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More Q & A On Medical Magnets

The Maryland Self-Referral law prohibits health care providers, including physicians, from referring patients to a health care entity in which the referring provider has a financial interest.
There are several exceptions to this broad prohibition, including the "group practice" exception, whereby referrals within a group practice are permitted, the "in-office ancillary" exception, whereby referrals for ancillary services that are provided in a physician's office are permitted, and the "direct supervision" exception, whereby referrals for services that are directly supervised by the referring physician are also permitted.
In January, 2004, the Maryland Attorney General issued an Opinion that referrals for MRI services could not qualify for the "in-office ancillary" exception to the Maryland Self-Referral law, unless the office was operated exclusively by radiologists. In an amendment to that opinion, the Attorney General added a footnote that MRI services also could not be protected by the "group practice" exception, unless the group practice consisted only of radiologists. (Implicitly, the Opinion also applies to CT scans and to the provision of radiation therapy.)
Recently, the Circuit Court for Montgomery County, in the case of Duys v. Orthopaedic Associates, P.A. addressed the application of the "direct supervision" exception to an MRI owned by a non-radiology group practice.
Q: What did the Duys case hold?
A: In Duys, a non-radiology group practice was sued by a patient for having referred the patient for an MRI scan provided in the group practice's office. The referring doctor argued that the referral was allowed under the Maryland Self-Referral law by reason of the "direct supervision" exception, and the court agreed. Accordingly, there is now authority that referrals by a non-radiologist qualify for the "direct supervision" exception to the Maryland Self-Referral law.
Q: What does "direct supervision" mean?
A: The applicable standard is not hard to meet. In fact, the underlying statute specifically states that "direct supervision" means the referring health care practitioner must be: present on the premises where the health care services are provided; and available for consultation within the treatment area. Therefore, a non-radiologist might now choose to refer patients to obtain an MRI scan from the non-radiologist's group practice, but only when the non-radiologist will be on-premises during the scan.
Q: Are other courts, as well as the Maryland Board of Physicians, required to follow the Duys decision?
A: No. Decisions of a Maryland Circuit Court are not binding on other Maryland courts, or on the Maryland Board of Physicians. Only the decisions of Maryland's "appellate" courts are binding on other courts or on the Board of Physicians. Nevertheless, the Duys decision may prove to be persuasive in these other settings.
Q: Is the Duys decision correct?
A: Probably yes. The Maryland Self-Referral law provides an exception for referrals for services that are personally performed by, or "under the direct supervision" of the referring health care practitioner. Therefore, so long as the referring physician is present in the building, and available for consultation when the magnet is used, then under Maryland law such a physician should be able to refer a patient for such MRI services.
Q: Did the Attorney General's Opinion address the direct supervision exception?
A: No. The Attorney General's Opinion did not address the direct supervision exception. However, it is possible that, if asked, the Attorney General might conclude that the direct supervision exception is not available for MRI or CT scans or radiation therapy services, notwithstanding that the judge in Duys believes otherwise.
Q: Is the direct supervision exception available for both technical and professional billing?
A: Yes. If the referring physician is present on the same premises where the magnet is being used, during the time the technicians are operating the magnet, and the referring physician is available for consultation at that time, then the referring physician or his or her group practice should be able to bill for the technical portion of the MRI service. Likewise, if the referring physician performs the interpretation of images himself or herself, or if he or she is present and available for consultation at the time the interpretations are being performed, then the referring physician or his or her group practice should be able to bill for the professional component of the MRI service. However, if the images are sent off-site for interpretation, then the professional component of the MRI bill would not qualify for the direct supervision exception, and could not be billed by the referring doctor or his or her group practice. Similarly, if a radiologist interprets the scans on-site, but does so when the referring physician is not on-site, then the professional component of the MRI bill would not qualify for the direct supervision exception, and could not be billed by the referring doctor or his or her group practice.
Q: May a referring physician who owns a magnet use the direct supervision exception when one of the referring physician's partners, but not the referring physician, supervises the scan?
A: Probably not. The "direct supervision" exception applies only to services that are personally performed by, or that are under the direct supervision of, the referring health care practitioner. No exception is made for referrals for services under the supervision of a partner of the referring health care practitioner. However, while the Maryland Attorney General disagrees, a court could conclude that such an arrangement qualifies for the "group practice" exception to the Maryland Self-Referral law.
Q: Are there other exceptions to the Maryland Self-Referral law that may be applicable?
A: Yes, for instance, the employment exception allows a physician to refer patients to a health care entity, and vice versa, when the physician is a bona fide employee of the health care entity. The Attorney General's Opinion did not address whether this exception may or may not be used with respect to MRIs, nor has any Maryland court issued an opinion on this question. However, it is likely that the employment exception, like the direct supervision exception, is available for MRI and CT scans and for radiation therapy. It is also possible that, if asked, the Attorney General might conclude otherwise.
Q: May the "owners" of a group practice use the employment exception to refer patients to an MRI or CT owned by the group, or refer patients for radiation therapy provided by the group?
A: No. The Maryland Self-referral law prohibits health care providers from referring patients to a health care entity which they own or with which they have a compensation relationship. The employment exception is only an exception to the compensation prohibition. It cannot be used to protect an "owner" of a practice. Therefore, while owners of a practice who wish to comply with the Attorney General's Opinion should not refer patients to the practice's MRI or CT, or for radiation therapy provided by the group, unless they are directly supervising those activities, the employment exception likely allows "non-owner" employees of the practice to make such referrals, whether or not such non-owner employees are on the premises during such activities.

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Date

09.23.05

Type

Publications

Authors

Rosen, Barry F.

Teams

Health Care