The Effect of Utilization Regulation: The Case of CT Scans and the Affordable Care Act

In an effort to reduce inappropriate and unnecessary medical imaging, provisions under the Affordable Care Act (ACA) led the Centers for Medicare and Medicaid Services to establish six outpatient imaging efficiency metrics (IEM) that would be publicly reported on Hospital Compare. These metrics would allow consumers and payers to compare the IEMs between hospitals as partial measures of hospital quality to incentivize hospitals to minimize inappropriate imaging orders.  However, there are no explicit benchmarks, financial incentives, or penalties associated with the IEM metrics. Complicating this form of regulation, the incentives of ordering physicians may not always be aligned with those of hospitals. This can limit a hospital’s ability to change physician behavior given the complex contractual arrangements between hospitals and their physicians.  Together, these issues raise questions regarding the efficacy of this kind of regulation to curb inappropriate care.

            We develop a model describing both hospital and physician behavior in response to this regulation where hospitals voluntarily comply to reduce imaging associated with the IEMs in expectation of future penalties but have varying capacities to influence physician behavior.  Using this framework, we then test whether the IEM was associated with reductions in imaging by focusing on IEM OP-14 which reports rates of same day brain and sinus computed tomography (CT).  Using Medicare claims data from 2008-2013, we examine the likelihood that a patient receiving a brain CT also received a sinus CT on the same day is associated with the reported OP-14 measure at the patient’s facility. We employ a logistic difference-in-difference regression model that exploits same day brain and sinus CT imaging orders outside of hospital care settings, and thus not reported as a part of IEM OP-14,  as a control group and adjusting for confounders such as patient characteristics, patient risk, ordering physician, and geographic variation in care.

            Preliminary results indicate that IEM OP-14 was associated with a small but significant reduction in same day brain and sinus CT orders, with the likelihood of a same day brain and sinus CT being ordered falling by 2 percent to 5 percent, and on average reducing utilization by 3.8 percent across all model specifications.  However, a significant increase in utilization associated with passage of the ACA offset the effect of IEM OP-14 in most model specifications. These preliminary results were qualitatively similar after testing other model specifications such as controlling for same day brain and sinus CTs in hospital emergency departments, which are responsible for much of the growth in CT utilization over time.