GAO: Self-referral for PT services could drive up Medicare spending

Physicians in family practice and internal medicine in urban areas were more likely to refer a Medicare patient to physical therapy (PT) if they had financial stakes in the services, a report from the Government Accountability Office found.

The GAO compared PT referrals for self-referring and non-self-referring providers after accounting for referring provider specialty, Medicare beneficiary practice size and geographic location, according to the report.

The average number of Medicare beneficiaries referred by self-referring family practice providers in urban areas was 43 to 87 percent higher than for their non-self-referring counterparts, according to the report. 

Within a year of a practice starting self-referral, PT service referrals jumped at a higher rate relative to non-self-referring providers in the same specialty, according to the GAO. Family practice providers that started self-referring in 2009 increased PT referrals 33 percent between 2008 and 2010, while non-self-referring family practice providers increased their PT service referrals 14 percent during the same time, the report found.

However, self-referring orthopedic surgeons generally referred fewer PT services than non-self-referring orthopedic surgeons. 

"It is clear based on the totality of the recent self-referral reports from the Government Accountability Office that we need to move toward a value-based healthcare system that promotes better care, not higher volume,"  House Ways and Means Committee member Rep. Sandy Levin (D-Mich.), who requested the study, told The Hill.

Levin noted three previous reports found similar ties between financial interest and rate of referral. "Viewed collectively, the four GAO reports show substantial evidence that financial incentives, not patients' needs, are driving some referral patterns."

To learn more:
- here's the report (.pdf)
- read The Hill article

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