September 20, 2014

GAO Study Raises Questions on Doctors’ Financial Interests

  • The American health care system is a patchwork of public and private programs that serve citizens in different ways, depending on their age, military...

Doctors who have financial interests in radiation therapy centers are much more likely to prescribe radiation treatments for prostate cancer, according to a new Government Accountability Office (GAO) study.

This is the latest in a series of GAO studies that show doctors prescribe certain treatments more frequently when they have financial interests in medical facilities that offer those treatments.

Radiation therapy is a common treatment for prostate cancer although the study says alternative remedies may be equally effective and less expensive for patients and Medicare.

Federal law generally prohibits doctors from having financial interests in the treatments they prescribe for Medicare beneficiaries. But there are exemptions, including for radiation therapy. GAO investigators concluded that many patients who received radiation therapy did not know their doctors had such financial interests in the medical centers providing the treatment.

The current fee-for-service payment system for Medicare simply reimburses doctors for the amount of services they provide. This makes it easier for doctors who have a financial stake in certain medical technologies to prescribe costly and potentially unnecessary treatments.