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Why other states should adopt Maryland's law on doctor self-referrals

Sunday, February 13, 2011; 7:25 PM

DOCTORS ARE NOT permitted to sell the medicine they prescribe, and for an excellent reason: It would be a conflict of interest, creating financial incentive for physicians to peddle drugs of little or no benefit to patients. So why should doctors be allowed to both order and administer MRIs, CT scans and other high-tech procedures that may or may not be needed and useful?

The answer is, they shouldn't. But doctors are engaging in so-called self-referrals in dramatically greater numbers and reaping the financial rewards. They may be adding billions to medical costs in added insurance premiums and taxes.

There is substantial evidence that doctors who own scanners order excessive scans. In 2009 The Post's Shankar Vedantam recounted the case of Urological Associates, a medical practice on the Iowa-Illinois border treating kidney stones and other ailments for which scans are common diagnostic tools. In the months after the urologists purchased their own CT scanner, the number of scans they ordered soared by more than 700 percent. Academic and government studies suggest similar behavior across the country.

Orthopedists and other doctors, while acknowledging that some colleagues may profit from dubious or unneeded tests, argue that it's unfair to paint all physicians with the same brush. They say that it would be enormously inconvenient to patients, and inefficient for the medical system, to forbid doctors from performing such procedures in-house. And they point out that radiologists, who may recommend follow-up testing, are not immune from the profit motive.

But the simple fact is that self-referrals create a brazen temptation for abuse. In most cases, the added convenience for patients is slight because scans, unless in cases of urgent or emergency care, are not usually done immediately or even on the same day that a doctor orders one.

Just one state, Maryland, has had the foresight and gumption to prohibit doctors from reaping the rewards of these self-referrals. Lawmakers in Annapolis enacted the legislation in 1993, when few private practices could afford to buy such expensive equipment; when patients needed an MRI or CT scan, they were routinely sent to a radiologist. As a result, the state paid little attention to enforcing the law. Even after the state's attorney general and the Maryland Board of Physicians reaffirmed the law, it went unenforced by the state and mostly ignored by doctors.

That has to end. In the past several years, the law has been upheld by two state courts, including, most recently, the Court of Appeals, Maryland's highest tribunal. At this point, orthopedists and other physicians who engage in self-referral could lose their licenses.

Predictably, they are fighting back. Doctors are pushing a bill in Annapolis that would permit precisely the sort of self-referrals the courts have said are forbidden by the 1993 legislation. Similar legislation has died in previous years, but the stakes are now higher.

Lawmakers should not buckle to the doctors lobby. They should stick with the existing state ban on self-referral, which in fact should be a model for the nation.

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