-referring providers were affected by beneficiary  characteristics such as age, geographic location (i.e., urban or rural), and  beneficiary health. As part of our examination of beneficiary health, we  examined how, if at all, provider referral patterns were affected by clinical  characteristics of patients’ prostate cancers, which were obtained from  the New York State Cancer Registry, for beneficiaries who lived in New  York and were diagnosed with prostate cancer in either 2007 or 2009.  The results of the New York analysis are not generalizable to the entire  Medicare population. We used clinical information from the New York  State Cancer Registry because such information is not available on  Medicare claims, and we determined that the geographic areas included  in another common source of such information—Surveillance  Epidemiology and End Results (SEER) data—did not sufficiently overlap  with areas in which IMRT self-referral was prevalent during our study  period. Second, we determined whether the percentage of providers’  prostate cancer patients referred for IMRT and other treatments changed  after they began to self-refer. Specifically, we identified a group of  providers, which we called “switchers,” that did not self-refer in 2006 or  2007 but began to self-refer in either 2008 or 2009. We then analyzed the  change in the percentage of switchers’ newly diagnosed prostate cancer  patients referred for IMRT and other treatments before and after  switchers began to self-refer. We compared the change for this group of  providers to the change among providers who did not begin to self-refer  IMRT services during this period. For both analyses, we counted IMRT  and other treatments regardless of the setting in which they were  performed.
We took several steps to ensure that the data used to produce this report  were sufficiently reliable. Specifically, we assessed the reliability of the  CMS data we used by interviewing officials responsible for overseeing  these data sources, reviewing relevant documentation, and examining the  data for obvious errors. We determined that the data were sufficiently  reliable for the purposes of our study. (See app. I for more details on our  scope and methodology.)
We conducted this performance audit from May 2010 through July 2013  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Prostate cancer patients choose among multiple treatments that are often  considered equally appropriate but can have different risks and side  effects. The treatments can also vary in cost, with IMRT being one of the  most costly options.
subsections: section_title: Diagnosis and Treatment of Prostate Cancer
paragraphs: Cancer of the prostate—a gland located at the base of the urinary  bladder—is the second most common cancer among men in the United  States, with approximately 1 in 6 men receiving a diagnosis of prostate  cancer in his lifetime. In 2010, there were an estimated 218,000 new  cases of prostate cancer and approximately 32,000 deaths due to  prostate cancer. Most men in the United States are diagnosed with  prostate cancer as a result of an abnormal digital rectal exam or prostate- specific antigen test. After an abnormal test result, beneficiaries often  undergo a prostate biopsy, during which a provider—typically a  urologist—removes small amounts of prostate tissue. Another provider  then examines the tissue to determine whether a beneficiary has prostate  cancer.
IMRT is one of multiple treatment options available to patients with  prostate cancer. The type of treatment a prostate cancer patient chooses  depends on a number of different factors such as life expectancy, overall  health, personal preferences, provider recommendations, and the clinical  characteristics of a patient’s prostate cancer. For many men, multiple  treatment options are considered equally appropriate. For instance,  IMRT, brachytherapy, and a radical prostatectomy are all among the  treatments considered appropriate for men with low-risk prostate  cancer. Even though such treatments are often considered equally  appropriate, the risks and side effects for each treatment are different.  Compared to IMRT, prostate cancer patients undergoing a radical  prostatectomy have a higher rate of short term urinary problems and  erectile dysfunction but do not face bowel-related side effects, which are  experienced by some men undergoing IMRT. Compared to IMRT,  prostate cancer patients undergoing brachytherapy have lower rates of  bowel-related side effects but about 1 in 10 patients undergoing  brachytherapy experience acute urinary retention. Also, several studies  have reported that physician recommendations play a large role in  influencing a patient’s decision, and another study found that the use of  a particular prostate cancer treatment decreased after its payment was  reduced, suggesting that financial incentives may have influenced  treatment decisions.are generally not required to disclose to their patients that they have a   Currently, providers who self-refer IMRT services  financial interest in the service.treatments are summarized in table 1.
Medicare reimbursement rates for IMRT delivery services varied over  time, and rates are not directly comparable between settings.  Beneficiaries receive approximately 45 separate IMRT delivery services  over several weeks during a course of IMRT to treat prostate cancer.  Medicare beneficiaries predominantly receive IMRT delivery services in  two settings—physician offices or hospital outpatient departments. The  Medicare reimbursement per IMRT delivery service increased from  approximately $319 to $421 from 2006 to 2010 and then to $484 by 2013  for services performed in hospital outpatient departments. For services  performed in physician offices, the reimbursement rate decreased from  approximately $690 to $511 from 2006 to 2010 and then to $406 by  2013. The reimbursement rates for IMRT delivery services performed in  physician offices and hospital outpatient departments are not directly  comparable. For instance, if an IMRT delivery service was performed in a  hospital outpatient department, payment includes the technical  component for image guidance, which is almost always furnished with  an IMRT service. In physician offices, image guidance is reimbursed  separately.
