Maryland Court Upholds Regulatory Board Ruling on Self-Referral Law
A Maryland trial court has affirmed the state regulatory board’s interpretation of the Maryland self-referral law. The Maryland statute strictly limits CT, MR, and radiation therapy performed by self-referring physicians. In 2006, a coalition of orthopedic surgeons, urologists, and emergency physicians sued the State Board of Physicians, claiming that it misread how the law applied to various self-referral MRI arrangements. The board had determined that orthopedic surgeons and neurologists benefited financially from self-referring patients for MRI studies and failed to meet any exception to the self-referral ban. Therefore, the board ruled that such arrangements violated Maryland’s law, except for isolated cases involving referrals from employed physicians. Notably, the board concluded it did not find evidence that the in-office MRI studies benefited “patient convenience.”
Thoroughly reviewing the Maryland statute, the court focused on the board's interpretation of the law's three main exceptions. Those exceptions relate to “in-office ancillary services”; services provided within the same group practice as the referring practitioner; and services that the referring practitioner personally performs or directly supervises. First, the court agreed with the board’s determination that the “ancillary services” exception does not allow orthopedist referrals for MRI or CT scans because the “ancillary services” definition specifically excludes all physicians except radiologists from performing those scans. Second, the court concurred with the board that based on the whole law and its legislative history, a physician in a group practice only may refer a patient’s entire care to another group physician, not just for particular tests. Therefore, orthopedists may not refer patients for MRI or CT studies to their colleagues within the same group practice. Finally, the court accepted the board’s limitation of the “direct supervision” exception to referrals outside the group practice when the referring physician is “physically present” within the treatment area.
The orthopedists’ coalition already is appealing the court’s decision to an intermediate appellate court. ACR expected that appeal to occur, given the significance of the Maryland law and because the lower court agreed with the board’s position rather uniformly.