Much of the recent debate over physician self-referral focuses on a simplified notion of in-office imaging where, nonradiologists argue, patient convenience prevails. But many radiologists are now facing the more complicated variant of self-referral through leases.
The basic concept, apparently pioneered by entrepreneurial imaging providers around the U.S., allows referring physicians to contract and then bill for services provided to their patients.
The difference between the lease costs and the reimbursement goes to the referring physician, which may explain why more are referring to entities that offer such deals, or even asking for leases from radiologist-owned facilities.
"There's tremendous pressure in the marketplace for radiologists to participate with nonradiologist physicians in various arrangements," said Washington, DC, healthcare attorney Thomas Greeson. "There's probably not a single referring physician who hasn't heard about it."
But while the popularity of such arrangements might suggest that the legality question is settled, it may not be.
In fact, federal officials have suggested that these ventures can violate federal antikickback laws. Many states also have their own antikickback laws, and at least one state's attorney general has apparently been looking at lease deals.
Seeking relief
Many radiologists would welcome enforcement action, given that they otherwise face a choice of giving up some income versus even more income.
Radiologists in many markets are now being forced to consider lease arrangements, Greeson said. "They really don't want to have to do that, but in order to work with their referring physicians they're trying to structure, to the extent they can, lawful and appropriate arrangements."
Some opponents of leases are hoping that more publicity about the arrangements will raise greater ethical and practical objections to them.
Dr. Leonard Berlin, chairman of radiology at Rush North Shore Medical Center in Skokie, IL, recently co-authored a journal article that he hoped would inspire radiologists to eschew such deals and contact lawmakers instead (Radiology, January 2005, Vol. 234:1, pp. 44-48).
But Berlin suggested that legislative action may be a distant prospect, inasmuch as it would require legislators to go against the wishes of a much larger constituency.
"Remember, the medical community out there is 90-plus percent nonradiologists," Berlin said. "Why would they be against leasing?"
Others are looking for a policymaker response to Monday's front-page article ("MRI and CT Centers Offer Doctors Way to Profit on Scans," May 2, 2005) in the Wall Street Journal, which started with an anecdote on how referring physicians were offered a net of $234.77 for every MRI scan in one arrangement.
"I think this is going to raise the bar with the government and the other insurers," said Dr. James Borgstede, chairman of American College of Radiology in Reston, VA. "You're beginning to see objective groups, that don't have a dog in the fight, see this as bad care."
But Dr. Michael Brant-Zawadzki, medical director of radiology at Hoag Memorial Hospital in Newport Beach, CA, argues that the article may only convince policymakers and insurers that they could be paying less for imaging.
"To Medicare and the insurance companies, it's like, 'Hey wait a minute.'" Brant-Zawadzki said. "'If these facilities, based on what we pay them, can afford to do the study, pay the radiologist, and then pay the doctors to refer, we're paying too much for these services.'"
Legislative action on leases might also be irrelevant if such deals are waning in the face of better arrangements, as Brant-Zawadzki said is the case in Southern California.
"It's easier, more legal, and more money to be made if you do in-office imaging, so long as you have enough docs to call yourself a group," Brant-Zawadzki said. "We're seeing oncologists and cardiologists team up as a single group, for instance, purely for the purposes of doing imaging."
Devilish details
In other parts of the country, however, lease arrangements are apparently proliferating and radiologists are feeling more pressure to participate in them.
Legal considerations include structuring the deals to meet the in-office exemption under the federal Stark law. Ironically, although such arrangements may read like something the law was intended to discourage, the leasing trend actually got a big boost from the Stark final compliance rules issued in 2001, according to Greeson.
The more likely legal halt to leasing arrangements may come from enforcement of antikickback laws. Healthcare attorneys point to an advisory letter issued late last year by the Office of the Inspector General (OIG) in the Department of Health and Human Services.
In the letter, enforcement officials cited their "long-standing concerns about certain problematic joint venture arrangements between those in a position to refer business, such as physicians, and those furnishing items or services for which Medicare or Medicaid pays...."
On the state level, as of a few months, the Minnesota attorney general's office was investigating the legality of some lease arrangements, according to health law attorney Janet Newberg of St. Paul, MN.
The state's antikickback law would apply even to services paid for by private insurers. A spokesman for the attorney general declined to confirm whether any investigation had been launched or was ongoing.
But in the absence of any definitive enforcement activity, the lease deals continue.
"I've heard it from prospective clients and others in the industry," Newberg said. "'We know that what we want to do may not be absolutely compliant with the law, but who's been sent to jail?'"
"Most of my clients tend to be conservative, and they are not willing to take that risk," Newberg continued. "But it can be disheartening to see competitors out there who are grabbing large shares of the market through practices that, at a minimum, make many raise their eyebrows."
Even some referring physicians who are troubled by the ethics or legality of such arrangements are feeling pressure to engage in them, Newberg said. "They see that some of their competitors are getting a chunk of that technical component billing fee."
By Tracie L. Thompson
AuntMinnie.com staff writer
May 5, 2005
Related Reading
U.S. Congress hears debate over federal imaging standards, March 17, 2005
ACR to pitch Congress on 'designated physician imagers' for Medicare, January 6, 2005
Nation's largest insurer to adopt ACR criteria, accreditation, December 12, 2004
States, payors seek to stem tide of self-referral abuse, October 29, 2004
Stark II interim final rule leaves huge self-referral loophole, July 20, 2004
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