Physician Referral—the AMA View

REPRESENTATIVE Fortney Stark (D, Calif) has introduced HR 939 (HR 5198 in the 100th Congress), a bill that would prohibit, in most cases, Medicare payment for services provided by any entity in which the referring physician or an immediate family member of the referring physician has an ownership interest. The legislation is based on the premise that a physician with an ownership interest in a facility will be less likely to exercise independent judgment in making referrals and that the physician may tend to overutilize the facility.

Several steps have already been taken to address these possible professional conflicts. Under the Medicare Catastrophic Coverage Act of 1988 (Public Law No. 100-360), Medicare payment for services by a provider of home intravenous therapy services is prohibited when a referral is made by a physician with an ownership interest in the provider of intravenous therapy. Public Law No. 100-360 also required the