GAO Report on Self-Referring Providers' Referring Medicare Patients for Physical Therapy

Press Release

The Government Accountability Office (GAO) today released its fourth and final report on medical self-referrals at the request of Senate Judiciary Committee Ranking Member Chuck Grassley (R-Iowa), House Ways and Means Committee Ranking Member Sander Levin (D-Mich.) and House Energy and Commerce Ranking Member Henry A. Waxman (D-Calif.), showing self-referring providers refer more individual patients for physical therapy in Medicare than non-self-referring providers.

"While previous GAO reports have shown a conclusive link between self-referrals and increased medical spending, this report's findings are less clear," Grassley said. "The report does show that we need to continue to monitor this area to be sure doctors aren't unnecessarily referring patients for physical therapy when they have a financial interest. Medicare dollars should be spent appropriately, not wasted on unnecessary services."

"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 health care system that promotes better care, not higher volume," Levin said. "The first three reports offered dramatic evidence of the link between self-referrals and increased medical spending while the latest found that self-referring providers refer more individual patients for physical therapy than non-self-referring providers. Viewed collectively, the four GAO reports show substantial evidence that financial incentives, not patients' needs, are driving some referral patterns."

"Along with my colleagues, I remain concerned about the effect of physician self-referral driving unnecessary use of health care services," said Waxman. "The findings in today's report, while not as direct as other reports on this topic, raise additional questions for exploration."

Today's report is the fourth and final in a series of GAO reports examining the relationship between providers and entities in which they have a financial interest. The first three reports clearly showed a correlation between self-referral and an increase in medical spending, and that doctors referred more patients for services when they have a financial interest in the services. The first, released in October 2012, investigated the growth of self-referral in magnetic resonance imaging (MRI) and computed tomography (CT) services. It found a similar increase in imaging services ordered by physicians who self-refer compared to those who do not. The second, released in July 2013, revealed a dramatic rise in self-referrals for anatomic pathology tests and procedures. The third, also released in August 2013, revealed a dramatic increase in the rates of doctors pushing patients with prostate cancer toward a particularly expensive form of treatment when the doctors stood to make a personal financial gain.

The final report examines providers who offer physical therapy services. Unlike the previous reviews, GAO did not find a direct correlation between self-referral and billing per patient. Although GAO found that self-referred physical therapy services increased 10 percent between 2004 and 2010, self-referred services decreased as a total percentage of physical therapy expenditures during that period. While there may not be a direct link between self-referrals and cost, there does appear to be a relationship between self-referring providers and the overall number of individuals referred for physical therapy. GAO found that self-referring providers refer more individual patients for physical therapy than non-self-referring providers. This could mean that providers are unnecessarily referring patients for physical therapy when they have a financial interest.

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