20 June, 2004, Los Angeles Times: Clinics Find Surgery Scam Pays


An article entitled "Clinics Find Surgery Scam Pays" was written by Christine Hanley. It supports my notion that privately owned surgery centers represent a major conflict of interest. Southern California surgery centers allegedly have been paying patients and giving them incentives to undergo unnecessary surgery. The centers are sending inflated claims to the private insurance companies. The scam has been estimated to cost the insurance companies at least $500 million in the past few years. The investigation is focused on finding the architects of the plan. My suspicion is that these centers are part owned by doctors which represents a conflict of interest as they are rewarded by dividends from their ownership in the centers. The more cases they do, the more profitable they become and more dividends go into the owners and doctor's pockets. This most likely has driven the doctors, adminstrators and others to collaborate in a scheme to simply make more money. If you want to read the entire article I would recommend going to your public library as the LA Times charges one dollar for one to read archived articles. It is an interesting and well written article.

1 July, 2004, CMS Will Apply Stark Ban to Physician Investments in Specialty Hospitals

The following is a summary of the GAO Press Release. This article supports my thoughts that doctor-owned centers represent a major conflict of interest. This ban would prohibit doctors from referring patients to specialty hospitals in which they have an ownership. Specialty hospitals focus on one aspect of health care, such as doing only orthopedic surgery. This ban would not apply to doctor-owned surgical centers. Currently doctors who own shares in specialty hospitals are more likely to refer the highest paying patients or the healthiest ones to their center, called cherry-picking. This ban would put an end to these practices. For the full article click here.