Wall Street Journal Examines Referral Arrangements Between Doctors and Medical Imaging Centers

The Wall Street Journal on Monday examined "increasingly common" arrangements in which physicians contract with medical imaging centers to "structure referral deals as leases, under which physicians, each time they send over a patient, are renting the scan center's facilities and employees." Under the arrangements, the medical imaging centers charge physicians a flat rate per scan, and physicians can bill health insurers for the scans at the reimbursement rate in their area. According to the Journal, "Scanning centers are offering these contracts at a time when many doctors see their incomes under pressure from managed care and some are looking for new revenue." Under the arrangements, medical imaging centers ensure patient volume by "locking in usage" with physicians. However, according to some attorneys, the arrangements might violate federal and state laws on payment for referral and self-referral, and others maintain that the practice might lead to increased use of expensive medical procedures at a time when U.S. health care costs continue to rise. Under federal law, physicians cannot receive payment for referrals of Medicare or Medicaid beneficiaries, and 36 states have similar laws that apply to all patients. Some attorneys maintain that the arrangements between physicians and medical imaging centers "might be considered illegal inducement for referral," the Journal reports. In addition, federal law prohibits self-referral, a practice in which physicians refer patients to businesses in which they or relatives have a financial stake. However, the law makes an exception in cases in which physicians provide medical services to patients in their own offices. Some attorneys maintain that the arrangements with medical imaging centers "appear to be establishing a framework to argue that doctors' offices temporarily include the imaging center," the Journal reports. According to the Journal, the arrangements are "hard to detect" based on reimbursement claims. In addition, few physicians acknowledge their participation in the arrangements, and medical imaging centers that offer them "typically are reluctant to identify referring doctors," the Journal reports (Armstrong, Wall Street Journal, 5/2).