Self-Referral & Its Impact on Radiologists

With reimbursements crashing like avalanches and costs for medical services rising at the rate of King Kong climbing a skyscraper, health care professionals’ revenue situation is comparable to a bad horror movie.  The villain varies for many, but for Radiologists, that villain is undeniably, Self-Referral.


      Self-Referral is an issue since radiologists  do not refer patients for studies; rather they simply provide the interpretation of those studies, while other physicians have the opportunity to do both.  Unfortunately, some Physician’s end-up referring their patients to facilities he or she has financial interest in.  This is called Self Referral.  This interest ranges from full ownership of, partial investment in, or structured compensation arrangement with the facility that is performing the procedure.  This concept sounds like a great idea in theory, however it is considered a conflict of interest that has resulted in over-utilization of services and over-scans.  Referring doctors that own their own equipment simply use it more frequently, but combative marketing to help change this is on the rise. 

 It has become evident that self-referral is a problem because it has driven up health care costs and inspired a decline in reimbursements for the procedures, thanks to supply and demand.  Laws such as the Stark Law, have been enacted to control this issue, however exceptions have enabled physicians to find ways around the intent of the law.  The impact of this practice has affected Radiologists the most.  In order to limit self-referral, Medicare and insurances have wretched down payments to Radiologists.  Unfortunately, radiologists have little influence on referrals and the impact of cuts does little to slow self-referral.

Dr. Jayson Lord, one of Advanced Imaging Center’s onsite radiologists, commented on the issue stating, “It is a convoluted system that has really taken a beating on radiologists.”  Due to referring physicians’ practices attempting to keep patients in-house to increase their revenue, independent facilities (those that do not accept self referral) have seen a large decrease in volume. He says many self-referring facilities do not purchase high quality equipment and do not have the ability to update technology, which means patients are not receiving the highest quality care they deserve.  “Patients think they are getting a pretty great deal, they can get an appointment set almost immediately at a lower cost, but what they don’t know, is that they are not going to be getting the best reads if their scans have to be outsourced,” says Dr. Lord.

    It is also important to understand that physicians are essentially paid to order or perform tests and procedures, not to think about the most effective options.   Patients should be aware that this can sometimes lead to physicians finding themselves over-scanning and over-utilizing scans, ultimately costing the system more.  Insurance companies have combated self-referral by cutting the costs of services, so that they save money, but as in physics; for every action there is an opposite and equal reaction.  So, physicians simply order more and more, which only feeds the vicious cycle.  Hospitals and other practices will survive this challenge because they have other services to fall back on, unlike Radiologists who do not have reoccurring patients and varied services outside of diagnostic imaging.

“Self-Referral will eventually go away, as they can only cut costs for so long before centers will have to start closing their door,” says Dr. Lord.  However, the ramifications of the new health care system will eventually prevail over the self-referral villain, and the doors will open for new opportunities.  Until then, radiologists will continue to stress their ability to provide the highest quality care and services and hope that patients make the decisions that are best for them.

 Learn more about Self-Referral and The Stark Laws and what it means for you!