Medicare Doctors May Be Boosting Health Costs By Seeking Personal Financial Gain

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Doctors that can refer patients to themselves for physical therapy are doing so at rapidly increasing rates, according to a new federal report, raising questions over whether they’re seeking financial benefits at the cost of taxpayers.

The General Accountability Office (GAO) released a report Monday that found that the rate of physicians who “self-referred” for physical therapy, or instructed patients to take physical therapy at their own practice, is growing — but the rate of referring patients to a different physician for physical therapy has stayed flat.

The GAO looked at doctor practices in family practice, internal medicine and orthopedic surgery specialties, which together make up 75 percent of all physical therapy referrals. Orthopedic surgeons were the only group where physicians that referred patients to themselves did so less often than those that referred patients to another physician.

The idea that physicians are referring patients to themselves to make more money off Medicare is buffeted by a spike in the rate of referrals when physicians first begin to do so. GAO found that the year that a physician first begins to self-refer, their referral rate rises faster than providers — even providers within the same specialty that send patients to other doctors.

For one, family practice physicians that began referring patients to themselves in 2009 increased referrals for physical therapy by 33 percent between 2008 and 2010. But family practice providers that sent patients to other doctors for physical therapy increased their physical therapy referrals by a much smaller 14 percent.

Medicare costs are a growing concern: In 2012, Medicare took up 16 percent of federal spending, according to the Kaiser Family Foundation. The Department of Health and Human Services has taken some steps in response to calls for greater cost transparency, such as releasing a trove of Medicare payment data several months ago in an attempt to increase transparency. 

But the department has also been loath to reveal more data. A top investigative nonprofit recently used the Obama administration’s Department of Health and Human Services for refusing to release information on Medicare Advantage payments through a public records request. (RELATED: Award-winning Investigative Journalists Sue Obama Admin Over Medicare Advantage Transparency)

The report was requested by a bipartisan group including Republican Sen. Tom Coburn and Democratic Reps. Sandy Levin and Henry Waxman.

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