Physician self-referral is a term describing the practice of a physician ordering tests on a patient and having them performed either by himself or by a facility from which he receives a financial incentive for the referral. There are many forms of self-referral.

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  • Physician self-referral is a term describing the practice of a physician ordering tests on a patient and having them performed either by himself or by a facility from which he receives a financial incentive for the referral. There are many forms of self-referral. Examples are: having an EKG done in your internists office, having an x-ray done in your physicians office, suggesting a surgery that would be done by the physician suggesting it, or the ordering of imaging tests done at a facility owned or leased by the ordering physician. It has been long recognized that the ability to self refer is an incentive to physicians to order more tests than they might otherwise. Laws designed to control this have been passed: Stark Law I and II. However the exceptions designed to allow necessary testing in physicians offices have been exploited to largely nullify the intent of the law. In particular, the in-office exception, which allows testing on equipment in the physicians office, has resulted in many physicians purchasing high-tech and expensive equipment such as CT scanners, MR scanners, and Nuclear Scanners for their own offices. Such purchases were not foreseen at the time that the laws were written. The incentive for this practice is in large part the result of rapidly declining reimbursements for what has been termed “cognitive” physician care, i.e. the time spent talking to a patient and determining what course of diagnostic testing or treatment is best for that patient. Many clinical physicians feel that in order to have a financially viable practice, it is necessary to have income streams derived from patient testing. The impact has been greatest in the field of imaging or Radiology. It is important to understand that the revenue derived from performing imaging exams comes from two sources: the facility fee and the professional fee. The facility fee is reimbursement for the use of the machine and all the associated technical costs. The professional fee is the amount paid for interpretation of the results by the Physician. Physician owners of the imaging machinery can derive profit from the venture by collecting both of these fees. The fees are paid by the patient, the patient's insurance company or the government. For example, when a patient is seen at a hospital and receives a CT scan, a technical fee is paid to the hospital to cover the costs of the CT machine and running it. The professional fee is charged by the Physician Radiologist to interpret the exam and document the findings. This is the common ethical standard for the practice of imaging in medicine. In the case of self referral, for example, you would be seen in a doctor's office and that doctor would recommend a study that is performed at the doctors office and possibly interpreted by the doctor who tells you the exam is necessary. This is usually the case for procedures such as Echocardiography and Nuclear Cardiac Imaging. Here, the physician or Cardiologist would collect the entire technical and professional fees for himself. In other settings, such as orthopedic offices, it is common practice to bid out the important Radiologist's interpretation of the cases to lowest bidder and only pay them a portion of the professional fee for the interpretation, pocketing the difference.
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  • July 2008
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  • Physician self-referral is a term describing the practice of a physician ordering tests on a patient and having them performed either by himself or by a facility from which he receives a financial incentive for the referral. There are many forms of self-referral.
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  • Physician self-referral
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