Like Captain Renault in the film classic Casablanca, investigators from the United States Government Accountability office (GAO) were “Shocked—shocked!” to discover that health care providers with a financial interest in a pricey prostate cancer treatment were more likely to refer patients for that treatment.

Responding to a request from Congress, the GAO issued a report1 declaring that Medicare providers who acquired a stake in a facility providing intensity-modulated radiation therapy (IMRT) services rapidly increased their referrals for IMRT, a process known as self-referral.

IMRT is estimated to be as safe and effective as brachytherapy and radical prostatectomy for low-risk prostate cancer, but considerably more expensive—about $14,000 more per course of treatment. In 2010, Medicare was billed $700 million for IMRT services for prostate cancer patients, $190 million of which was paid to self-referring providers.

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Federal law generally prohibits self-referral by Medicare providers, with certain exceptions; IMRT among these exceptions.

From 2006 through 2010, self-referring providers increased their use of IMRT services from 80,000 per year to 366,000 per year, representing a whopping annual growth rate of 46%. Not surprisingly, the number of self-referring practices also increased. Conversely, the number of IMRT services performed annually by non–self-referring providers declined from 490,000 to 466,000.

Most of the growth in referrals for IMRT came from providers who began self-referring during 4-year period. These “switchers” referred 37% of their newly diagnosed patients for IMRT prior to acquiring a financial interest in the treatment, at which point it increased to 54%. Providers who weren’t switchers—that is, consistently did or did not self-refer throughout the study period—did not change their referral patterns.

Medicare providers who self-refer IMRT services are not required to disclose their financial interest, so patients may not be aware that their provider has an incentive to recommend IMRT over treatments that may be equally effective, have different risks and side effects, and are less expensive.

The differences in referral for IMRT could not be explained by patient age, geographic location, or health status. “Taken together,” the GAO report concluded, “our findings suggest that financial incentives were likely a major factor driving the increase of IMRT referrals among self-referring providers.”

The GAO recommended that Congress consider directing the Secretary of Health and Human Services to require providers who self-refer IMRT services to disclose their financial interest to their patients. Additionally, the GAO also suggested that the Centers for Medicare and Medicaid Services require providers to indicate on their invoices whether they were self-referring for IMRT, but stopped short of recommending a ban on self-referral for IMRT.

In response, the American Association of Clinical Urologists (AACU), the American Urological Association (AUA), and the Large Urology Group Practice Association (LUGPA) called the GAO report “flawed and misleading.”

“The GAO provided no evidence that patients were being provided radiation therapy inappropriately by integrated urology practices that had acquired IMRT,” the three organizations’ joint statement read.

“Changes in treatment patterns are due to evolving clinical standards for treatments and the patient’s ability to make more informed decisions after evaluating a variety of medical opinions with their physician, and are not driven by equipment ownership,” said Dr. Deepak A. Kapoor, President of LUGPA.

“Furthermore, the GAO completely disregarded peer reviewed literature that demonstrates that IMRT has become the clinical standard of care for prostate cancer patients,” the statement continued.

Senate Finance Committee Chairman Max Baucus had a blunt reaction to the GAO report. “Unfortunately, when you look at the numbers in this report, you start to wonder where health care stops and where profiteering begins,” he said in a statement.


1. US Government Accountability Office. Higher Use of Costly Prostate Cancer Treatment by Providers Who Self-Refer Warrants Scrutiny. July 13, 2013. Accessed at