Maryland Court Upholds Self-Referral Ban

January 26, 2011

Maryland’s highest court ruled to uphold the state’s self-referral law - a major win for radiology professionals.

Maryland’s highest court ruled to uphold the state’s self-referral law - a major win for radiology professionals.

“It’s big, because it shows that the intent of the legislature was to control utilization and provide high quality [care],” said Alan Kaye, chair of the radiology department at Bridgeport Hospital, Yale New Have Health System in Bridgeport, Conn. “It’s a victory for radiology and for patients.”

The Maryland Court of Appeals this week affirmed a lower court ruling that bars physicians from referring patients for MRI, CT, and radiotherapy procedures conducted by someone in the same group practice.

In 2006, about a dozen physician groups filed a suit against the Maryland Board of Physicians, after the board rejected an in-group referral for an MRI ordered by an orthopedic surgeon. The group questioned whether the board erred in determining that it was an illegal self-referral and not included in the group exemption.

However, the court upheld the self-referral ban, and in the ruling noted that the intent of the law was to prevent self-referrals. The court determined that the state lawmakers intended for MRIs and CTs to be excluded from the in-office ancillary services exception. The state’s 1993 law was passed before the proliferation of high-end imaging in physician’s offices, but it was not enforced, Kaye said. Maryland is the only state to have such a law.

The American College of Radiology lauded the ruling, saying it’s a “major victory for quality patient care and patient choice.”

John Patti, MD, chair of the ACR Board of Chancellors, said in a statement that studies have shown that self-referral often results in unnecessary utilization of imaging, unwanted exposure, and increased costs. “The Maryland law is a model to which other states should look to - to maintain quality, curtail inappropriate utilization, and ensure that health care dollars are spent effectively,” he said.

The court also clarified the law’s “direct supervision” exception, requiring referring physicians to be present in the treatment area when the service is being performed, the ACR noted.

The American Society for Radiation Oncology also praised the ruling. CEO Laura Thevenot said in a statement, “We hope this decision will jump start congressional action to ensure that all Americans can make independent treatment decisions based on quality care, not perverse financial incentives.”

View the court opinion here.