The self-referral mills in St. Louis were not alone in their approach to skirting the Stark Laws. According to ArkansasBusiness.com, there is another such operation in Lowell, Arkansas. In similar fashion, Fayetteville MRI, running a strip mall operation called Clearvue Medical Imaging, also depends on self-referral of its investors, and keeps it legal by avoiding Medicare and Medicaid patients.
Arkansas Business got hold of a confidential memo, which
. . . indicates that Fayetteville MRI – led by four northwest Arkansas doctors – is seeking 50 physicians to invest a total of $5,000. It anticipates annual profits that would quickly exceed $2 million from a controversial business plan that relies on self-referral.
State and federal laws forbid self-referral to imaging centers that accept Medicare and Medicaid patients, so Fayetteville MRI will not accept patients insured by those government programs, the memo said.
The article goes on to name the names of the owners and shareholders of the operation. They are actually leasing an outpatient clinic from a radiologist!
Their attorney is none too happy about being "outed":
Tim Ezell, an attorney with Friday Eldredge & Clark LLP of Little Rock and who is representing Fayetteville MRI, wasn't happy that Arkansas Business obtained a copy of the private offering memorandum. It was mailed to the newspaper by an anonymous tipster identified only as "A Concerned Doctor."
"It's really troubling to me that the contents of this offering memo are out there for public consumption because it really is supposed to be confidential," he said.
And he was very quick to point out that his little project is just within the limits of legality:
Yup. When cornered, one of the physician-investors excused his actions:
Ezell also said the business model isn't violating kickback laws.
"Those kickback laws are applicable to situations where there are ... government health care beneficiaries involved, like Medicare and Medicaid," he said. "There are no government beneficiaries involved in the Fayetteville MRI transaction."
Oh, puhleeeese. I'll go back to an argument I made earlier. All doctors face this same pressure. We know for certain that the self-referrers order from two to eight times the number of scans of those who don't own their own equipment. So, I guess that not only are the less-well-endowed committing malpractice, but they must be more immune to lawsuits as well. Wow.
Brown, one of the investors in Fayetteville MRI, said what's driving up the health care costs are attorneys who file malpractice claims against doctors.
"We have to cover our butt on everything," Brown said. "We know we could be sued and they always are looking in retrospect what tests I do that are not needed for my clinical care."
So if he orders tests, it's to protect himself from plaintiffs' attorneys in the event of a lawsuit, he said.
"It's all to cover myself from lawyers," Brown said. "It has nothing to do with padding my pocketbook."
Three of the four St. Louis shops closed after receiving negative publicity. We'll see if the light of truth has the same effect in Arkansas.