IOASE repeal efforts threaten coordinated care

May 12, 2014

Repealing the IOASE would severely curtail the health care options for hundreds of thousands of prostate cancer patients and their families who depend on access to comprehensive, integrated urologic services of the highest quality.

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Dr. Shore is medical director of Carolina Urologic Research Center, Myrtle Beach, SC.

This past March, 31 medical specialty groups, representing hundreds of thousands of physicians, went on record supporting the in-office ancillary services exception (IOASE) to the federal Stark law and requested that Congress reject the Obama administration’s proposal to restrict the IOASE for advanced imaging, radiation therapy, anatomic pathology, and physical therapy.

This overwhelming statement of support by the physician community emphasizes the critical importance of preserving patient access to coordinated care, which is safeguarded by the IOASE. Currently, and doggedly, a handful of physician specialty organizations with historical monopolies on certain health care services are trying to persuade Congress that repeal of IOASE will generate savings that would help pay for sustainable growth rate reform.

The advocates for repeal ignore the deleterious effect this would have upon access to patient care and the increased costs for the Medicare program, as many of these same advanced imaging services would be performed in the outpatient hospital setting and reimbursed at higher rates.

Over the past several years, hospitals have acquired thousands of physician practices in order to consolidate their market control in many communities. The Medicare Payment Advisory Commission notes that Medicare reimbursement to hospitals is much greater (in some cases two to three times the amount) than reimbursement to physician offices for precisely the same service. For example, Medicare pays $150 for an echocardiogram in the physician office, but $400 for the same test by the same provider in a hospital. Indeed, the Deficit Reduction Act legislatively capped reimbursement for medical imaging procedures in the physician office at the hospital outpatient department rate; thus, all advanced medical imaging procedures cost the same or less at physician offices.

Once hospitals consolidate market share, they can extend bargaining leverage into enhanced rates with private payers as well, further driving up health care costs. This trend has already been seen in markets such as the Boston metropolitan area, where health care is dominated by hospital conglomerates.

It’s disconcerting and baffling that repeal of the IOASE is even a point of legislative debate, given that both Democrats and Republicans overwhelmingly agree that coordinated health care provides superior pathways for better patient outcomes and that IOASE repeal would effectively prohibit patient access to cancer treatment services by integrated practices with multidisciplinary expertise.

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Value of coordinated care seen with PCa treatment

Nowhere is the value of coordinated care more evident than in prostate cancer treatment, where centers of excellence have brought together physicians of different specialties, working to ensure that patients have access to a variety of appropriate treatment approaches, including active surveillance, surgical extirpation, radiation therapy, cryotherapy, and clinical trials. Men and their caregivers who face the challenge of prostate cancer-the second leading cause of cancer death in men in the United States-deserve the right to access and receive integrated, multidisciplinary care at centers with specialized expertise in the disease. 

Repealing the IOASE would severely curtail the health care options for hundreds of thousands of prostate cancer patients and their families who depend on access to comprehensive, integrated urologic services of the highest quality. Unfortunately, specialty societies with historical monopolies on ancillary services-representing radiation and laboratory services providers-are pressuring Congress to repeal the IOASE. This internecine warfare of medical specialty groups oftentimes conflates real-time data and clinical guidelines with self-serving financial interest that would only restrict access to care and likely escalate costs by necessitating that patients receive care in tertiary facilities, more expensive hospital settings, or cloistered single-specialty clinics.

These opposing specialty society efforts appeared to have received encouragement this past summer when the Government Accountability Office (GAO) released a report demonstrating that the use of intensity-modulated radiation therapy (IMRT) to treat prostate cancer by independent urology group practices increased at the end of the last decade. Nevertheless, the GAO did not recommend any changes to the IOASE.

Careful analysis reveals that while the number of IMRT services performed by urology groups increased after 2007, overall use of IMRT to treat prostate cancer actually decreased over the same period. In fact, the GAO found that "[A]fter 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.”

It is clear that increased use of IMRT to treat prostate cancer by urology groups simply reflects a shift in where patients choose to access these services as well as a shift away from other, more invasive procedures used to treat prostate cancer. In keeping with all appropriate measures of ownership disclosure for all medical entities, physician, administrator, alliance, and hospital ownership of ancillary services should be forthrightly disclosed.

Moreover, expenditures for prostate cancer radiation services are declining as well-but not everywhere. After 2007, despite the migration of patients away from hospitals to physicians’ offices, prostate cancer-related IMRT costs in physicians’ offices decreased by $28 million. Simultaneously, although the number of services provided by hospitals declined substantially, hospital prostate IMRT expenditures increased by $8 million. The GAO explains this paradox by stating that, “Reimbursement rates for IMRT services have been increasing for services performed in hospital outpatient departments and declining for those performed in physician offices.” Hence, excluding the discussion of the reimbursement disparity, why would our health care system close more affordable treatment sites in favor of more expensive ones?

Shifts in health care delivery patterns are required and should be beneficial for quality of patient care with concommitant cost reductions; however, as the medical profession progressively integrates, historical monopolies with iron-fisted control over certain services will be weakened and patients will seek the highest quality, most convenient, and most cost-effective care. Special interest groups proposing legislative action to maintain their health care monopolies will not improve health care outcomes and will restrict economic efficiencies. Our focus should be on ensuring access to affordable care that also results in the greatest patient efficacy-not restricting where that care is delivered.UT

Like this article? Check out these previous blog posts from Dr. Shore:

Appropriate use criteria key to reining in health costs

Urology group practice: Keys to survival

Prostate cancer biomarkers to urologists' rescue

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