Medicare Rights Supports Proposal to Close Loophole in Physician Self-Referral Policies

Last week, Joe Baker, president of the Medicare Rights Center, sent a letter to the leaders of the U.S. Senate Finance Committee, Chairman Orrin Hatch and Ranking Member Ron Wyden expressing support for a proposal to close a loophole in physician self-referral policies. The Ethics in Patient Referrals Act (the Act) prohibits certain types of referrals, specifically ones where the referring doctor owns or has an interest in the provider who administers the referred service. The Act includes exceptions for certain services, including those that could be provided by a physician while the patient is present for the initial visit to aid in diagnosis and minimize delays.

Some of these services include diagnostic imaging, anatomic pathology, physical therapy and radiation therapy. Unfortunately, recent Government Accountability Office analyses demonstrate that the exception on these services is contributing to the delivery of unnecessary care, resulting in higher costs for beneficiaries and taxpayers. According to the Congressional Budget Office, narrowing the exception, effectively closing the loophole, would save the government 3.3 billion dollars over 10 years.

Mr. Baker’s letter encouraged the Senate Committee on Finance to explore legislative solutions to address overuse and potential beneficiary harms associated with this loophole. The letter also expressed support for ongoing efforts to transition the Medicare payment system from one that reimburses on the basis of volume to one that rewards quality, efficiency, and innovation.

Read Medicare Rights’ letter: