Self-Referral in California

The conflict of interest posed by self-referral has been an issue for radiology for quite a while. Organized radiology has attempted multiple times to raise awareness of self-referral both at the state and federal levels. Efforts have been thwarted by most of the rest of medicine aligned against any limitations. The gold standard remains the Maryland legislation which bans the practice.

Self-referral legislative consideration has once again come to the fore. The latest Congressional Budget Office score estimates a $3.4 billion savings if the In Office Ancillary Service Exclusion (IOASE) loophole is closed. The Government Accounting Office has recently produced relatively scathing reports of self-referral abuses with advanced imaging services, pathology and GI. A report on physical therapy is due soon.

Now, California is considering self-referral legislation. Senate Bill 1215 would remove the exception for advanced imaging, anatomic pathology, radiation therapy and physical therapy.

Both the California Radiological Association and the American College of Radiology support the legislation. Several large trade unions, health care payers and other stakeholders are also behind the bill. This is still an uphill battle. Most other physicians and many other special interests are lining up to defeat the effort.

Eliminating the IOASE could be considered as a “pay for” in the SGR permanent reform debate that should take place at the end of this year. The politics seem to make it improbable.

As always, we will keep you informed.

Howard B. Fleishon, MD, MMM, FACR

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