Researchers have consistently found that courses of IMRT, which include  IMRT delivery and other services, are more costly than other treatments  for prostate cancer, with the exception of proton therapy. Researchers  have found IMRT to be more costly despite differences among studies in  design and methodology, such as the services counted toward total  treatment costs, the duration of time during which costs are studied   (e.g., first year costs vs. lifetime costs), and the patient population  studied. One recent study found that, among men diagnosed with  prostate cancer in 2005, the cost to Medicare per course of treatment was  approximately $14,000 to $15,000 higher for men receiving IMRT  ($31,574) than for men who received brachytherapy ($17,076) or a  prostatectomy ($16,469 or $16,762, depending on the type of  prostatectomy). Despite the 2013 reduction in the Medicare  reimbursement rate for IMRT delivery services performed in physician  offices, we found that IMRT remains substantially more expensive than  other treatments for prostate cancer, with the exception of proton  therapy.
section_title: Number of and Expenditures for Prostate Cancer– Related IMRT Services Provided by Self-Referring Groups Grew Rapidly, while Declining for Non- Self-Referring Groups
paragraphs: We found that the number of and expenditures for Medicare prostate  cancer–related IMRT services performed by self-referring groups grew  rapidly from 2006 through 2010. In contrast, the number of and Medicare  expenditures for prostate cancer–related IMRT services performed by  non-self-referring groups declined over the period.
subsections: section_title: Number of Prostate Cancer–Related IMRT Services Performed Increased among Self- Referring Groups— Specifically, Limited- Specialty Groups—and Decreased among Non- Self-Referring Groups
paragraphs: From 2006 through 2010, the number of prostate cancer–related IMRT  services performed by self-referring groups increased rapidly, while the  number performed by non-self-referring groups decreased. The number  of prostate cancer–related IMRT services performed by self-referring  groups increased from approximately 80,000 to 366,000, an annual  growth rate of 46 percent (see fig. 1). Consistent with that growth, the  number of self-referring groups also increased rapidly over the period. In  contrast, the number of prostate cancer–related IMRT services performed  by non-self-referring groups in physician offices decreased from  approximately 490,000 to 466,000, an annual decrease of 1 percent.
The rapid increase in prostate cancer–related IMRT services performed  by self-referring groups coincided with several other trends from 2006  through 2010. First, the number of prostate-cancer related IMRT services  performed in hospital outpatient departments and by self-referring and  non-self-referring groups all grew from 2006 to 2007. After 2007, the rapid  increase in prostate cancer–related IMRT services performed by self- referring groups coincided with declines in these services within hospital  outpatient departments and among non-self-referring groups. Overall  utilization of prostate cancer–related IMRT services therefore remained  relatively flat across these settings after 2007, indicating a shift away from  hospital outpatient departments and non-self-referring groups and toward  self-referring groups. (See app. II for information on the trends in IMRT  services performed in hospital outpatient departments.) Second, while the  number of prostate cancer–related IMRT services provided to Medicare  fee-for-service (FFS) beneficiaries has stabilized since 2007, the  percentage of newly diagnosed Medicare beneficiaries receiving IMRT  has increased. While seemingly contradictory, these two trends  occurring simultaneously can in part be explained by (1) a decrease in the  total number of Medicare FFS beneficiaries from 2006 through 2010  and (2) a decrease in the number of men newly diagnosed with prostate  cancer. Third, the increasing percentage of prostate cancer patients  receiving IMRT may partially be explained by a shift from an older form of  EBRT—3D-CRT—to a newer form—IMRT, though the largest effect of  this substitution likely occurred earlier in our study period as IMRT largely  replaced 3D-CRT by 2007.
In 2010, urologists performed approximately 89.1 percent of office visits billed under  limited-specialty groups, compared to 5.7 percent for multispecialty groups. Additionally,  the average number of specialties that billed office visits under limited-specialty groups in  2010 was 3.3, compared to 36.2 for multispecialty groups.
56,000 to 343,000. In contrast, the number of such services performed by  multispecialty self-referring groups, which were comprised of a large  number of different provider types, declined slightly, going from  approximately 23,000 to 22,000.
Medicare expenditures for prostate cancer–related IMRT services  performed by self-referring groups increased rapidly from 2006 through  2010, while decreasing for services performed by non-self-referring  groups. Specifically, expenditures for prostate cancer–related IMRT  services performed by self-referring groups increased from $52 million to  $190 million, an average increase of 38 percent a year (see fig. 3). In  contrast, expenditures for prostate cancer–related IMRT services  performed by non-self-referring groups in physician offices declined by an  average of 8 percent a year. For comparison, expenditures for prostate  cancer–related IMRT services performed in hospital outpatient  departments grew an average of 7 percent a year during the period we  studied. (For more information about hospital outpatient department  expenditure trends, see app. II.)
section_title: Self-Referring Providers Referred Their Prostate Cancer Patients for IMRT More Frequently than Non-Self-Referring Providers
paragraphs: Self-referring providers were more likely to refer their Medicare prostate  cancer patients for IMRT and less likely to refer them for other treatments  when compared to non-self-referring providers. In addition, after providers  began self-referring IMRT services, they substantially increased the  percentage of their prostate cancer patients they referred for IMRT, in  contrast to providers who did not begin to self-refer IMRT services during  the same period.
subsections: section_title: Self-Referring Providers Were 53 Percent More Likely to Refer Their Prostate Cancer Patients for IMRT than Non-Self- Referring Providers
paragraphs: Self-referring providers were more likely to refer their prostate cancer  patients for IMRT and less likely to refer them for other treatments  compared to non-self-referring providers. Self-referring providers referred  approximately 52 percent of their patients who were newly diagnosed with  prostate cancer in 2009 for IMRT, while non-self-referring providers  referred 34 percent of their patients for IMRT (see table 2). Self-referring  providers also referred a lower percentage of their prostate cancer  patients for nearly all other types of treatments compared to non-self- referring providers, with the largest differences among patients being  referred for brachytherapy or a radical prostatectomy. Other differences  were smaller—self-referring providers were about 8 percent less likely to  refer their patients for active surveillance compared to non-self-referring  providers. (For alternative groupings in which beneficiaries are sorted into  discrete treatment categories, see app. III.)
