WSJ: More doctors are ordering in-office medical tests—and it's driving up Medicare spending

Fewer than 10 percent of physicians accounted for more than half of the spending increase

New medical devices that allow physicians to conduct more tests in-office are driving Medicare spending increases, according to a Wall Street Journal analysis of Medicare billing data.

According to the Journal, increased spending on in-office medical tests are common after new devices come to market that allow providers to perform and bill for tests they previously had to refer to other facilities.

The Journal analysis focused on services for which Medicaid paid at least $5 million in 2014. It found that four of the top 10 fastest-growing Medicare services between 2012 and 2014 involved new devices that allowed in-office medical testing for:

  • Electronic brachytherapy, which can treat certain non-melanoma skin cancers; and
  • Electroretinography, which can be used to evaluate retina function;
  • Sweat tests, used to diagnose nerve damage; and
  • Tear labs, used to determine whether individuals' eyes are too dry.

Overall, spending on those four services increased by $123.5 million from 2012 to 2014, reaching $135 million. Specifically, Medicare spending for:

  • Electronic brachytherapy, rose 1,129 percent from $7.8 million in 2012 to $95 million in 2014;
  • Electroretinography, rose 1,433 percent reaching more than $8 million in 2014;
  • Sweat tests, rose 967 percent reaching $16.7 million in 2014; and
  • Tear labs, rose 747 percent from $1.75 million in 2012 to $14.8 million in 2014.

The analysis found that fewer than 10 percent of physicians accounted for more than half of the spending increase for each of those four services.

Medicare payments for new devices could encourage use

According to the Journal, the way CMS sets payments for new devices that allow providers to conduct in-office tests could encourage them to increase the tests' use. Currently, CMS sets the payments based on how long officials assume the tests will take to perform, as well as how much they think it will cost to administer the tests.

How one hospital is sticking it to excess blood tests

Rita Redberg, a cardiologist at the University of California-San Francisco who chairs a CMS advisory committee that analyzes new technology, said, "We don't want to deny lifesaving technologies or even things that would make older people feel better," adding, "But, right now, the balance is leaning toward just paying for things."

However, CMS occasionally adjusts payment levels for using the new devices, the Journal reports.

CMS spokesperson Aaron Albright said the agency closely monitors Medicare spending on health care services so it "can correct [billing] codes that may be misvalued and identify possible improper payment without limiting patient access to important new therapies" (Weaver/Jones, Wall Street Journal, 8/9).

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