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. 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. 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. 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.) 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. 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. 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.) 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. 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. 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. 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. 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. 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. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the Secretary of Health and Human Services, interested congressional committees, and others. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff has any questions about this report, please contact me at (202) 512-7114 or cosgrovej@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix VII. 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. 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. 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. 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. 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. 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.

Summary: 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. 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. 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.