The difference between self-referring and non-self-referring providers in  the percentage of their prostate cancer patients referred for IMRT was  largely due to self-referring providers who belonged to limited-specialty  groups. Self-referring providers who belonged to a limited-specialty group  referred approximately 52 percent of their patients diagnosed with  prostate cancer in 2007 or 2009 for IMRT. In contrast, self-referring providers who belonged to a multispecialty group referred approximately  36 percent of their patients diagnosed with prostate cancer in 2007 or  2009 for IMRT, only moderately higher than the 33 percent of non-self- referring providers’ patients diagnosed with prostate cancer in 2007 or  2009 who were referred for IMRT.
Differences in the percentage of prostate cancer patients referred for  IMRT between self-referring and non-self-referring providers persisted  after accounting for differences in age, geographic location (i.e., urban or  rural), and beneficiary health, including clinical characteristics of prostate  cancers for a subset of beneficiaries who lived in New York.
Differences between self-referring and non-self-referring providers in the  percentage of prostate cancer patients that were referred for IMRT could  not be explained by differences in age. The average age when a  beneficiary was diagnosed with prostate cancer was the same for patients  of both self-referring and non-self-referring providers, and, regardless of  their patients’ ages, self-referring providers were more likely to refer their  patients for IMRT compared to non-self-referring providers. The average  age when a beneficiary was diagnosed with prostate cancer was 74 years  old for patients of both self-referring and non-self-referring providers.  Depending on the age range, self-referring providers were anywhere from  48 percent to 62 percent more likely to refer their patients for IMRT  compared to non-self-referring providers. For more information about how  the percentage of prostate cancer patients referred for IMRT and other  treatments by self-referring and non-self-referring providers changed on  the basis of the age of a beneficiary, see appendix IV.
Differences between self-referring and non-self-referring providers in the  percentage of prostate cancer patients that were referred for IMRT could  not be explained by differences in geographic location. Self-referring  providers were more likely to refer their patients for IMRT compared to  non-self-referring providers, regardless of differences in geographic  location. Self-referring providers were 52 percent more likely to refer  their patients that lived in urban areas for IMRT compared to non-self- referring providers. Similarly, self-referring providers were 42 percent  more likely to refer their patients that lived in rural areas for IMRT  compared to non-self-referring providers.
Differences between self-referring and non-self-referring providers in the  percentage of prostate cancer patients that were referred for IMRT could  not be explained by differences in beneficiary health. Self-referring and  non-self-referring providers’ prostate cancer patients had a similar  average health status, and self-referring providers were more likely to  refer their patients for IMRT compared to non-self-referring providers,  regardless of whether their patients had low-, intermediate-, or high-risk  prostate cancer. Self-referring providers’ patients had an average risk  score—a proxy for health status—of 0.94 in 2009, and non-self-referring  providers’ patients had an average risk score of 0.92, indicating that the  two patient populations had a similar average health status. In cases  where we had information on the clinical characteristics of patients’  prostate cancer, we found that self-referring providers were more likely  than non-self-referring providers to refer their patients for IMRT, although  the difference decreased as prostate cancer risk level increased.  Specifically, self-referring providers were 91 percent, 41 percent, and   33 percent more likely than non-self-referring providers to refer patients  with low-, intermediate-, and high-risk prostate cancer for IMRT,  respectively. The difference in IMRT referrals made by self-referring and  non-self-referring providers narrowed as patients’ prostate cancer risk  level increased in part because non-self-referring providers increased  IMRT referrals and decreased brachytherapy referrals as cancer risk  levels increased. In comparison, self-referring providers referred similarly  small percentages of patients for brachytherapy for all three risk levels,  and their IMRT referrals increased only moderately as their patients’ risk  level increased.
section_title: Providers Substantially Increased the Percentage of Their Prostate Cancer Patients They Referred for IMRT after They Began to Self-Refer
paragraphs: Providers that switched from being non-self-referring to self-referring— that is, switchers—referred a greater percentage of their prostate cancer  patients for IMRT after they began to self-refer (see table 3). Specifically,  switchers referred 37 percent of their patients who were diagnosed with  prostate cancer in 2007 for IMRT. After beginning to self-refer, switchers  referred 54 percent of their patients who were diagnosed with prostate  cancer in 2009 for IMRT. While providers that did not begin to self-refer— that is, self-referrers and non-self-referrers—referred different  percentages of their patients who were diagnosed with prostate cancer in  2007 for IMRT, the percentages of their patients they referred for IMRT  remained relatively consistent over the same period when switchers  dramatically increased the percentage of their patients they referred for  IMRT. This suggests that the increase seen among switchers was likely  not due to provider characteristics that were relatively stable over time or  changes in the way all providers treated prostate cancer in response to  such things as changing treatment guidelines. (See app. V for more  information about how the percentage of beneficiaries switchers, non-self- referring providers, and self-referring providers referred for a given  treatment.)
