Are orthopedic surgery offices that own onsite magnetic resonance imaging (MRI) equipment more likely to require patients to have an MRI than those offices that do not? New research from the Texas A&M Health Science Center School of Public Health indicates the answer to this question is no.

Concerns about the effects of physician ownership of equipment for ancillary services such as imaging resulted in the “Stark Laws,” named for the primary sponsor, U.S. Representative Pete Stark. These laws generally prohibit provider “self-referral” for Medicare patients, defined as physicians referring patients for certain “designated health services” if the referring physician or their family has a financial relationship with the service provider.

The Stark Laws include an exemption for “in office” (onsite) ancillary services such as an MRI, to allow integration across services in HMOs and other integrated delivery organizations. Recently this exemption has been under fire as a “loophole” in the Stark Laws that should be closed.

Research published this month in Health Economics Review by a team lead by Robert Ohsfeldt, Ph.D., professor in the Health Policy and Management Department at the Texas A&M School of Public Health, indicates the concern to be unfounded, at least in the case of the onsite exemption.

The study involved a web-based survey of orthopedic surgery practices to determine if and when the practice first acquired onsite MRI capacity. Ohsfeldt’s team analyzed Medicare claims data from 2006-2010 focusing on the change in Medicare MRI volume one-year pre- and post-onsite MRI acquisition. Researchers found that those orthopedic surgery practices acquiring onsite MRI equipment had substantially higher Medicare MRI volume both before and after the year of MRI acquisition, but did not have a statistically significant increase in the rate of MRI use for Medicare patients when compared to those without onsite equipment over the same time period.

“The fact that practices that used MRIs most intensively were most likely to acquire an onsite MRI is consistent with transactions cost theory, which predicts that practices that tend to use MRIs a lot have more to gain from the greater organizational control for an onsite MRI versus an external MRI supplier,” Ohsfeldt said. “Practices with more providers were more likely to acquire an onsite MRI than smaller practices, presumably because larger practices are in a better position to manage the high fixed cost of MRI equipment.”

The research team included Pengxiang Li, Ph.D., of the University of Pennsylvania Perelman School of Medicine, and John Schneider, Ph.D., of Avalon Health Economics.

— Rae Lynn Mitchell

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