AIM Coalition Urges Policymakers to Strengthen Medicare Self-Referral Provisions to Advance Transition to Value-Based Care

Washington, D.C. As policymakers explore solutions to further advance the transition to a value-based care delivery system, members of the Alliance for Integrity in Medicare (AIM), a broad coalition of medical specialty, laboratory, radiation oncology and medical imaging groups committed to ending the practice of inappropriate physician self-referral, issued the following statement ahead of a Ways and Means Health Subcommittee hearing on the Stark Law:

“While significant progress has been made to support the transition to coordinated care and alternative payment models, one persistent challenge that remains is the ongoing self-referral practice by providers, particularly related to advanced diagnostic imaging, anatomic pathology, physical therapy and radiation therapy, that continues to drive up exorbitant costs. Self-referral or the in-office ancillary services (IOAS) exception in its current form only bolsters the continuation of questionable utilization patterns of these services in Fee-for-Service (FFS) Medicare and conflicts with the goals of coordinated care and value-based payment models, which Medicare will not successfully transition to if overutilization continues to be incentivized in FFS.

“We believe that narrowing the IOAS exception to exclude advanced diagnostic imaging, anatomic pathology, physical therapy and radiation therapy services will improve patient care and coordination, while preserving valuable Medicare resources and the integrity of the program. The intention of the IOAS exception is to promote patient convenience by allowing physicians to self-refer for certain services furnished in their group practices. Yet, the current use of this exception goes well beyond its intended objective. Advanced diagnostic imaging, anatomic pathology, physical therapy, and radiation therapy services are rarely furnished on the same day as the initial appointment and are not services that are provided in a physician practice for patient convenience. In addition, based on numerous GAO and peer reviewed studies, abuse of the IOAS exception has led to significant overutilization of these services.”

“To further encourage the transition to value-based care, we recommend removing advanced diagnostic imaging, anatomic pathology, physical therapy, and radiation therapy services from the list of designed health services protected under the IOAS exception. Narrowing the IOAS exception will realign provider incentives to help ensure appropriate utilization. The changes we propose to the IOAS alone would save the Medicare program at least $3.3 billion over ten years, as scored by the Congressional Budget Office.”

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The Alliance for Integrity in Medicare (AIM) is a broad coalition of medical societies committed to ending the practice of inappropriate physician selfreferral and focused on improving patient care and preserving valuable Medicare resources. AIM partners include the American Clinical Laboratory Association (ACLA), the American Physical Therapy Association (APTA), the American Society for Clinical Pathology (ASCP), the American Society for Radiation Oncology (ASTRO), the Association for Quality Imaging (AQI), and the College of American Pathologists (CAP).

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