section_title: Conclusions
paragraphs: IMRT has been shown to be an effective treatment option for localized  prostate cancer and allows radiation to be delivered to the tumor while  minimizing damage to normal tissue. Proponents of self-referral  arrangements contend that the self-referral of IMRT services does not  affect clinical decision making and that patients benefit from self-referral  through, for example, improved coordination among the providers who  diagnose and treat patients. However, our review indicates that Medicare  providers that self-referred IMRT services—particularly those practicing in  limited-specialty groups—were substantially more likely to refer their  prostate cancer patients for IMRT and less likely to refer them for other,  less costly treatments, especially brachytherapy or a radical  prostatectomy, compared to providers who did not self-refer. The  relatively higher rate of IMRT referrals among self-referring providers  cannot be explained by beneficiary age, geographic location, or health.  Consistent with these findings, we also found that after providers began  to self-refer IMRT services they substantially increased the percentage of  their prostate cancer patients they referred for IMRT, while providers that  did not begin to self-refer experienced much smaller changes over the  same period. Taken together, our findings suggest that financial  incentives were likely a major factor driving the increase of IMRT referrals  among self-referring providers in limited-specialty groups.
The greater use of IMRT by self-referring Medicare providers to treat  prostate cancer raises two potential concerns. First, because physician  recommendations play a large role in influencing a patient’s treatment  decision, a financial interest in one treatment option may diminish the role  that other criteria—such as life expectancy, overall health, patient  preferences, and clinical characteristics of the prostate cancer—play in  the decision-making process. Despite the fact that several treatment  options are often considered equally appropriate, the higher use of IMRT  among providers who self-refer seems problematic because prostate  cancer treatments differ in terms of their risks and side effects, such as  the likelihood of developing sexual, urinary, or bowel-related side effects.  To the extent that providers’ financial interests are shaping treatment  decisions, some patients may end up on a treatment course that does not  best meet their individual needs. Second, because IMRT costs more than  most other treatments, the higher use of IMRT by self-referring providers  results in higher costs for Medicare and beneficiaries. To the extent that  treatment decisions are driven by providers’ financial interest and not by  patient preference, these increased costs are difficult to justify.
Given self-referral’s potential effect on both the Medicare program and  beneficiaries, it is imperative that CMS improve its ability to identify and  monitor the effects of such services. CMS is not currently well-positioned  to address self-referring providers’ financial incentive to refer their  prostate cancer patients for IMRT, as CMS currently does not have a  method for easily identifying such services. Without a way to identify self- referred services, such as a self-referral flag on Medicare Part B claims,  CMS does not have the ongoing ability to monitor self-referral and its  effects on beneficiary treatment selection and costs to both Medicare and  beneficiaries.
In addition, Medicare providers who self-refer IMRT services are  generally not required to disclose their financial interest in IMRT. Thus,  beneficiaries may not be aware that their provider has an incentive to  recommend IMRT over alternative treatments which may be equally  effective, have different risks and side effects, and are less expensive for  Medicare and beneficiaries. Beneficiaries need to select among different  prostate cancer treatment options, and beneficiary knowledge of a  referring provider’s financial interest in IMRT may be an important  consideration in making these selections. Currently, the Department of  Health and Human Services (HHS), the agency that administers CMS,  lacks the authority to establish a disclosure protocol for providers who  self-refer IMRT services.
section_title: Matter for Congressional Consideration
paragraphs: To increase beneficiaries’ awareness of providers’ financial interest in a  particular treatment, Congress should consider directing the Secretary of  Health and Human Services to require providers who self-refer IMRT  services to disclose to their patients that they have a financial interest in  the service.
section_title: Recommendation for Executive Action
paragraphs: We recommend that the Administrator of CMS insert a self-referral flag on  its Medicare Part B claims form, require providers to indicate whether the  IMRT service for which a provider bills Medicare is self-referred, and  monitor the effects that self-referral has on costs and beneficiary  treatment selection.
section_title: Agency and Third- Party Comments and Our Evaluation
paragraphs: We provided a draft of this report to HHS for comment. HHS provided  written comments, which are reprinted in appendix VI. We also obtained  oral comments from representatives of three professional associations  selected because they represent stakeholders with specific involvement  in prostate cancer–related IMRT services.
The three associations were the American Society for Radiation Oncology  (ASTRO), which represents radiation oncologists; the American  Urological Association (AUA), which represents urologists; and the Large  Urology Group Practice Association (LUGPA), which represents large  urology group practices. We summarize and respond to comments from  HHS and representatives from the three professional associations in the  following sections.
subsections: section_title: HHS Comments
paragraphs: In its comments, which are reprinted in appendix VI, HHS stated that it did  not concur with our recommendation. HHS did not comment on the matter  for congressional consideration or the main finding of the report—that  self-referring providers, particularly those belonging to limited-specialty  groups, referred a substantially higher percentage of their prostate cancer  patients for IMRT.
