Obama Administration Fiscal Year 2014 Budget Would Restrict Self-Referral of Advanced Medical Imaging and Radiation Therapy

April 10, 2013

The Obama administration has released the long-anticipated budget proposal for Fiscal Year (FY) 2014. Although the document did not include specific reductions in reimbursement for advanced diagnostic imaging services, the FY 2014 budget would largely exclude certain imaging services from the in-office ancillary services exception (IOASE) to the Stark self-referral law and calls for prior authorization for advanced imaging services.

The FY 2014 budget recommends the exclusion of certain services, specifically advanced diagnostic imaging, radiation therapy and physical therapy, from the IOASE to the Stark self-referral law. This particular self-referral policy proposal, however, provides an exception “in cases where a practice meets certain accountability standards, as defined by the Secretary.” No further details are available at this time to further clarify this portion of the policy. According to documents recently released by the Office of Management and Budget, closure of this loophole is expected to save the government $2.14 billion over five years and $6.05 billion over 10 years.

While the Obama administration includes provisions supporting the imposition of third-party, prior authorization for the most expensive imaging services, the budget document essentially renders this concept meaningless by acknowledging that no savings can be generated from this policy. Favorable past recommendations from the Government Accountability Office as well as expanded use in the private sector are the primary reasons cited by President Obama in support of prior authorization services.

“First and foremost, the College is pleased that the Obama administration correctly recognized the need to avoid any further injurious reductions in imaging reimbursement within its latest budget proposal,” said ACR Chairman of the Board of Chancellors, Paul H. Ellenbogen, MD, FACR. “It is also truly gratifying to see that, after many years of persistent advocacy by ACR’s membership, leadership and staff, in concert with our colleagues at the Alliance for Integrity in Medicare (AIM), the Obama administration is finally recognizing the importance of stopping abuse of advanced diagnostic imaging services through the Stark self-referral loophole. Nevertheless, we recognize that the policies outlined in the FY 2014 budget, especially those pertaining to self-referral, are not binding legislation and much more work is needed to be done before these changes are enacted into law.”

It is important to note that the release of the president’s budget is only one of several means that the administration can use to change reimbursement policies for radiologists. The Patient Protection and Affordable Care Act gave the Secretary of Health and Human Services expansive authority to lower physician reimbursements. As has been done repeatedly, we can expect a new round of proposed reimbursement changes to our services in upcoming rulemaking from the Centers for Medicare and Medicaid Services throughout this year.

ACR encourages all members to continue to monitor the ACR website for additional information pertaining to the FY 2014 budget.

          Reprinted from the News Publications of the American College of Radiology website (

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