Hospitals are able to make millions of dollars through referrals from their staff physicians, a practice that is not illegal. However, if there are financial incentives tied to the physician referrals to their patients, this violates federal law. If illegal incentives are in place, patients, insurers and employers end up footing the bill. Medxoom’s Comparison Shopping technology used prior to service can help patients reduce costs and improve quality by showing any tests or MRIs in hospitals are much more expensive than in free standing centers not in hospitals.
From Kaiser Health News:
“Hospitals are eager to get particular specialists on staff because they bring in business that can be highly profitable. But those efforts, if they involve unusually high salaries or other enticements, can violate federal anti-kickback laws.
Hospitals live and die by physician referrals. Doctors generate business each time they order a hospital procedure or test, decide that a patient needs to be admitted overnight or send patients to see a specialist at the hospital.
The problem, according to the government, is that the efforts run counter to federal self-referral bans and anti-kickback laws that are designed to prevent financial considerations from warping physicians’ clinical decisions. The Stark law prohibits a physician from referring patients for services in which the doctor has a financial interest. The federal anti-kickback statute bars hospitals from paying doctors for referrals. Together, these rules are intended to remove financial incentives that can lead doctors to order up extraneous tests and treatments that increase costs to Medicare and other insurers and expose patients to unnecessary risks.”