On health care, lobbyists flex muscle

Medicare overruled on bone scan tests

By Christopher Rowland
Globe Staff / May 31, 2010

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WASHINGTON — In its heyday just four years ago, Dan Burneika’s company performed 2,000 medical imaging exams a month, deploying a fleet of 10 mobile scanners that roamed New England, testing the bones of elderly women for signs of osteoporosis.

But Medicare decided it was paying too much for each test and began cutting the reimbursement from about $140 to $50. With his profit margin eroding, Burneika and his partner sold their mobile scanners and closed the business in Harvard, Mass.

“It was quite profitable,’’ said Burneika. “Until the end.’’

But for lobbyists, the battle was just beginning.

A $3 million campaign by doctors, scanner operators, manufacturers, and groups devoted to women’s health helped persuade lawmakers to overrule Medicare administrators this year and restore much of the reimbursement for osteoporosis tests. In a little-noticed provision buried deep in the sweeping new health care bill, Congress decreed that Medicare shall pay $97 for each test, instead of $50.

It was a stark instance of a narrowly tailored, special-interest political victory in a law trumpeted by President Obama and Democrats as putting America on a path to a more rational health care system, where decisions are made on medical evidence and patient outcomes.

“The insertion of a price boost for one specific good or service in a law is exactly the wrong way to set Medicare prices,’’ said Austin Frakt, a health economist at Boston University. The move was ironic, he added, calling it a case of congressional meddling in a bill that was otherwise loaded with measures setting up a variety of pilot programs for reforming the system.

Some also wonder if it is a harbinger of more political fights over health pricing, as the medical industry tries to resist government efforts to link Medicare and Medicaid payments to things like medical evidence and patient outcomes.

“In the future, as we get to tighter and tighter concerns about health care costs, is this going to happen more often?’’ said Dr. Mark McClellan, the former Medicare chief under President George W. Bush and now director of the Engelberg Center for Health Care Reform at the Brookings Institution, the Washington think-tank.

Medicare officials have worked for years to reduce inappropriate use of expensive imaging tests. Such services are often ordered by doctors with a financial interest in the testing machines, a phenomenon documented by government studies that suggest a quest for profit can drive excessive use.

It is important for patients with certain risk factors to receive a bone scan when they turn 65, according to health specialists. But the guidelines are not uniformly followed. Patients treated by some physicians get too many bone scans, while others get none at all.

To fight off Medicare’s price cut, industry lobbyists argued to Congress that the action would force doctors and radiology centers to close their scanners, leading to reductions in the diagnosis of osteoporosis among a highly vulnerable group of patients, elderly women.

Hologic Inc., a manufacturer that makes its bone scanners in Bedford, Mass., spent $420,000 lobbying Congress in the last four years. Hologic declined to comment.

GE HealthCare, a global giant in production of many types of imaging machines, spent $540,000 on this and other issues. A spokesman for GE HealthCare, Jeff DeMarrais, said the company openly participates in the public debates and is “focused on consumer access to life-saving and life-enhancing solutions.’’

Amgen Inc., a large California biotechnology company which is bringing a new osteoporosis drug onto the market, spends million of dollars every year on an array of issues, including $110,000 over the last year that was targeted in large part on bone scanning reimbursement. Amgen did not respond to a request for comment.

Several industry-backed and physician groups spent hundreds of thousands more, including the National Osteoporosis Foundation and the International Society for Clinical Densitometry.

Faced with dire warnings that access would be lost, Congress ultimately agreed with the lobbyists. But with federal officials saying they were not shown any evidence of access problems, lawmakers simultaneously commissioned a study to test industry’s claims, ordering the US Institute of Medicine to determine if price cuts affect the ability to get a scan.

US Representative Shelley Berkley, Democrat of Nevada, a champion for overturning the Medicare cut, who herself is being treated for osteoporosis, said logic dictated that more scanners, and more scans, would benefit public health.

An estimated 10 million Americans are believed to have osteoporosis, but many won’t know they have the disease until they break a bone. The cost of osteoporosis-related fractures in the United States is estimated at $19 billion a year.

Detecting the disease early has clear benefits: Once diagnosed, bones can be protected against breaks through the use of drugs.

“You have to view these things through common sense. And it doesn’t take a genius to figure out that providing bone density tests for elderly Americans will save this country billions of dollars,’’ said Berkley. “In addition to saving taxpayers money, it will prevent suffering that people with osteoporosis have.’’

Berkley and the key Senate sponsor, Blanche Lincoln, an Arkansas Democrat, who was a pivotal vote in the Senate in favor of health reform, have received hundreds of thousands of dollars in campaign contributions from medical industry sources, including physicians, as have many other lawmakers.

Among the lobbyists working on behalf of several corporations on the effort was a former top staffer to Lincoln, Drew Goesl, who was listed on public disclosure records as being among the people at Washington lobbying firm Capitol Counsel who worked on the issue.

Goesl did not respond to a request for comment. A spokeswoman for Lincoln said neither campaign contributions nor Goesl’s involvement played any role in her position.

“Part of her effort to strengthen and improve Medicare includes recognizing when a particular test with enormous potential to prevent health problems and significant promise of cost-savings is being taken out of doctors’ offices because providers can’t afford it,’’ said Lincoln spokeswoman Marni Goldberg. “That’s a flaw in the system that needs to be addressed.’’

A spokesman for Berkley said campaign contributions did not influence her views on the issue.

Medicare decided in 2006 to reduce the reimbursement gradually from $140 to $50 by this year. Billings for the exams in 2006 were $266 million for the most accurate type of test. The number of scans rose steadily over the last decade, to about 2.8 million. Although specialists say that is a good trend, the scans are not spread evenly across affected populations.

“There are a lot of worried, well people who get a bone density test every other year, when science is telling us you need it only once,’’ said Dr. Heidi D. Nelson, a researcher at the Oregon Health & Science University who has analyzed the use of bone scans for the US government. “Some people get way too much. Some people don’t get any.’’

Congress created the market for bone scans in 1997, when it passed a law that said Medicare should cover the services. New technology and drugs made it possible to reduce hip fractures, a major risk and often devastating affliction for the elderly.

Doctors across the country installed bone scanning machines in their offices in the last 12 years, often under leasing programs that required no money down.

Medicare based its decision to reduce reimbursement on a revised analysis of the cost of purchasing or leasing scanners, the time and staff resources used to operate the machines, and the value of the tests in relation to other Medicare-covered services.

“Physicians who use this equipment regularly in their practices should be able to cover their costs,’’ said Medicare spokeswoman Ellen Griffith. She said Medicare has not heard specific complaints about access problems for patients.

Indeed, the cut fell hardest on practices that used their scanners the least, exposing what medical economists see as inefficiency in the system.

“It should not be the taxpayers’ responsibility . . . to offset [an individual practice’s] relatively low volume usage of the equipment,’’ said Dr. Arnold Milstein, medical director of the Pacific Group on Health, the largest business health care purchasing coalition in the United States, and a lead consultant at Mercer, a large medical advising firm.

But the cut was based on faulty assumptions, including a calculation based on antiquated technology and not the scanners in actual widespread use, said Dr. Harold Rosen, a staff physician at Beth Israel Deaconess Medical Center and a member of the Society for Clinical Densitometry board.

He said bone scans are not in the same league as MRIs and CT scans when it comes to expensive medical imaging, and that Medicare’s cut would have prevented most facilities from breaking even.

“If you think what we have gotten passed here is an ability to soak the government and soak Medicare,’’ said Rosen, “we ain’t soaking anybody.’’

Christopher Rowland can be reached at