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USE OF IMAGING SERVICES: PROVIDING APPROPRIATE CARE FOR MEDICARE BENEFICIARIES HEARING BEFORETHE SUBCOMMITTEE ON HEALTH OF THE COMMITTEE ON ENERGY AND COMMERCE HOUSE OF REPRESENTATIVES ONE HUNDREDNINTH CONGRESS SECOND SESSION JULY 18,2006 Serial No. 109-132 Printedfortheuse ofthe Committee onEnergyandCommerce AvailableviatheWorldWideWeb: http://www.access.gpo.gov/congress/house U.S.GOVERNMENTPRINTINGOFFICE 31-334PDF WASHINGTON 2006 : ForsalebytheSuperintendentofDocuments,U.S.GovernmentPrintingOffice Internet:bookstore.gpo.gov Phone:tollfree(866)512-1800;DCarea(202)512-1800 Fax:(202)512-2250 Mail:Stop SSOP,Washington,DC20402-0001 COMMITTEEONENERGYANDCOMMERCE JOEBARTON,Texas,Chairman RalphM.Hall,Texas JOHND.DlNGELL,Michigan MichaelBilirakis,Florida RankingMember ViceChairman HenryA.Waxman,California FredUpton,Michigan EdwardJ.Markey,Massachusetts CliffStearns,Florida RickBoucher,Virginia PaulE.Gillmor,Ohio EDOLPHUSTOWNS,NewYork NathanDeal,Georgia FRANKPALLONE,Jr.,NewJersey EdWhitfield,Kentucky SherrodBrown,Ohio CharlieNorwood,Georgia BartGordon,Tennessee BarbaraCubin,Wyoming BobbyL.Rush,Illinois JohnShimkus,Illinois AnnaG.Eshoo,California HeatherWilson,NewMexico BARTStupak,Michigan JOHNB.SHADEGG,Arizona EliotL.Engel,NewYork CharlesW."Chip"Pickering, Mississippi AlbertR.Wynn,Maryland ViceChairman GeneGreen,Texas VlTOFOSSELLA,NewYork TedStrickland,Ohio RoyBlunt,Missouri DIANADeGette,Colorado SteveBuyer,Indiana LOISCAPPS,California GeorgeRadanovich,California MikeDoyle,Pennsylvania CharlesF.Bass,NewHampshire TomAllen,Maine JosephR.Pitts,Pennsylvania JimDavis,Florida MaryBono,California JanSchakowsky,Illinois GregWalden,Oregon HildaL.Solis,California LEETERRY,Nebraska CharlesA.Gonzalez,Texas MikeFerguson,NewJersey JayInslee,Washington MikeRogers,Michigan TammyBaldwin,Wisconsin C.L."Butch"Otter,Idaho MikeRoss,Arkansas SueMyrick,NorthCarolina JohnSullivan,Oklahoma TimMurphy,Pennsylvania MichaelC.Burgess,Texas MarshaBlackburn,Tennessee BudAlbright,StaffDirector DAVIDCAVICKE,GeneralCounsel REIDP.F.STUNTZ,MinorityStaffDirectorandChiefCounsel SUBCOMMITTEEONHEALTH NATHANDEAL,Georgia,Chairman RalphM.Hall,Texas SherrodBrown,Ohio MichaelBilirakis,Florida RankingMember FredUpton,Michigan HenryA.Waxman,California PaulE.Gillmor,Ohio EDOLPHUSTOWNS,NewYork CharlieNorwood,Georgia FrankPallone,Jr.,NewJersey BarbaraCubin,Wyoming BartGordon,Tennessee JohnShtmkus,Illinois BobbyL.Rush,Illinois JohnB.Shadegg,Arizona AnnaG.Eshoo,California CharlesW."Chip"Pickering Mississippi GeneGreen,Texas , SteveBuyer,Indiana TedStrickland,Ohio JOSEPHR.PITTS,Pennsylvania DianaDeGette,Colorado MaryBono,California LOISCAPPS,California MikeFerguson,NewJersey TomAllen,Maine MikeRogers,Michigan JimDavis,Florida SueMyrick,NorthCarolina TammyBaldwin,Wisconsin MichaelC.Burgess,Texas JOHND.DlNGELL,Michigan JoeBarton,Texas (ExOfficio) (ExOfficio) (ID CONTENTS Page Testimonyof: Kuhn, Herb, Director, Center for Medicare Management, Centers for Medicare & MedicaidServices,U.S.DepartmentofHealthandHumanServices 20 Hackbarth,GlennM.,Chairman,MedicarePaymentAdvisoryCommission 27 Douglas,Dr.PamelaS.,Chief,DivisionofCardiovascularMedicine,DukeUniversity MedicalCenter 72 VanMoore,Dr.Arl,Chair,BoardofChancellors,AmericanCollegeofRadiology 82 Donahue, John J., President and Chief Executive Officer, National Imaging Associates,Inc 92 Laube,Dr.Doug,President,AmericanCollegeofObstetriciansandGynecologists 100 Griffeth,Dr.Landis,Director,NuclearMedicine,BaylorUniversityMedicalCenter 112 May, F. Lynn, Chief Executive Officer, American Society of Radiological Technologists 119 Baumgartner,Robert.ChiefExecutiveOfficer,CentersforDiagnosticImaging 123 Rucker, Dr. DonaldW., Vice President and ChiefMedical Officer, Siemens Medical SolutionsUSA,Inc 137 Additionalmaterialsubmittedfortherecord: Kuhn,Herb, Director, CenterforMedicare &Medicaid Services,U.S. Departmentof HealthandHumanServices,responsefortherecord 165 Hackbarth, GlennM., Chairman, MedicarePaymentAdvisoryCommission, response fortherecord 167 CMS Library C2-07-13 7500 