Physician Self-Referral

In general, physicians should not refer patients to a health care facility that is outside their office practice and at which they do not directly provide care or services when they have a financial interest in that facility. Physicians who enter into legally permissible contractual relationships—including acquisition of ownership or investment interests in health facilities, products, or equipment; or contracts for service in group practices—are expected to uphold their responsibilities to patients first. 

When physicians enter into arrangements that provide opportunities for self-referral they must: 

1. Ensure that referrals are based on objective, medically relevant criteria.  
2. Ensure that the arrangement: 
   1. is structured to enhance access to appropriate, high quality health care services or products; and 
   2. within the constraints of applicable law: 
      1. does not require physician-owners/investors to make referrals to the entity or otherwise generate revenues as a condition of participation; 
      2. does not prohibit physician-owners/investors from participating in or referring patients to competing facilities or services; and 
      3. adheres to fair business practices vis-à-vis the medical professional community—for example, by ensuring that the arrangement does not prohibit investment by nonreferring physicians. 
3. Take steps to mitigate conflicts of interest, including: 
   1. ensuring that financial benefit is not dependent on the physician-owner/investor’s volume of referrals for services or sales of products; 
   2. establishing mechanisms for utilization review to monitor referral practices; and 
   3. identifying or if possible making alternate arrangements for care of the patient when conflicts cannot be appropriately managed/mitigated. 
4. Disclose their financial interest in the facility, product, or equipment to patients; inform them of available alternatives for referral; and assure them that their ongoing care is not conditioned on accepting the recommended referral.