IMRT was first developed in the 1990s. It improved upon older radiation technology with a combination of new software and hardware that could mold a radiation beam to match the shape of a tumor.
Medicare started paying for IMRT in 2002, setting its reimbursement rate for the procedure high to take into account the costs of the technology and the added personnel required to administer it. The price of a new linear accelerator can exceed $1.5 million.
The new Medicare reimbursement coincided with urologists' loss of a major source of income. Throughout the 1990s, many urologists had supplemented their revenues through an arrangement with the maker of Lupron, a hormone drug for prostate cancer. Under the arrangement, Lupron producer TAPPharmaceutical Products Inc. sold urologists the drug at a steep discount, while the urologists in turn billed Medicare for the full price.
The arrangement ended in 2001 when several urologists were indicted and TAP Pharmaceutical paid more than $840 million to settle a Justice Department investigation. Deprived of the Lupron profits, some urologists' incomes declined by as much as one-half, according to several urologists who were practicing at the time.
IMRT emerged as the perfect income substitute, says Mark Harrison, a radiation oncologist based in McAllen, Texas, who first had the idea of integrating IMRT into a urology practice.
Bob GiglioneDr. Deepak Kapoor of Integrated Medical Professionals in New York.
After consulting lawyers, Dr. Harrison determined that administering IMRT in urologists' offices would fall within an exception to the so-called Stark law, which bars doctors from referring Medicare patients to facilities in which they have a financial interest.
The exception—which was included in part to accommodate prestigious multispecialty institutions such as the Mayo Clinic—allows doctors to provide "ancillary" services in their offices during a patient's visit, such as lab tests.
Armed with his legal opinions, Dr. Harrison created a company called Urorad Healthcare LP in 2004 to advise urology groups on how to set up and run radiation facilities. In its marketing materials, Urorad told urologists that buying IMRT equipment could "potentially double their practice revenue."
In one presentation titled "FAQ'S," Urorad projected a practice's annual return on investment at $425,000 per doctor, if each urologist in the practice treated an average of one-and-a-half new patients a month.
With the disappearance of Lupron profits "and rising overhead, urologists need to seriously begin considering new revenue sources, and there is no better revenue source available to urologists than IMRT," the document stated.
Dr. Harrison, who acknowledges writing the marketing pitches, says the returns they cite are offset by the big up-front cost of building a radiation center, which he says can reach $5 million. "Urologists take significant risks" by taking out large bank loans to pay for the facilities, he says.
Dr. Harrison says Urorad has helped 15 urology groups build IMRT centers over the past six years, and generated revenues of $10 million in 2009. He says he is proud of the role his company has played in urologists' adoption of IMRT because "it's brought a good treatment to a lot of people."
Urorad's first clients included two Texas urology groups, one in McAllen and another in San Antonio. Texas has since become one of the centers of the movement, with six big urology groups that own linear accelerators and employ radiation oncologists.
Medicare Investigation Reveals a Sharp Rise in Controversial and Expensive Prostate Cancer Treatment - WSJ.com
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