Security Blvd. Baltimore, Maryland 21244 (III) USE OF IMAGING SERVICES: PROVIDING APPROPRIATE CARE FOR MEDICARE BENEFICIARIES TUESDAY,JULY 18, 2006 HouseofRepresentatives, CommitteeonEnergyand Commerce, Subcommittee onHealth, Washington, DC. The subcommittee met, pursuant to notice, at 10:13 a.m., in Room 2123 of the Rayburn House Office Building, Hon. Nathan Deal (Chairman) presiding. Members present: Representatives Upton, Gillmor, Norwood, Cubin, Shimkus, Pickering, Pitts, Ferguson, Rogers, Myrick, Burgess, Towns, Pallone, Eshoo, Green, Capps, Dingell (ex officio), and Deal. Staff present: Melissa Bartlett, Counsel; Ryan Long, Counsel; Brandon Clark, Policy Coordinator; Chad Grant, Legislative Clerk; Bridgett Taylor, Minority Professional Staff Member; Amy Hall, Minority Professional Staff Member; and Jessica McNiece, Minority ResearchAssistant. Mr. Deal. We will call the meeting to order and I will recognize myselffor an opening statement forthis hearing. First of all, I am proud to say that we have two very good expert panels ofwitnesses again today. They are going to help us examine the concerns that have been raised by MedPAC, CMS, and others regarding the rapid growth of the use of imaging services in Medicare. Today's hearing will also provide a forum for witnesses to provide suggestions for how to determine what is proper versus improper growth ofservices andhow to best control over-utilization ormisuse ofservices. Over the past few years, there has been rapid growth in the volume of imaging services paid under Medicare fee-for-service. MedPAC has found that Medicare spending for imaging services paid under the physician fee schedule nearly doubled between 1999 and 2004, from $5.4 billion peryear to $10.9 billion peryear. In addition, the volume of imaging services has grown at almost twice the rate of other physician services. Clearly, this level ofgrowth is unsustainable. Some growth in use of imaging services is argued to be attributable to technological innovations that allow physicians to better diagnose disease. However, many observers argue that such growth may reflect overuse or misuse of (1) 2 imaging services. MedPAC has determined that spending for MRI, CT, and nuclear medicine has grown faster than other imaging services. Accordingly, MedPAC has identified some factors that may contribute to the rapid growth in volume and intensity in imaging services, including one, the possible misalignment offee schedule payment rates and costs, two, physician's interest in supplementing their professional fees with revenues from ancillary services, and three, patients' desire to receive diagnostic tests inmore convenient settings. In its March 2005 report to Congress, MedPAC recommended that Congress direct the Secretary to set standards for physicians interpreting or performing diagnostic imaging services. This is a recommendation I hope my colleagues on this subcommittee will carefully consider as we startto look atpossible solutions to this problem. As my colleagues are no doubt aware, the Deficit Reduction Act of 2005 included a provision that caps reimbursement for the technical component of imaging services performed in a physician's office at the hospital outpatient payment rate. Imaging services paid under the physician fee schedule involve two parts, a technical component and a professional component. The technical component of the payment covers the cost ofthe equipment, supplies, and non-physician staff. The DRA provision capping the technical component of physician payment for imaging services was intended to move toward payment neutrality across sites of service delivery. This provision takes effect January the 1st of2007 and will save the Medicare program almost $3 billion over 5 years. Of course, many physician groups and industry stakeholders are pushing for a delay in the effective date ofthis provision. However, it is important to remember that these savings were a major financial component in preventing physicians from taking the 4.4 percent reduction in fee schedule payments that was