In the first, known prospective study, Pennsylvania orthopedic surgeons admitted that almost 20% of the imaging studies they ordered were for defensive purposes.
Physicians swear that most doctors practice it.  Plaintiff attorneys question that, and argue whether states that have enacted tort reform impact defensive medicine rates.

A total of 72 orthopedic surgeons agreed to participate, submitting information on a total of 2,068 scans. Of these, 396 — 19.1% — were listed as primarily defensive. About 70% of these were conventional x-rays and 25% were MRI scans. But the MRI scans accounted for about 75% of the defensive costs, Miller and colleagues estimated using Medicare reimbursement rates.

A study in Health Affairs last year pegs the number at $56 billion, or 2.4% of the nation’s total health costs, while the CBO estimated last year that tort reform, in guise of malpractice caps, would save about $55.6 billion, mostly by curbing defensive medicine.

Back to the study, which was conducted in Pennsylvania, traditionally viewed as a malpractice-unfriendly state to practice medicine.  Repeating the same study in a state that has enacted tort reform, like Texas, would be helpful.  That way, we can determine whether tort reform has any impact on defensive medicine rates, and perhaps, contribute more evidence supporting physicians’ point of view.

Though this kind of practice is not very prevalent here in India it can be nipped in the bud if the tort reform is found worthy

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http://www.kevinmd.com/blog/2011/02/defensive-medicine-accounts-20-mri-scans-xrays.html