Physician Self-referral

Physician self-referral is a term describing the practice of a physician ordering tests on a patient and that are performed by either the referring physician himself or a fellow faculty member from whom he receives financial compensation in return for the referral. Examples of self-referral include an internist performing an EKG, a surgeon suggesting an operation that he himself would perform, and a physician ordering imaging tests that would be done at a facility he owns or leases.

The ability to self-refer is an incentive for physicians to order more tests than they otherwise might. In the United States, the Stark Law (specifically sections I and II) was designed to control self-referrals. However, the exceptions designed to allow necessary testing in physicians' offices have been exploited to circumvent the law. The in-office exception, which allows testing on equipment in the physician's office, has resulted in many physicians purchasing high-tech and expensive equipment such as CT scanners, MRI scanners, and nuclear scanners for their own offices.

The incentive for this practice is largely the result of rapidly declining reimbursements for what has been termed "cognitive" physician care, i.e. the time spent talking to a patient and determining what course of diagnostic testing or treatment would be best.