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Ann Thorac Surg 2001;72:3-5
© 2001 The Society of Thoracic Surgeons
Address reprint requests to Dr Sanderson, 5540 Circulo Terra, Tucson, AZ 85750
e-mail: rgsanderson{at}compuserve.com
During the past year, the Standards and Ethics Committee has received a variety of pertinent and thought-provoking communications from STS members about ethical concerns regarding their relationships with referring cardiologists. This editorial reflects the committee’s deliberations on these issues.
The most common concern is the invitation by a large group of cardiologists for one or more cardiac surgeons to join their practice, many times under the expressed or implied threat of withholding surgical referrals if the invitation is not accepted. Thoughtful members asked a number of questions related to the conflict of interest raised by this practice: Is retaining and distributing a portion of the surgeons’ fees to the associate cardiologists the equivalent of fee splitting? Is trading the security of a referral base for negotiated compensation ethically acceptable? Does the employment arrangement cause surgeons to lose their perspective as practitioners and patient advocates? Does the arrangement adversely affect the surgeons’ decision-making process?
A second ethical concern is the practice of the cardiologists’ taking over the care of postoperative patients for financial reimbursement purposes, whether the involved cardiac surgeons are employed by cardiologists or are independent practitioners. Finally, great concern was expressed about situations in which cardiologists from all over the country directly ask cardiac surgeons to share income in exchange for continued referrals.
These aforementioned scenarios are just three current examples of problematic intraprofessional relations; undoubtedly others will surface in the future. They raise ethical concerns as well as questions of legality under applicable federal or state statutes.
Background
In today’s medical marketplace, there is a growing number of employment and reimbursement arrangements. The current trend is to shift away from independent private practice to group practice, frequently in a multispecialty setting in which surgeons are salaried from shared revenues. In academic university practice, a surgeon is often a full-time salaried member of a large group practice plan.
At first glance, cardiac surgeons employed by a group of cardiologists may appear no different from being employed by a group of surgeons or a mixed group of practitioners. However, because referral of cardiac surgical patients is almost exclusively from cardiologists, and often from only a small number of them, cardiac surgeons are more vulnerable than other surgical specialists. Further, inasmuch as these two subspecialties offer competing "revascularization services," the interrelationships may be unusually sensitive.
Ethical concerns
Patients are uniquely vulnerable in medical matters, not only because of the illness itself but also because of their relative lack of knowledge, particularly in high-risk, complex situations such as cardiac surgery. Physicians thereby assume obligations to serve as moral fiduciaries, above all protecting and promoting the patients’ best interests. These obligations are of paramount importance in the relationships between cardiac surgeons and cardiologists.
In a scholarly discussion of conflicts of interest, Khushf and Gifford [1] observe that "certain types of financial arrangements have long been frowned upon by the medical profession... . The reason generally given ... was that financial arrangements were inappropriately introduced into a decision-making process that should be exclusively directed by medical factors... . These arrangements are now addressed under the rubric of conflicts of interest." They define a conflict of interest as "a situation in which the self-interest of an individual is in tension with an obligation. In medicine, the classic conflict takes place when a physician’s financial self-interest motivates behavior that is contrary to the needs and interests of a patient" [2]. In general, managing conflicts of interest is best accomplished by avoiding situations of conflict or disclosing them when they are unavoidable.
In relationships with cardiologists, there are inherent potential conflicts of interest, which are not necessarily wrong or reprehensible. However, the surgeons’ primary obligations in these contexts are to serve the best interests of the patients, above those of groups, institutions, and self-interests.
If employment inhibits surgeons from freely making appropriate decisions that they feel are in the patients’ best interest, or if they defer to the cardiologist employer’s opinions and desires because of fear for their own employment and financial security, financial interests are clearly in conflict with the surgeons’ primary obligation to their patients. In addition, patients’ interests may not be adequately protected from the subtle overutilization of services that can occur within the closed group, a practice termed "physician-induced demand." An example from everyday practice is the issue of whether an angioplasty-stent procedure in preparation for planned surgical revascularization is chosen because it is in the patient’s best interest, or to increase the number of compensable interventions.
Legal issues
The Stark Self-Referral Law (Chapter 42, United States Code section 1395 nn) prohibits referrals by a physician for "designated health services" covered by Medicare or Medicaid to entities in which the physician has a financial relationship (broadly defined as an ownership interest or compensation agreement). This law is mostly directed at clinical laboratory, physical therapy, occupational therapy, home health services, outpatient prescription drugs, and so forth, and does not cover most personal physician services. The Stark statute carries civil penalties of up to $15,000 per violation, up to $100,000 for participating in a scheme to circumvent its prohibitions, and potential exclusion from Medicare and Medicaid.
The Medicare-Medicaid Anti-Kickback Statute (Chapter 42, United States Code Section 1320a–7b(b) prohibits individuals or entities from knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare or Medicaid. The law has been interpreted to cover any arrangement in which one purpose of the remuneration is to induce or compensate for program referrals. Although the Office of the Inspector General has identified specific types of practices that are not subject to enforcement actions (the so-called safe harbors), giving or soliciting anything "of value" in consideration for referrals potentially can be treated as remuneration for purposes of antikickback analysis. However, the Office of the Inspector General has stated that referrals within a group practice do not necessarily invoke the antikickback regulations. Violation of this statute is a felony offense carrying criminal fines of up to $25,000 per violation, imprisonment for up to 5 years, civil monetary penalties up to $50,000 per violation, and exclusion from government health-care programs.