scheduled to be implementedunderthe SGR formula for 2006. Unfortunately, few groups are offering legitimate offsets in order to pay for this requested delay in implementation. It reminds me of the lyrics I believe from an old Bobby Gentry song that says "Everybody wants to go to heaven, butnobody wants to die." I am looking forward to having a cooperative and productive conversation on this topic today and to working with my colleagues on both sides of the aisle to come up with effective solutions to the problems addressed at today's hearing. Again, I would like to thank our witnesses forparticipating, and we look forward to yourtestimony. At this time, I would ask unanimous consent that all members be allowed to submit statements and questions for the record. Without objection. [The prepared statement ofHon. Nathan Deal follows:] 3 PreparedStatementoftheHon.NathanDeal,Chairman,Subcommitteeon Health > The Committeewillcometoorder, andthe Chairrecognizeshimselfforanopening statement. > I amproudto say thatwe have two expertpanels ofwitnesses appearing beforeus this morning thatwill help us examine the concerns raisedby MedPAC, CMS, and othersregardingtherapidgrowthoftheuseofimagingservicesinMedicare. > Today's hearingwill also provide a forum forwitnesses to provide suggestions for how to determine what is proper versus improper growth ofservices, and how to bestcontrolforoverutilizationormisuseofservices. > Over the past few years, there has been rapid growth in the volume of imaging servicespaidunderMedicare fee-for-service. > Inaddition,thevolumeofimagingserviceshasgrownatalmosttwicetherate ofall otherphysicianservices. > Clearly,thislevelofgrowthisunsustainable. > Somegrowthinuseofimagingservicesisarguedtobeattributabletotechnological innovations that allow physicians to better diagnose disease. However, many observers argue that such growth may reflect overuse or misuse of imaging services. > MedPAC has determined that spending for MRI, CT, and nuclear medicine has grownfasterthanforotherimagingsendees. > Accordingly, MedPAC has identified some factors thatmay contribute to the rapid growthinvolumeandintensityofimagingservices, including: 1. Thepossiblemisalignmentoffee schedulepaymentratesandcosts 2. Physicians' interest in supplementing their professional fees with revenues fromancillaryservices 3. Patients' desiretoreceivediagnostictestsinmoreconvenientsettings. > In its March 2005 reportto Congress, MedPAC recommendedthat Congress direct the Secretary to set standards for physicians interpreting or performing diagnostic imagingservices. > Thisis arecommendationIhopemycolleagues onthis subcommitteewill carefully consideraswestarttolookatpossiblesolutionstothisproblem. > As my colleagues are no doubt aware, the Deficit Reduction Act of2005 (DRA), included a provision that caps reimbursement for the technical component for imaging services performed in a physician's office at the hospital outpatient paymentrate. > Imaging services paid under the physician fee schedule involve two parts, a technical component and a professional component. The technical component of thepaymentcoversthecostoftheequipment, supplies, andnon-physicianstaff. > The DRA provision capping the technical component of physician payment for imaging services was intended to move toward payment neutrality across sites of servicedelivery. > This provision takes effect January 1, 2007, and will save the Medicare program almost$3billionover5years. > Ofcourse,manyphysiciangroupsandindustrystakeholders arepushingforadelay intheeffectivedateofthisprovision. > However, it is important to remember that these savings were a major financial componentinpreventingphysicians fromtakingthe4.4%reductioninfee schedule paymentsthatwasscheduledtobeimplementedundertheSGRformulafor2006. > Unfortunately, few groups are offering legitimate offsets in order to pay for this requesteddelayinimplementation. 