In our last newsletter, we informed you that the Attorney General’s Office of the State of Illinois had begun an investigation of imaging centers. Lease arrangements in which  physicians lease equipment on a discounted basis are among the arrangements presently being reviewed.  The Attorney General has now issued Subpoenas to both imaging centers and physicians who have leases at these centers.  It is possible that the information which is acquired may be used for proposed legislation.

        Commentators have indicated that it is generally believed that some physician referrals to imaging centers in which the physician has an ownership or lease arrangement may be unnecessary.  In fact, the Medicare Payment Advisory Commission concluded that a variety of leasing, employment or compensation arrangements are either illegal or need to be further regulated to prevent “financial incentives that may improperly influence a physician’s professional judgment.”
 
       California is considering requiring imaging centers or radiology offices, instead of a doctor, to bill insurers without paying a fee to the referring doctor.  In Florida, a statute took effect in July targeting doctors who serve as medical directors at investor owned imaging clinics.  Also in July, the Massachusetts Legislature directed the state inspector general to investigate improper referrals in the MRI market and suggest ways to combat abuse.

      Based upon what seems to be occurring nationally, it is possible that legislation affecting these relationships (or litigation in the event that fraud or abuse are believed to exist) may occur within the next year or two.  It is important that: (a) both imaging facilities and physicians referring patients to such facilities make sure that all referrals are proper and that true “at risk” relationships be created; and (2) patients are made aware of these financial relationships. If you would like to discuss these issues further or obtain guidance in structuring your own imaging relationships, please contact the Firm’s health care department.