AMA Sets Ethical Standard for Physician Self-Referral

By Emily P. Walker, Washington Correspondent, MedPage Today

ORLANDO, Nov. 11 — It is unethical for physicians to self-refer to facilities where they have a financial stake unless they spell it all out to their patients, according to an opinion adopted this week by the American Medical Association’s policy-making House of Delegates.

The opinion emerged from the AMA’s Council on Ethical and Judicial Affairs (CEJA), chaired by Regina M. Benjamin, M.D., M.B.A., of the Bayou La Batre (Ala.) Rural Health Clinic.

It said that while business arrangements among physicians can benefit patients, they also “can be ethically challenging when they create opportunities for self-referral in which patients’ medical interests can be in tension with the physicians’ financial interests.”

Transparency is vital to keeping these relationships ethical, said Dr. Benjamin, a family physician.

William Dolan, M.D., Rochester, N.Y., an orthopedic surgeon and a member of the AMA’s board of trustees, agreed that a physician “must tell the patient what his or her interest is” in order for self-referral to be ethical.

“The main thing when you talk about self-referral is that you’re transparent. You let your patients know you have a financial interest,” said Dr. Benjamin. “You also make sure the patient’s interest is the first interest…and not your financial interest,” she said.

By law, physicians cannot be a part of a self-referral agreement to a facility that requires the physician to refer patients as a condition of participation in the agreement, or one that prohibits the physician from referring patients to outside facilities.

The CEJA report instructs physicians to disclose to their patients any financial interest in the facility, product, or equipment, which is consistent with the law. The ethics guideline goes a bit further and advises physicians to “assure [patients] that their ongoing care is not conditioned on accepting the recommending referral.”

“This will protect patients from physicians who refer to only their self-owned facilities,” said Dr. Dolan. “The patient can trust the physician that he or she is doing the best thing for the patient.”

The 1972 federal Anti-Kickback Statute and the 1989 “Stark Law” prohibits physicians from receiving anything of value from referring patients to other facilities.

But a safe harbor in such arrangements allows physicians who refer to receive other ancillary services in their office, and certain leasing arrangements in multi-specialty groups also satisfy the safe harbor requirements. Physicians may also refer patients to ambulatory centers and even hospitals in which they have a stake, so long as the patient referral would benefit the whole hospital, and not just the portion in which the physician is invested.

The House voted to refer back for more consideration a CEJA opinion on the ethics of secret shoppers-covert actors who pretend to be patients to gauge quality of care and customer service.

While secret shoppers have been used for years in other service industries, such as restaurants, the practice is relatively new in medicine. Generally, the secret shoppers are deployed by a health care center or hospital to make sure the patient experience is satisfactory.

The CEJA opinion outlined an ethical manner in which to use secret shoppers. It would have found the practice ethical if physicians were alerted in advance that their office or hospital would be “shopped,” and if physicians were given a choice to opt out of the exercise.

Physicians debating the issue at a reference committee hearing were largely critical of the practice of secret shoppers, and said that their use “is a deceptive practice” and “takes valuable resources away from patients, especially in emergency department settings.”

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