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Brain Surgeons Seek Exception to Conflict-of-Interest Limit on Hiring

Legislators weigh easing ban on physicians making direct referrals to service providers in which they have financial interest

IOM intraoperative monitoring
Intraoperative monitoring (IOM) enables medical technicians to observe and track nerve signals that the surgeons can’t see.

Patients going under the knife for brain surgery want their surgeons to have the best technology and assistance available. But should patients be concerned if their surgeons could profit from the technicians they hire?

That question is at the heart of an effort to change the state’s Codey Act, which prevents doctors from referring patients to healthcare services in which the doctors or their families have a financial interest.

Neurosurgeons, however, argue that an exemption needs to be made for intraoperative monitoring (IOM), which enables technicians who assist at some medical procedures to track nerve signals that the surgeons can’t see.

Those in favor of the change say it’s needed because there’s a shortage of IOM providers, raising the chances that New Jersey will lose patients to neighboring states. In effect, they want to be able to directly employ IOM providers, which means referring their services as needed.

But executives with the companies that currently provide IOM services in the state say the proposal is risky. They say that if surgeons could employ the technicians -- or have a financial interest in businesses that employ the technicians -- they would have an incentive to favor one service over another.

These executives also say that the technicians would become less likely to raise concerns with surgeons who employ them about mistakes that the surgeons make.

Dr. Anthony D’Ambrosio, a Bergen County-based neurosurgeon and assistant professor at Columbia University Medical Center, said it’s becoming difficult to find IOM technicians who are able to deliver the necessary level of services. He added that the quality of the services provided by technicians can determine whether a patient leaves a spinal-cord surgery ready to return to work or permanently disabled.

“When used correctly, it’s an amazing adjunct to what we do,” D’Ambrosio said.

D’Ambrosio said the current law prevents surgeons from providing incentives to attract the best technicians, since they currently must go through an outside company rather than directly employing the technicians.

But IOM company executives countered that surgeons shouldn’t employ technicians.

“If the technician were employed by the surgeon, this technician might be a lot less likely to bring up all of the bad things -- for lack of better words -- that the surgeon did during the surgery,” said Frank Gazillo, chief operating officer of Fairfield-based Accurate Monitoring.

Assemblyman Herb Conaway Jr. was skeptical of the argument.

“You really think there’s a danger … because of the changed nature of their relationship, that care’s going to suffer?” Conaway asked, questioning whether “someone’s going to sit silent as some disaster is happening in front of them.”

Cheryl Wiggins of Nashville, Tenn.,-based IOM provider Specialty Care said the proposed change risks destroying public trust in the quality of intraoperative monitoring services, if IOM technicians “defer completely to the profiting surgeon’s discretion.”

Health insurance companies also were wary of the proposed change. Wardell Sanders, president of the New Jersey Association of Health Plans, said it may be appropriate to make changes to the law, but they should be narrowly tailored, such as limiting the exemption to a specialty like neurosurgery that may have a shortage of technicians.

The proposed change, which is supported by the Medical Society of New Jersey, would apply to all operations that use IOM services, including orthopedic and ear-nose-and-throat procedures.

Sanders emphasized that the state and federal laws against physician self-referrals exist for good reasons, including providing confidence that doctors’ clinical decisions are free from conflicts of interest and preventing overutilization.

A bill was introduced in December to make the change. While it advanced in both the Assembly and Senate, it isn’t scheduled for a vote today -- the final day for legislative votes this session. It could be brought up again next session.

The bill, A-4780/S-3246, was released by the Assembly Health and Senior Services Committee on an 11-1 vote. Committee Chairman Conaway, a doctor, sponsored the bill.

The Senate Health, Human Services, and Senior Citizens Committee also released the bill, on a 5-2 vote.

Among the legislators opposed to releasing the bill was Sen. Richard J. Codey (D-Essex and Morris), who sponsored the original 1989 state law that instituted the state restrictions on doctors having a financial interest in services to which they refer patients.

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