Loopholes in federal and state laws that curb physician referral to diagnostic imaging providers in which they have a financial stake (self-referral) are allowing physicians to stretch how they are paid and for what. Jean M. Mitchell, PhD, a professor of public policy at Georgetown University, gathered information on all providers (physicians, hospitals, independent diagnostic testing facilities) that billed a large private insurer in California in 2004 for magnetic resonance imaging (MRI) scans, computed tomography (CT) scans, and positron-emission tomography (PET) scans.

She found that providers had submitted two types of claims to the insurer: a claim for performing and interpreting the scan (global claim) and a claim for technical components of the scan (preparing the patient before the scan).

"The self-referral arrangements that exist today are very different from those in the early '90s," says Mitchell. "Physicians don't have ownership relationships with these facilities."

"These relationships work like this: I'm an orthopedic surgeon and I am part of a group. I approach a hospital, a radiology group, or an independent diagnostic facility and tell you that our orthopedic group will refer our patients to you for MRIs. You need to let us use your machine for a whole day, with your employees and everything, and we'll pay you $5,000 for the day. That machine is booked from 7 a.m. until 10 p.m. You just lease us the machine for the day."

She continues: "Another approach is that sometimes these diagnostic testing facilities approach the physician groups and say 'You refer your patients to us, you pay us $400 per scan, and then you bill the insurance company. Insurers pay you and you pocket the difference. That's called a sham lease arrangement," says Mitchell.

"I suspect at least 55 percent of the MRI providers who bill are self-referrals."

She found that 33 percent of doctors who submitted either global or technical bills for MRI scans were not radiologists. These physicians were practicing in small and medium-size groups (fewer than 100 physicians) and engaged in self-referral. In 2004, they accounted for 11.5 percent of total MRI volume paid by the insurer.

For CT scans, self-referral physicians made up 22 percent of the providers who submitted global or technical bills. Less than 7 percent of these scans were paid by the insurer. Self-referral physicians accounted for 17 percent of the providers who submitted global or technical bills to the insurer for PET scans, but the insurer paid for more than 25 percent of those bills.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.