Md. versus Stark: Different exceptions, different results

The federal Stark Law and the Maryland self-referral law have one key difference: Unlike the Stark Law, the Maryland law specifies which modalities meet the in-office ancillary imaging exception (IOAE). Quadri et al explore the implications of that key point of differentiation and its impact on results, in the latest issue of the Journal of the American College of Radiology.

The authors point out that the Stark laws were expanded in 1993 to regulate physician referrals to self- or family-owned imaging equipment, introducing the IOAE with the intention that in-office radiography and sonography could continue to be performed. The law did not contain language that limited in-office imaging to those modalities, however.

The Maryland law was drafted in 1992 in response to the efforts of a national organization to promote imaging self-referral and an increase in the number of self-referred MRI billed to third-party payors. Although evidence was introduced showing that 38% of self-referred MRI scans was inappropriate, the bill failed to pass.

Reintroduced the following year, the bill became law in 1993. It also included an IOAE, but specifically defined ancillary services as radiography and sonography. Language was included that specifically excluded MRI, CT and radiation therapy services from that Maryland’s IOAE. A number of other “intricate” cross- and self-referral patterns were prohibited as well.

Although the law gave the state the power to impose fines and revoke the licenses of violators, it remained dormant until complaints were made in 2004, resulting in sanctions by the attorney general against the violators. As a result, a number of nonradiology practices formed a lobby group called the Maryland Patient Care and Access Group and began pushing back.

There ensued a series of legal cases in which both sides had wins and losses, culminating in a ruling in 2011 by the state’s highest court, the Court of Appeals, upholding previous interpretations of the law that MRI, CT, and radiation therapy services were non-exempt under the IOAE.

Subsequently, the Maryland Board of Physicians issued an enforcement plan, outlining educational resources, important rulings and legal clarifications. A two-year period of consistent enforcement of the law followed, but in 2013, the issued an order allowing a urology practice to continue to provide radiation therapy services to patients provided it hired no more than four radiation oncologists.

On the legislative front, a series of legislative challenges began in 2007, with the introduction of new self-referral laws with fewer strictures on self referral for imaging services, but none have gained much traction.

In conclusion, the authors refer to the Maryland law as “a landmark piece of legislation that might steer U.S. healthcare legislation away from broad cuts to imaging reimbursement and toward regulating specific excesses in healthcare spending.”

They point to House Resolution 2914, a proposed amendment to exclude advanced imaging from the Stark IOAE, which the Congressional Budget Office projects would generate $1.4 billion in savings over 10 years.