'Self-referral' ban supported


March 09, 1992|By David Conn | David Conn,Annapolis Bureau

ANNAPOLIS -- When a trade association turns 180 degrees on an important issue, there's a legislative axiom that usually helps point to the reason: "Follow the money."

Case in point: The state physicians association, known as Med-Chi, is one of the strongest supporters this year of a bill to prohibit doctors from referring patients to medical facilities in which the doctor has a financial interest. Referrals would be allowed in those cases only if the physician actively participates in running the facility.

The rationale is that studies show utilization of medical services is dramatically higher among such "self-referring physicians." The U.S. Health and Human Services Department reported in 1989 that those doctors sent patients to clinical labs for testing at a 45 percent higher rate than physicians who had no stake in the labs.

Insurers, consumers and business groups have long been in favor of the referral prohibition. Last year, they managed to get a bill passed requiring disclosure of the physician's financial interest.

What's curious is that the physicians group now has become the bill's strongest booster. What's especially curious is that only two years ago Med-Chi worked to defeat a similar bill, and then worked to defeat the bill's sponsor, former Del. William A. Clark of Harford County.

"Gerry Evans and Med-Chi spent literally tens of thousands of dollars to have me defeated two years ago because of that bill," Mr. Clark said last week, referring to Med-Chi's lobbyist, Gerard Evans.

"Now they're sponsoring it," he said. "Imagine that!"

Why the switch? According to J. David Nagel, president of the Medical and Chirurgical Faculty of Maryland: "We have studied this . . . and we needed time to find out where the right answers are. It's time, and I think Med-Chi has demonstrated that we are more than willing" to help cut health care costs, he explained to the House Environmental Matters Committee last week.

Another possible answer is the recent arrival in Maryland of a company called Radiation Care Inc.

Based in Atlanta, RCI in the past few years has established 16 radiology clinics in nine states. The company has expanded rapidly by building new facilities with some financing from local physicians, who then become a reliable source of patients for the new clinics.

RCI ultimately buys the facilities or buys existing ones from physician groups. The doctors typically are paid in company stock. RCI bought a College Park radiology clinic from a group of Maryland physicians about a year ago, and a Rockville Radiation Care clinic is due to open this spring.

"I'm concerned about a 'Radiation-Care-on-every-corner' mentality," said House Environmental Matters Committee Chairman Ronald A. Guns, D-Cecil, a co-sponsor of the bill.

Apparently so is Med-Chi. An out-of-state powerhouse like RCI threatens to undercut existing radiology clinics -- which, incidentally, are operated by Med-Chi member radiologists -- and send some profits out of Maryland.

A ban on self-referrals would cause less harm to existing facilities, even those whose investors are referring physicians, than to RCI. That's because RCI more heavily relies on the promise of "self-referred patients" in order to convince investors to put up the money to build new clinics.

Without the threat of RCI, or any other chain, the owners and operators of existing facilities could breathe easier, even without the ability to self-refer patients.

To its credit, Med-Chi was also moved by a policy decision made last year by a body of the American Medical Association, which condemned physician "self-referrals" unless there's a demonstrated need for the facility in the community.

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