HHS did not concur with our recommendation that CMS insert a self- referral flag on its Medicare Part B claims form, require providers to  indicate whether the IMRT service for which a provider bills Medicare is  self-referred, and monitor the effects that self-referral has on costs and  beneficiary treatment selection. HHS stated that flagging self-referred  services and tracking their effects would not address overutilization that  occurs as a result of self-referral, would be complex to administer, and  may have unintended consequences, which HHS did not delineate. In  addition, HHS stated that the President’s fiscal year 2014 budget  proposal includes a provision to exclude certain services from the in-office  ancillary services (IOAS) exception. To the extent that self-referral for  IMRT services continues to be permitted, we believe that including an  indicator or flag on the claims would be an effective way to identify and  track self-referral and would give CMS the ability to analyze the effects of  self-referral on utilization patterns. Furthermore, we do not believe an  indicator or flag on the claims would be complex to administer, as CMS  requires providers to use similar indicators to provide additional  information about certain other services.
On the basis of HHS’s written response to our report, we are concerned  that HHS does not appear to recognize the effects IMRT self-referral can  have on beneficiaries and the Medicare program. HHS did not comment  on our matter for congressional consideration or our key finding that self- referring providers, particularly those belonging to limited specialty  groups, referred a substantially higher percentage of their prostate cancer  patients for IMRT. Given the magnitude of these findings, we continue to  believe that CMS should take steps to monitor the impact that IMRT self- referral has on costs and treatment selection.
HHS also provided technical comments that we incorporated as  appropriate.
section_title: Professional Association Comments
subsections: section_title: American Society for Radiation Oncology
paragraphs: ASTRO representatives generally agreed with our findings but thought  our recommendation and matter for congressional consideration should  be stronger. They said we should recommend that Congress close the  IOAS exception because the findings from the report, in combination with  previous self-referral research we and others have published, indicate the  necessity for such an action. An examination of the IOAS was beyond the  scope of our work. To the extent that IMRT self-referral is still permissible,  ASTRO representatives also said that inserting a self-referral flag would  not be an effective way to identify self-referral. Instead, they suggested  implementing reporting requirements similar to the financial transparency  requirements for physician-owned specialty hospitals under PPACA and  requiring self-referring providers to indicate on their Medicare provider  enrollment forms their financial interest in referrals. Further, ASTRO  representatives said that self-referring providers should be required to  notify patients that they may receive IMRT at alternative locations and  that other treatment options are available. We continue to believe that  inserting a self-referral flag on Medicare Part B claims would be an  effective way to track and monitor self-referral and that beneficiary  awareness of their providers’ financial interests is important. However, to  the extent that other strategies exist that would allow CMS to increase  beneficiary awareness and monitor self-referral, such efforts would be  consistent with the intent of our recommendation and matter for  congressional consideration.
AUA representatives said we did not have sufficient evidence to link  financial incentives to the increase in IMRT use among self-referring  providers and disagreed with our conclusion that financial incentives for  self-referring providers belonging to limited specialty groups were likely a  major factor driving the increase in the percentage of prostate cancer  patients referred for IMRT. Specifically, AUA representatives said the flat  trend in the utilization of prostate cancer-related IMRT services from 2007  through 2010 indicates utilization has simply shifted from hospital  outpatient departments to physician offices and that this trend  undermines our conclusion that financial incentives increase IMRT use.  As explained in our report, the trend in the percentage of patients newly  diagnosed with prostate cancer referred for IMRT was not flat; instead, it  increased over the study period. This increase occurred while the  utilization of IMRT services remained about the same in part because the  annual number of Medicare FFS beneficiaries who were diagnosed with  prostate cancer declined by about 20 percent over our study period. In  addition, we found that self-referring providers, which were predominantly  from limited-specialty groups, referred a higher percentage of their  Medicare FFS patients for IMRT than did other providers and that their  higher IMRT referral rate could not be explained by differences in age,  geographic location, or beneficiary health. As a result, we continue to  believe that financial incentives were likely a major factor driving the  higher IMRT referral rate of self-referring providers from limited-specialty  groups.
AUA representatives had several other critiques of our report.  Specifically, they indicated that we did not put enough emphasis on the  patient’s role in choosing a treatment and expressed concern that we did  not include more clinical information on patients’ prostate cancer, such as  information on cancer stage and grade, or include Medicare Advantage  beneficiaries in our study population. We address two of these critiques in  the report. Specifically, we note that patient preference is one of many  factors that affect a beneficiary’s treatment decision, and we include  clinical information on patients’ prostate cancer for a subset of  beneficiaries from New York. However, we did not include Medicare  Advantage beneficiaries in our study population because Medicare  Advantage plans are not required to submit claims to CMS, and, thus, we  do not have detailed information on the services Medicare Advantage  beneficiaries receive or the providers who refer and perform those  services.
