From the November 2011 issue of HealthCare Business News magazine

Some states have also taken steps to contain physicians who are not complying. Just this March, the Maryland Board of Physicians mailed warning letters to all physicians in possible violation of the law. Physicians who received a warning letter were ordered to provide, within 10 business days, current information about the practice, ownership in both the practice and MRI equipment and whether he/she refers patients to practice-owned MRI equipment. If the board found the physician was indeed in violation, a 60-day deadline to cease self-referrals was imposed.

So what about the ethics involved?

The American Medical Association thought it was enough of a concern to address the issue in its Code of Medical Ethics. The AMA’s written opinion states that business arrangements among physicians in the health care marketplace can be “ethically challenging when they create opportunities for self-referral in which patients’ medical interests can be in tension with physicians’ financial interests.”
The opinion goes on to say that, “…such arrangements can undermine a robust commitment to professionalism in medicine, as well as trust in the profession.”
However, when contacted to provide comment on the challenges of curbing self-referral, the AMA would not provide a statement.

There appears to be little debate, however, on whether or not physician self-referrals impact the use of health care services. Recent research has linked self-referrals to a definite increase in health care spending. A study in the July issue of the Journal of the American College of Radiology compared the frequency of referrals made by clinicians who have imaging equipment on-site with clinicians who do not. The study found that non-radiologists who self-referred patients for medical imaging were almost 2.5 times more likely to order imaging than clinicians with no financial interest. The estimated cost of increased imaging in the setting of self-referral was $3.6 billion, according to 2006 Government Accountability Office data.

In the October issue of Health Services Research, a group of Stanford University researchers found that when orthopedists acquire their own MRI equipment, the chances that they will perform surgery on their patients with lower back pain increased by 34 percent.

The authors also concluded that orthopedists and primary care physicians who begin billing for performing MRI procedures, rather than referring patients outside of their practice for MRI, “appear to change their practice patterns such that they use more MRI for their patients with low back pain.”
“We wanted to demonstrate that there is not only increased use of MRIs, but also that this increased use of MRI could lead to something called a treatment cascade, where patients can receive subsequent procedures which are of low value to the patient and that can also drive up health care expenditures,” lead author Jacqueline Shreibati told the Stanford Daily.

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