Advocacy News

June 9, 2015



Ways and Means Approves IPAB Repeal Legislation

AAOS Submits Comments on Meaningful Use and EHRs

What We’re Reading

House Committee Funds DOD Orthopaedic Research Program

How to Connect to Congress Via Social Media

You’re Invited: How to Host a Fundraiser Webinar

AMA Study on In-Office Ancillary Services

Save the Date: Sixth Annual Physician & Dentist Candidate Workshop,
July 10-11, 2015

BOS Quality and Patient Safety Action Fund

AAOS Orthopaedic PAC Online Contribution Center


AAOS Website

AAOS Calendar

House of Representatives Legislative Activities
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AMA Study on In-Office Ancillary Services

imageThe in-office ancillary services exception (IOASE) to the Stark Law is essential to efficiently diagnosing and treating musculoskeletal conditions by allowing orthopaedic surgeons to provide imaging and physical therapy (PT) services in their offices. The Government Accountability Office (GAO) has conducted several studies of the IOASE and there have been a handful of proposals to eliminate the exemption by some members of Congress as well as the Administration. As a result, the American Medical Association (AMA) contracted with Milliman Inc. to do an analysis of utilization and expenditure patterns for in-office ancillary services. The analysis, which looked at Medicare claims data from 2008-2012, covered advanced imaging, Intensity Modulated Radiation Therapy (IMRT), pathology and lab services and physical therapy. Unlike the GAO study, the Milliman study included claims from other relevant outpatient settings including hospital outpatient departments and independent labs, in addition to physician claims.

The recently-released Milliman findings provide further evidence that self-referral does not encourage inappropriate utilization or increase Medicare spending. Importantly, the study found that utilization and spending trends for these services show declining and even negative (advanced imaging) growth rates in office settings. Utilization in the office setting represents a small fraction of total utilization – specifically, the study found that “physician offices account for less than 20 percent of outpatient physical therapy and laboratory services spending and less than 30 percent of advanced imaging spending.” The study also found that the cost of care is less in the physician office.

According to the AMA, there is a real risk that policies intended to preclude or discourage physician investment in ancillary services could backfire by accelerating their movement out of physicians’ offices where Medicare and its beneficiaries often pay less than when the identical services are provided in the hospital. Further, as this study demonstrates, any attempt to restrict or repeal IOASE will not have a material impact on costs and may even increase costs as care migrates to the more expensive setting.

The AAOS commissioned a similar study of imaging self-referral in 2014, which concluded that self-referral does not lead to higher utilization of advanced imaging services. The AAOS Study of In-Office Ancillary Imaging Services surveyed 770 orthopaedic practices to compare Medicare claims data for those practices with on-site MRI and those without MRI on-site to determine if MRI utilization behavior was different between the two groups. The analysis of the Centers for Medicare & Medicaid Services (CMS) Medicare claims data and survey data found no difference between MRI utilization for practices with on-site MRI versus practices without on-site MRI machines. Read more about the AAOS study online here.

The bottom line is Congress should protect patient access to comprehensive, cost-effective treatment at health care sites of the patients’ own choosing and oppose efforts to repeal the IOASE, which would negatively impact the ability of patients to attain quality care.

The Milliman report can be found online here: [login required to download].