Finally, AUA representatives stated that the declining percentage of self- referring providers’ patients referred for brachytherapy from 2007 to 2009  could reflect a change in practice standards, as they said brachytherapy  is no longer recommended as a sole treatment for intermediate- and high- risk prostate cancer. While we note that brachytherapy use has declined  even among providers who do not self-refer, we do not believe that  changing guidelines or the possibility of differences in guideline  adherence between non-self-referring and self-referring providers could  explain in totality why self-referring providers refer a smaller percentage  of their patients for brachytherapy. First, self-referring providers referred a  substantially lower percentage of their patients for brachytherapy, even  after accounting for the decline in brachytherapy use for both non-self- referring and self-referring providers from 2007 to 2009. Second, among  those patients for whom we had clinical data, the biggest differences in  IMRT and brachytherapy use between self-referring and non-self-referring  providers were for patients with low-risk cancer, which would not be  affected by the change in practice guidelines for intermediate- and high- risk prostate cancer the AUA representatives referenced.
LUGPA representatives disagreed with our conclusion that financial  incentives for self-referring providers—specifically those in limited- specialty groups—were likely a major factor driving the increase in the  percentage of prostate cancer patients referred for IMRT. Instead, they  said patient preference and an increase in the number of self-referring  providers explain the increase in IMRT utilization by self-referring  providers. While we did not perform our trend analysis at the provider  level, we do note in the report that the number of self-referring groups  increased substantially over our study period. This corresponds with a  shift in the location where patients received IMRT, from hospital  outpatient departments to physician offices. However, these trends that  we note do not negate our analysis of the referral patterns of self-referring  providers. Specifically, self-referring providers who belonged to a limited- specialty group referred a higher percentage of their newly diagnosed  prostate cancer patients for IMRT, and, thus, the increased number of   self-referring providers has also resulted in a higher percentage of  patients receiving IMRT. Also, LUPGA representatives said the increase  in the percentage of self-referring providers’ patients referred for IMRT  could be due to such patients more frequently consulting with radiation  oncologists before initiating treatment, which one study indicated leads to  higher utilization of radiation therapy, defined as EBRT or  brachytherapy. We believe it is unlikely that access to a radiation  oncologist drove the differences in IMRT referrals between self-referring  and non-self-referring providers because self-referring providers who  belonged to a multispecialty group referred a substantially lower  percentage of their patients for IMRT compared to self-referring providers  who belonged to a limited-specialty group, despite the likelihood that  patients in both instances had access to a radiation oncologist within the  group practice.
LUGPA raised several other points of concern about our review. First,  LUGPA representatives said our assertion that IMRT, brachytherapy, and  a prostatectomy are clinically equivalent treatments is inappropriate. We  disagree with LUGPA’s characterization of our discussion of IMRT,  brachytherapy, and a prostatectomy as treatment options. We recognize  that these treatments are not equally appropriate for all men diagnosed  with prostate cancer and do not assert that in our report. Rather, we say  that these treatments are often—not always—considered equally  appropriate and give an example of when they are considered equally  appropriate—men with low-risk prostate cancer. We also recognize that,  for any particular patient, a given treatment might not be appropriate due  to considerations such as age and comorbidities. Second, LUGPA  representatives said that we did not acknowledge that all sites of services  have essentially identical financial incentives to perform services for  which they receive compensation. They said our work showed the  percentage of newly diagnosed prostate cancer patients referred for  active surveillance was nearly equal between self-referring and non-self- referring providers and that this was evidence that self-referring providers  treat patients based on patient choice and sound clinical decision making.  We disagree with LUGPA's assertion that the percentage of newly   diagnosed prostate cancer patients referred for active surveillance was  nearly equal between self-referring and non-self-referring providers, as  self-referring providers were approximately 8 percent less likely to refer  their patients for active surveillance than were non-self-referring  providers. As we note in the report, IMRT is more costly than other  treatments for prostate cancer, resulting in a financial incentive for self- referring providers to refer their patients for IMRT over other treatments.  We found that self-referring providers referred a higher percentage of  their patients for IMRT than did non-self-referring providers and that the  difference in IMRT referral rates could not be explained by variations in  patient age, geographic location, or patient health status. As a result, we  continue to believe that self-referring providers’ higher IMRT referral rates  are driven by a financial incentive for these providers to refer newly  diagnosed prostate cancer patients for IMRT. Third, LUGPA  representatives said we should have studied the use of IMRT for  conditions other than prostate cancer. The use of IMRT to treat other  conditions was outside the scope of our work. Finally, LUGPA  representatives indicated that our estimates of 3D-CRT utilization for  newly diagnosed prostate cancer patients are too low. We believe our  calculation of the percentage of patients who were newly diagnosed with  prostate cancer in 2009 and referred for 3D-CRT is accurate. We solicited  input from multiple physician associations, including members of LUGPA,  regarding the appropriate HCPCS codes to use to track 3D-CRT and  examined 100 percent of claims from the Medicare Carrier and hospital  outpatient department files to identify all 3D-CRT services received by  newly diagnosed prostate cancer patients.
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section_title: Appendix I: Scope and Methods
paragraphs: This section describes the scope and methodology used to analyze our  two objectives: (1) comparing trends in the number of and expenditures  for Medicare prostate cancer–related intensity-modulated radiation  therapy (IMRT) services provided by self-referring and non-self-referring  groups from 2006 through 2010 and (2) examining how the percentage of  Medicare prostate cancer patients referred for IMRT may differ on the  basis of whether providers self-refer.
