You might think this little Ponzi scheme violates the Stark laws, and you would be correct, except for one minor detail:
Here's how Bowman's clinics work: After being evaluated by a board of directors, physicians who want to join make an investment that varies by location, Bowman said. He declined to provide details.
To remain investors, physicians must earn 75 "participation units" throughout the quarter. An MRI counts as three participation units. A CT scan counts as two. Then, the profits are split equally among the investors, he said. Physicians can miss the target for one quarter before being asked to relinquish their ownerships.
Bowman said the referral requirements ensured everyone's contributing to the center's being a success. . .
The referral requirements are so low, 25 to 50 patients a quarter, that physicians do not feel pressured to prescribe tests unnecessarily, Bowman and Schwarze said. And, profits earned are too small to tempt physicians to risk their livelihoods for a bump in income, they said.
Bowman isn't worried about the appearances:
The Stark law was named after its sponsor, U.S. Rep. Pete Stark, D-Calif., and was designed to protect patients and limit health care spending. It bars a physician from referring patients to a diagnostic center in which the doctor has a financial interest when the patient's care is paid for by the federal government through such programs as Medicare.
At least two dozen states have extended similar laws to cover all patients, but Missouri has not. Because the clinic Schwarze invested in declines to care for patients in federal programs, it is not covered by the Stark law.
"We assume people are honest. I don't know another way to do it," Bowman said. "I don't think a doctor is going to risk his whole career to manufacture an MRI."Honest. Riiiiiiight. Just ask Dr. Jean Mitchell from Georgetown, who has written extensively about self-referral:
Neither have I.
"There's no other business where you can control demand and supply," Mitchell said. "This is guaranteed success. It's a cash cow."
She sees Bowman's clinics as even more questionable because they require physicians to refer a certain number of patients to maintain their investment.
"I've never seen anything so blatant as this," said Mitchell, a health economist.
If you happen to be in St. Louis, and your doctor sends you to Reliable Imaging of St. Louis in West County, Lynn Haven Imaging in Hazelwood, Cedar Plaza Imaging in South County or Boone's Crossing Imaging in the Chesterfield Valley for imaging, look him or her in the eye and ask how much he or she will be making from the referral. Then consider finding another doctor.