Is It Ethical to Pressure Physicians to Refer In-House?

Leigh Page


May 21, 2019

In This Article

To See Some Specialists, 'You Have to Beg'

Another time, Buchanan says he referred a patient to an internist in a large system. Without consulting Buchanan, the internist referred the patient to a system-based specialist for a sleep study, ignoring a local sleep specialist. Buchanan found out what happened only when the patient was back home again.

At the same time, notes Buchanan, when hospitals have an in-house specialist in a rare field, it can be very hard for his patients to see that doctor. He feels that in-house PCPs seem to have first dibs. "You have to beg and you have to send more documents in," he says, "and then your patients have to wait for weeks."

Independent Specialists Also Feel the Heat

When hospitals buy up primary care practices, independent specialists often see referrals fall off, says Steven G. Lester, MD, a radiation oncologist in Orlando, Florida.

Hospitals may sometimes close a clinical department, which means dropping the independent specialists in it and sending all of the patients to employed specialists, says Lester. "They might point to quality considerations or the need for 24-7 coverage, but if this is the reason, why aren't all departments closed?" The real reason, he believes, is that the hospital simply wants to channel business to its own employed specialists.

In another twist, independent specialists may still get referrals from hospital-employed doctors, but these may be patients that the hospital doesn't want, wrote a vascular surgeon commenting on a Medscape article in 2014.[3]

"I personally found that my 'bread and butter' cases dried up, but I saw an increase in referral of difficult, unusual, and high-risk cases," he wrote. "While I took that as a compliment, it did increase my workload substantially at a time when I wanted to cut back."

Sometimes hospitals' goals are different from those of independent specialists on staff, says Erik Nilssen, MD, an orthopedic surgeon in Pensacola, Florida.

When he was renting space in a physician's office building owned by a local hospital, Nilssen began installing imaging equipment to help his patients. First he put in an x-ray machine, then a CT scanner. However, when he installed an MRI machine, difficulties arose, he says.

The MRI—that's their baby, and I was charging much lower rates.

"The MRI—that's their baby, and I was charging much lower rates," he says. "The hospital changed my locks. I couldn't get into my suite, so I called the police," Nilssen says.

"It got nasty," he recalls. "The hospital ended up suing me." Nilssen left the ambulatory surgery center and joined an independent one. The lawsuit was settled after Nilssen agreed to move out of the office building. Since then, he says, his volume of surgeries has rebounded, and he's glad he broke with the hospital.

Do Competing Referral Networks Divide Care?

When hospitals direct more referrals in-house, it creates two or more separate referral networks in the community. There can even be three or more separate networks in areas with several competing hospitals, each with its own employed physicians.

In these scenarios, while hospital-employed physicians are directed to refer within the hospital network, independent PCPs want to refer to independent specialists because "they're afraid that the hospital will take their patients away," Lester says.

Under the federal Stark Law, hospitals can't stop patients from crossing these referral barriers and going to a competing network for care.[4] However, most patients are said to be unaware of the law and generally go where their physicians want them to go.

If a certain referral network doesn't have enough doctors in a particular specialty, patients within the system may have to settle for a less-qualified physician, according to Keith Smith, MD, an anesthesiologist who is managing partner of the Surgery Center of Oklahoma in Oklahoma City.

He recalls that a child with hip dysplasia went to a large hospital ED and was seen by an independent orthopedic surgeon on call there. The orthopedic surgeon determined that the best orthopedic specialists to treat the child were two independent doctors, but the hospital preferred to use an orthopedic surgeon in the system, Smith says.


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