To compare trends in the number of and expenditures for prostate  cancer–related IMRT services provided in physician offices or hospital  outpatient departments from 2006 through 2010, we analyzed IMRT  claims from the Medicare Part B Carrier and hospital outpatient files. We  identified IMRT services on the basis of Healthcare Common Procedure  Coding System (HCPCS) codes associated with the delivery of IMRT— 77418 and 0073T. We classified IMRT services as related to prostate  cancer if the principal diagnosis code was 185 or 233.4—malignant  neoplasm of the prostate or carcinoma in situ of prostate, respectively—or  if one of these codes was billed on an IMRT claim and no other diagnosis  code related to another cancer was billed on the same claim.
To determine whether prostate cancer–related IMRT services from 2006  through 2010 were performed by self-referring or non-self-referring  provider groups, we first limited our analysis to only those IMRT services  in the Medicare Part B Carrier file. Because there is no indicator or “flag” on the claim that identifies whether services are self-referred or non-self- referred and the Centers for Medicare & Medicaid Services (CMS), the  agency that administers Medicare, has no other method for identifying  whether a service was self-referred, we developed a claims-based  methodology for identifying provider group practices as self-referring or  non-self-referring. We classified groups, identified by taxpayer  identification numbers (TIN)—an identification number used by the  Internal Revenue Service—as self-referring in a given year if: (1) we  could identify a prostate biopsy for at least 50 percent of the prostate  cancer–related IMRT episodes provided by groups, (2) at least   50 percent of these episodes were self-referred, and (3) a group had a  minimum number of 10 self-referred IMRT episodes. The remaining  groups were considered non-self-referring. To ensure that how we  defined our criteria were reliable, we tested alternative thresholds for  defining self-referring groups and found that, regardless of specification,  the rapid growth of services performed by self-referring groups persisted  and that the growth was due to limited-specialty groups. A patient’s  episode of prostate cancer–related IMRT was considered self-referred if  the provider who performed his prostate biopsy and the performing  provider(s) on the IMRT claim(s) billed to the same TIN in the year(s) the  IMRT services were performed, the year the biopsy was performed, or the   To find prostate biopsies for beneficiaries,  year between, if applicable.we searched through 2 years of their claims history to find the prostate  biopsy nearest to, but not after, the date of their first IMRT service. If a  beneficiary received multiple episodes of IMRT from 2006 through 2010,  we searched back 2 years from the date of the first IMRT service for each  episode. We further defined self-referring provider groups as either  limited-specialty or multispecialty groups. We defined groups as limited  specialty if more than 75 percent of its office visits in a given year were  performed by urologists, nonphysician practitioners, or physicians whose  specialty was related to the diagnosis or treatment of cancer, such as  radiation oncologists. The remaining self-referring groups were comprised  of providers from a large number of different specialties and were  considered multispecialty groups.
To examine how the percentage of prostate cancer patients referred for  IMRT may differ on the basis of whether providers self-refer, we first  identified a list of Medicare beneficiaries who were newly diagnosed with  prostate cancer in 2007 or 2009. We used a Medicare claims-derived  date from the Chronic Condition Data Warehouse (CCDW), a CMS  database, that indicates the first occurrence of prostate cancer as a proxy  for the date on which a beneficiary was diagnosed with prostate cancer.  We further narrowed the list of prostate cancer patients we studied to  those who (1) were at least 66 years of age on their date of diagnosis,   (2) were continuously enrolled in Medicare Parts A and B in the year of,  before, and after they were diagnosed, and (3) received a prostate  biopsy on the same day as or within 1 year prior to their diagnosis. We  then analyzed prostate cancer–related claims from the Medicare Part B  Carrier and hospital outpatient files to determine what types of treatments  these beneficiaries received from their diagnosis date through 1 year after  that date. We used the provider who performed a beneficiary’s prostate  biopsy that was nearest to his date of diagnosis as a proxy for the  provider who referred the beneficiary for treatment. We classified referring  providers as self-referring if they were the performing provider on a claim  that was paid to a self-referring provider group in the year of, before, or  after a beneficiary’s prostate cancer diagnosis. All other providers were  considered non-self-referring. Similarly, we classified providers as  belonging to a limited-specialty group if they were the performing provider  on a claim that was paid to a limited-specialty provider group in the year  of, before, or after a beneficiary’s prostate cancer diagnosis. If a provider  did not belong to a limited-specialty group, we considered the provider to  belong to a multispecialty group.
To assess the possibility that beneficiary characteristics affected the  types of treatments for which self-referring and non-self-referring  providers referred their prostate cancer patients, we examined  beneficiaries’ (1) age at the time they were diagnosed with prostate  cancer, (2) geographic location (i.e., urban or rural), and (3) health,  including clinical characteristics of prostate cancers for a subset of  beneficiaries who lived in New York. We determined a beneficiary’s age  at diagnosis using a beneficiary’s date of birth and the date on which he  was diagnosed with prostate cancer. We defined urban settings as  metropolitan statistical areas, a geographic entity defined by the Office of  Management and Budget as a core urban area of 50,000 or more  population. We used rural-urban commuting area codes—a Census tract– based classification scheme that utilizes the standard Bureau of Census  Urbanized Area and Urban Cluster definitions in combination with work- commuting information to characterize all of the nation’s Census tracts  regarding their rural and urban status—to identify beneficiaries as living in  metropolitan statistical areas. We considered all other settings to be  rural. We used CMS’s risk score file to identify average risk score, which  serves as a proxy for beneficiary health status. For a subset of  beneficiaries who lived in New York, we obtained clinical information on  the beneficiaries’ prostate cancer—including information used to  determine whether the localized cancer was low, intermediate, or high  risk—from the New York State Cancer Registry.prostate cancer was low, intermediate, or high risk, we used a  beneficiary’s Gleason score, prostate-specific antigen (PSA), and tumor   To establish whether a  stage from the New York State Cancer Registry.York analysis are not generalizable to the entire Medicare population.