4 D Itkindareminds me ofthe lyrics ofan oldBobbie Gentry song, "Everybodywants togotoHeaven. .butnobodywantstodie." . D I am looking forward to having a cooperative and productive conversation on this topictodayandtoworkingwithmycolleaguesonbothsidesoftheaisletocomeup witheffectivesolutionstotheproblemsaddressedattoday'shearing. D Again, I would like to thank all ofour witnesses for participating today, and we lookforwardtohearingyourtestimony. D At this time, I would also like to ask forUnanimous Consent that all Members be allowedtosubmitstatementsandquestionsfortherecord. D InowrecognizetheRankingMemberofthe Subcommittee, Mr. BrownfromOhio, forfiveminutesforhisopeningstatement. MR. DEAL. I now recognize Mr. Pallone, who is standing in for our Ranking Member, for 5 minutes forhis opening statement. MR. PALLONE. Thankyou, Mr. Chairman. Without a doubt, recent advancements in medical imaging, such as computerized tomography, magnetic resonance imaging, and ultrasound have greatly improved physicians' ability to diagnose and treat patients. These technologies have the potential to improve health outcomes and lower healthcare costs by minimizing the need for invasive procedures and improve patient safety. Over the past few years, however, we have seen an explosion in the use ofmedical imaging services. According to MedPAC's March 2005 report, between 1999 and 2002, the per beneficiary average annual growth rate in the use of fee scheduling imaging services was twice as high as the growth rates for all fee schedule services. Predictably, this type of growth has raised some eyebrows about the appropriate use of medical imaging technology. Healthcare experts have identified several sources that are responsible for this growth, most of which has been attributed to the increased utilization in medical imaging in physician's offices as opposed to hospital outpatient departments where radiologists traditionally provided these services. One obvious benefit brought about by this change is that patients no longer have to be shuttled from one place to another simply to have an imaging study performed. This saves the patient both time and money. On the other hand, this change has also raised concerns that doctors are inappropriately using medical imaging services, whether it is a result ofinsufficient training or simply to boost their reimbursements. As a result, some experts have argued that as more and more doctors offer these types of services, Federal standards need to be put into place to ensure physicians are appropriately ordering imaging studies andpatients have access to safe imaging services. Such proposals are not without controversy. As MedPAC noted, and I quote, "It would be a major policy change for Medicare to require that physicians meet standards to receive payment for interpreting imaging 5 services." But clearly, physician groups remain skeptical. That is why I think it is important that we are having today's hearing, so that we can flesh out some ofthese ideas. Unfortunately, Congress has already enacted significant payment reforms regarding medical imaging services without any debate. In the final hours before Congress passed the Deficit Reduction Act, a provision was slipped into the bill that would limit payment for medical imaging services provided in physician offices. Neither Congress, nor MedPAC, nor any other public forum has held a hearing or meeting on this proposal, and because there is no record, we don't know the impact this proposal will have onbeneficiaries' access to medical imaging. So Mr. Chairman, in the future, I would hope that you would call for regular order and ensure that this subcommittee and the full committee exercises their right to adequately review such policies before they go into effect. And while we are on the subject of regular order, I would like to just take a minute to highlight the fact that you still have not responded to our request, to the Democrats' request under Rule 9 under the Rules ofthe House to have another hearing held on implementation ofMedicare Part D. Mr. Chairman, it has been about 5 months since we have made this request formally, and we still haven't heard back. I think we deserve to hear from beneficiaries