Some physicians using loopholes in self-referral law

A study published in Health Affairs found that some physicians are using loopholes in legislation meant to reduce self-referrals. Investigators used information provided by California insurance companies to determine the self-referral status of providers who in 2004 billed for imaging procedures. According to the report, the billings labeled as self-referral were broken down by MRI, CT, and PET. The numbers of providers listed as “self-referral” in each modality category were 33 percent, 22 percent, and 17 percent, respectively. They found that of those classified as self-referral, 61 percent who billed for MRI and 64 percent for CT did not own the imaging equipment. Instead they were involved in lease or pay-per-scan models. While some of these approaches are legal, others could be against federal or state law.

Federal law dictates that in most instances physicians are taking part in illegal activity when they refer Medicare or Medicaid patients for certain health services in which the physician has a financial stake. And many states have similar restrictions regarding privately insured individuals, the study authors point out.

Yet there are those who believe “that self-referral arrangements in which physicians integrate the provision of ancillary services into their practices improve patient care,” the authors wrote.