The results of the New  We also determined whether the percentage of a provider’s prostate  cancer patients referred for IMRT changed after providers began to self- refer. Specifically, we identified a group of providers, which we called  “switchers,” that did not self-refer in 2006 or 2007 but began to self-refer  in either 2008 or 2009. We then calculated the change in the percentage  of switchers’ patients referred for IMRT and other treatments among  those diagnosed with prostate cancer in 2007 and 2009. We then  compared the change among switchers to the change experienced by  providers that did not change whether or not they self-referred IMRT  services from 2007 to 2009. Specifically, we compared the change in the  percentage of switchers’ prostate cancer patients they referred for IMRT  to the percentage of patients referred for IMRT by (1) self-referring  providers—providers that self-referred in 2007, 2008, and 2009 and either  self-referred or did not bill Medicare in 2006 and 2010 and (2) non-self- referring providers—providers that did not self-refer in 2007, 2008, and  2009 and either did not self-refer or did not bill Medicare in 2006 and  2010.
We took several steps to ensure that the data used to produce this report  were sufficiently reliable. Specifically, we assessed the reliability of the  CMS data we used by interviewing officials responsible for overseeing  these data sources, including CMS and Medicare contractor officials. We  also reviewed relevant documentation and examined the data for obvious  errors, such as missing values and values outside of expected ranges.  We determined that the data were sufficiently reliable for the purposes of  our study.
We conducted this performance audit from May 2010 through July 2013  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Change in Prostate Cancer– Related IMRT Services and Expenditures by Setting
paragraphs: Medicare prostate cancer–related intensity-modulated radiation therapy  (IMRT) utilization varied substantially between settings (see fig. 4). From  2006 through 2010, utilization grew at an annual rate of 10 percent in  physician offices, whereas there was almost no growth in the hospital  outpatient department. Moreover, while the utilization of prostate cancer– related IMRT services in the hospital outpatient department was nearly  the same in 2006 as it was in 2010, utilization in this setting actually  peaked in 2007 and declined thereafter.
Total prostate cancer–related IMRT expenditures grew from $589 million  to $698 million over our study period, but growth rates varied by setting  (see fig. 5). In contrast to the growth in utilization, expenditures increased  faster for services performed in hospital outpatient departments than  those performed in physician offices—7 percent and 3 percent annual  growth rates, respectively. This is due to the fact that reimbursement  rates for IMRT services have been increasing for services performed in  hospital outpatient departments and declining for those performed in  physician offices.
section_title: Appendix III: Discrete Prostate Cancer Treatment Categories
paragraphs: The higher percentage of patients that self-referring Medicare providers  referred for intensity-modulated radiation therapy (IMRT) compared to  non-self-referring providers was due to self-referring providers referring  their patients for IMRT only and IMRT in conjunction with hormone  therapy more often (see table 4). Including all combinations, self-referring  and non-self-referring providers referred nearly equal percentages of their  patients for a combination of treatments—27 percent and 26 percent,  respectively.
section_title: Appendix IV: Distribution of Prostate Cancer Treatments by Age
paragraphs: While self-referring Medicare providers were more likely to refer their  prostate cancer patients for intensity-modulated radiation therapy (IMRT)  regardless of age, the type of treatment they were less likely to refer their  patients for varied based on the age of the beneficiary (see table 5). For  instance, among beneficiaries 80 years of age or older at the time they  were diagnosed with prostate cancer, self-referring providers were less  likely to refer their prostate cancer patients for hormone therapy only,  active surveillance, and brachytherapy compared to non-self-referring  providers. In contrast, among beneficiaries 66 to 69 years old, nearly the  entire difference between self-referring and non-self-referring providers  was due to self-referring providers referring a smaller percentage of their  prostate cancer patients for a radical prostatectomy or brachytherapy.
section_title: Appendix V: Change in Prostate Cancer Treatment Patterns over Time for Different Types of Providers
paragraphs: The increased percentage of Medicare patients referred by switchers for  intensity-modulated radiation therapy (IMRT) was accompanied by a  decrease in the percentage of patients referred for several other  treatments, especially brachytherapy (see table 6). Some of the changes  in the percentage of patients referred by switchers for a given treatment  were consistent with the patterns for other types of providers—such as in  the case of three-dimensional conformal radiation therapy (3D-CRT) /  other external beam radiation therapy (EBRT)—while some of the other  changes were not.
section_title: Appendix VI: Comments from the Department of Health and Human Services
section_title: Appendix VII: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Thomas Walke, Assistant  Director; Manuel Buentello; Krister Friday; Gregory Giusto;   Brian O’Donnell; Daniel Ries; and Jennifer Whitworth made key  contributions to this report.