about their experiences with this program. For example, I am hearing more and more now about the donut hole as more and more people fall into the donut hole, you know, they contact my office and complain because they are not really aware of the impact of the donut hole. So there are problems, and some beneficiaries aren't getting the medications they need. Others aren't getting the subsidies they are entitledto, andwe shouldbe hearing fromthem. So Mr. Chairman, Ijust wanted to say in conclusion, I want to thank you again for holding today's hearing. Ensuring the appropriate use of medical imaging services is an important topic, but so is the impact of Medicare Part D and its effect onbeneficiaries. So I once again urge you to heed our requests and hold an additional hearing on that program and allow Democrats to call their own witnesses. Thankyou, Mr. Chairman. Mr. Deal. We look forward to having another hearing on Medicare Part D and hear of the huge successes that that program has been, the great contributions that it has made to healthcare in this country, and we will honorthatrequest. MR. PALLONE. Thankyou, Mr. Chairman. MR. DEAL. I recognize Dr. Norwood forhis opening statement. MR. NORWOOD. Thank you very much, Mr. Chairman. I am very happy that we are exercising ourjurisdiction over this issue. It has been 6 on the radar screen of others for some time, though they have done absolutely nothing about finding out the facts. They have just simply written some legislation. So I am delighted that our committee is beginning to look atthis. The New England Journal of Medicine recently identified medical imaging as one ofthe top 11 medical innovations ofthe past 1,000 years. Without hesitation, imaging has improved the health ofall ofourNation by enhancing preventive and diagnostic medicine. And as imaging technology has progressed, local doctors have been able to provide these services. Has there been a growth in utilization of diagnostic imaging? Well, ofcourse, yes, there has. Should this growth come as a surprise? We Itreally shouldn'tto anybody. have an aging population, spentyears encouraging preventative medicine. And like the rest of healthcare industry, innovation does not produce savings up front. But more than the quality of life issues involved, I will guarantee you that imaging saves money. That said, in fact, I am a pretty good example ofthat. That said, is there some unnecessary imaging? Well, it only makes sense that there is. There is over-utilization in lots of places, frankly. Should we be concerned about any dramatic increase in spending? Well, as protectors of the taxpayer funds, we have to pay very close attention to that, and yes, we should be concerned. However, ifwe are worried about over- utilization, how do we specifically target that without simply cost shifting? Canwe do that? I know this is a general hearing, but we need to take a step back and reevaluate the payment adjustments in the DRA. We can say we don't want Part B to pay more than a hospital for the technical component of the same service, but has anyone asked how the payment systems differ? No. Orhowbeneficiary co-pays will be affected? No. Orhow hospitals can spread costs? No. Hopefully, this committee is going to start asking those questions. Wait times in hospital outpatient departments are too long already. Ifpatients are left with fewer options, wait times are certainly going to increase dramatically. What if hospitals drop cost and drive private practices out? What will this do for competition, for patient care, especially in rural areas and for the taxpayer? Andwhat at the end ofthe day have we done to address the real issue? Well, very little, I believe. I hope this hearing will get to the heart of what we are trying to accomplish and see ifwhat Congress has done matches that goal. I thank Representative Pitts for his leadership, and agree, a moratorium on these adjustments is responsible, and until we get to a responsible policy, to do otherwise, because we haven't done our homework, is, in my mind, irresponsible.