February 4, 2015, Washington, D.C. – The Digestive Health Physicians Association® (DHPA®) strongly opposes the proposed narrowing of the In-Office Ancillary Services Exception (IOASE) to the federal Stark Law as detailed in President Obama’s 2016 budget.
Narrowing the exception to the federal Stark Law would prohibit independent physicians from delivering critical diagnostic tests and treatments, including cancer care, in the community setting, and would cut directly against the commitment to high quality and integrated health care for patients.
Moreover, the President’s budget would actually increase health care costs, rather than result in $6 billion in savings over 10 years, as the budget inaccurately claims. Prohibiting physicians from offering advanced diagnostic imaging, radiation therapy, physical therapy and anatomic pathology services in their medical offices would result in these services shifting to the more expensive hospital setting. It would also fuel further hospital acquisition of physician practices and other free standing community-based health care services.
“By proposing to narrow the IOASE, the Administration’s budget would effectively prevent patients from receiving high quality care in the most convenient and cost efficient health care setting – independent medical practices,” said Dr. Scott Ketover, DHPA’s President and Chairman of the Board. “This would harm Medicare beneficiaries’ ability to access care in the community setting and force them into hospitals where care is less convenient, far less personal and more expensive.”
The Administration’s proposal to narrow the IOASE for certain services is contradicted by recent, peer-reviewed studies that have shown that health care expenses increase when care is consolidated in the hospital setting and that identical health care services provided in independent medical practices is more cost efficient than hospital-based care. For example, a recent studypublished in the Journal of the American Medical Association found that spending per patient was 10.3 percent higher for hospital-owned practices when compared to independent, physician-owned medical groups. And a study published by the National Institute of Health Care Reform found that hospital outpatient costs for colonoscopy, common imaging and laboratory services were up to twice the price of those same services when provided by physician’s offices and ambulatory clinics.
Narrowing the IOASE in the manner proposed by the Administration has received little legislative support. In 2014, 31 physician specialty societies and the American Medical Association voiced their support for preserving the IOASE. The House of Medicine was joined last year by the Senate and House Physicians’ Caucuses opposing IOASE repeal for certain services. Moreover, neither the Government Accountability Office nor the Medicare Payment Advisory Commission recommends repealing the IOASE for advanced medical imaging, radiation therapy, physical therapy or anatomic pathology services.
“We support the President’s goal of improving high quality health care while reducing spending, but narrowing the IOASE will actually have the opposite result,” said Dr. Michael Weinstein, DHPA’s Chair of Health Policy. “Thwarting care in the independent setting – as this budget does – will have a negative effect on patient care and won’t reduce costs. Instead, the Administration should be proposing policies that promote and safeguard care furnished in the independent medical practice setting as a competitive counterbalance to care provided in hospitals.”