State Self-Referral and Anti-Kickback Laws. Many states have passed laws analogous to the Stark and antikickback federal statutes, and they typically apply to all payers, not just Medicare and Medicaid.
Applications
1. In the situations in which cardiac surgeons are invited or "coerced" to join cardiologists in their practice, surgeons need to be critically cautious that potential conflicts of interest do not become actual conflicts. Their primary obligation is to serve the best interests of their patients. Accepting less than fair market value for surgical services, disproportionately increasing overhead allocations to surgeons, and excessively redistributing income to cardiologist-employers for practice administration are unfair practices that could constitute violations of federal and state antikickback laws, but do not directly put patients’ interests at risk.
Surgeons considering joining cardiology practices should first ensure that they are compatible with the group’s views of high-quality patient care and the role of surgical intervention. Then, contracts should be carefully evaluated to make sure that:
In contractual arrangements with cardiologists, the Stark law does not apply. However, the federal antikickback statute may come into play, as it applies to all services covered by Medicare and Medicaid, not just "designated health services." One consideration is whether or not the surgeons are giving "something of value" to the cardiologists. Is relinquishing the intangible value of independence for ongoing referrals "of value"? One contention may be that the cardiologists get the benefit of the surgeons’ undivided attention and loyalty, and the opportunity to market in-house surgical expertise to exclude surgical referrals from competing cardiologist groups. Remuneration to cardiologists is more tangible if the cardiologists are offering to compensate surgeons at a level less than fair market value (ie, below market salary if the surgeons are employees, discounted fee schedule if the surgeons are independent contractors, or an offer to buy into the cardiology practice as partners or shareholders on terms that are less favorable than those that apply to cardiologists). In these circumstances, the Office of the Inspector General likely will consider these arrangements suspicious or possibly illegal under the antikickback statute.
There are, however, safe harbors that come into play. First is the safe harbor for personal services and management contracts, in which total compensation must be consistent with fair market value without taking into account the volume or value of Medicare or Medicaid referrals or other business generated between the parties. If the surgeons’ contracts provide for below market rates for their services, this safe harbor would not be protective, but establishing fair market value might prove very difficult. Second is the safe harbor protecting payments to bona fide employees, which do not necessarily require consistency with fair market value. This exception arguably would not apply to a coercive offer to join the practice in exchange for the surgeons’ agreeing to give up their independence. Proving the intent to obtain a portion of the surgeons’ professional fees would be difficult.
Because of the legal complexities and the subtleties of these contracts, cardiac surgeons would be well advised to seek legal consultation before agreeing to or signing them.
2. In the scenarios in which cardiologists take over the care of postoperative patients, the ethical focus is on the question of intent. Is the situation based on providing improved patient care (ethically acceptable) or is it designed, at least in part, to subjugate medical decision-making and to reapportion reimbursements away from the surgeons to their cardiologists (ethically unacceptable)? Intent, however, is difficult to prove. Only the involved specialists can delineate the intent and appropriately choose a course of action dictated by the patient’s best interests.
Although the Stark law does not apply to personal physician services, the federal antikickback statute may be applicable. Government payments to surgeons for their postoperative care comprise a very significant portion of their global surgical fees, and duplication or sharing of those postoperative surgical charges are inappropriate. Consultations requested by the cardiac surgeons for specific cardiologic (or other specialty) problems are always suitable.
3. Requesting money in exchange for a commitment to refer patients is clearly fee splitting, and contravenes the American Medical Association Code of Medical Ethics [3] and the American College of Surgeons Statement on Principles. [4] Although the Stark law probably does not apply, this practice is illegal, and federal and state antikickback statutes indicate that both the referring cardiologist and the surgeon are potentially liable for criminal or civil penalties.
Conclusions
Ethical concerns in relationships with cardiologists are seldom clear-cut, and numerous variables frequently affect the viewpoints of all participants. Surgeons must address the conflicts of interest arising from employment agreements and honor their obligations to function as fiduciaries for their patients. These obligations may be less evident to surgeons who have recently completed training programs and who may not have had opportunities, through practical experience, to develop meaningful attitudes for patient advocacy.
The concepts of patient care and patient advocacy, which are the central and most cherished tenets of the surgeon’s creed, must remain foremost as guiding principles in these relationships, as they should with all aspects of a surgeon’s practice.
Optimal resolution of these issues between cardiac surgeons and cardiologists is best made by forthright and reasoned discussions between the two subspecialties (not by third parties) that result in guidelines and policies based on ethical principles agreed to by both groups.
Acknowledgments
The author expresses his sincere appreciation to the Cardiology Relations Subcommittee (Drs T. Egan, S. Nolan, W. Sasser) and the STS Legal Counsel (Jenner & Block) for providing the foundation for this editorial, and to Drs R. Sade and M. McKneally for their invaluable editorial assistance.
References
This article has been cited by other articles:
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  P. Bajona Hybrid Cardiac Surgery: A Resident's Perspective Arch Surg, March 1, 2009; 144(3): 207 - 208. [Full Text] [PDF]
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 K. V. Arom and F. L. Grover Adult cardiac surgery during the first 50 years of the Southern Thoracic Surgical Association Ann. Thorac. Surg., November 1, 2003; 76(90050): S17 - 46. [Abstract] [Full Text] [PDF]
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J. M. Matloff The practice of medicine in the year 2010: revisited in 2001 Ann. Thorac. Surg., October 1, 2001; 72(4): 1105 - 1112. [Full Text] [PDF]
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