The courts ruled that the three exceptions to self-referral prohibitions included in the 1993 law could not apply to CT, MRI and radiation therapy.

They judged the "within-office" exception largely applies to patients being transferred to another physician in the facility if, say, one was out of town, and not for referral on imaging tests. They also noted that the so-called "supervision" exception, which lets doctors self-refer for tests they run or oversee, only applies to procedures in outside facilities, and not in the doctor's own offices. The appeals court said this interpretation was in line with American Medical Association policy.


The court also found the "in-office ancillary services" exception was meant for certain routine tests, but that the law specifically ruled out by name MRI, CT and radiation therapy. The court further said it was "highly improbable" and would make "no common sense" for the legislature to intend to permit those services under the other exemptions but ban it in this one.

"Ghosts" of intent

The court based its ruling on a mix of close reading of the law's language and what it called "hunting the ghost of legislative intent."

The Appeals Court noted one indication that state lawmakers wanted to include MRI and CT scans in the self-referral bans was they repeatedly resisted attempts to amend the self-referral law to include these procedures. The state's General Assembly rejected both a 2007 bill to amend the self-referral law to permit rural group practices to perform MRI and CT scans and a 2008 bill that would have let the in-office ancillary services exception explicitly include MRI and CT scans.

Maryland's laws are generally held to be tougher than the federal legislation, known as the Stark Law. These are actually three separate laws that first took effect in 1992. These laws ban self-referral for some Medicare and Medicaid patients, though they provide broader in-office ancillary exceptions.

For years, the radiologist and radiation oncologist groups have petitioned Congress to pass laws that would block these exceptions. "The Maryland law is a model to which other states should look -- to maintain quality, curtail inappropriate utilization and ensure that health care dollars are spent effectively," said Dr. John A. Patti, chair of the ACR Board of Chancellors.

Though ACR failed to get language in the health reform legislation passed last spring which would have nixed the in-office ancillary exemptions, it did manage to get a new disclosure rule through. The rule, which took effect this year, requires referring doctors to give Medicare and Medicaid patients a written notice of at least five rival groups within a 25 mile radius of the doctor's office.

Back to HCB News

More Industry Headlines