Concerns about moral hazard and conflicts of interest in Accident Compensation Corporation payments for private sector CT scans and MRI scans were pushed aside by the High Court with blithe acceptance that the Corporation could handle such conflicts despite over five years of inaction.
Independent radiologists are up in arms about corporate radiologists owned directly or indirectly by medical practitioners who then refer their patients to their own specialist radiology clinic, capturing some of the profits from this referred work. They argue there is an ethical conflict of interest with a danger of these medical practitioners improperly over-referring patients (booking scans when there is no clinical requirement for one) and sub-optimal referrals (when a different provider would provide a better clinical service).
In 2021, a number of independent radiologists banded together challenging Accident Compensation Corporation payment for referrals to what they claim are radiologists not sufficiently independent. In their sights are Beyond Radiology, Radiology Group and Mercy Radiology all of which are owned to various degrees by doctors or their families. There are forty radiology units in New Zealand providing high-tech CT and MRI imaging; split roughly 50/50 between the private sector and what were District Health Boards
Independent radiologists claim ACC is not complying with terms of its own Act; the requirement to act in a cost-effective manner. There is a risk of ACC being overcharged where there is commercial relationship between those providing referrals and those doing the work, they say.
The High Court was told that since 2016 the ACC standard-form service contract for radiologists has required service suppliers to disclose any conflict of interest and where a conflict exists that a written agreement with ACC is required setting out how this conflict is managed. Evidence was given that ACC had taken no interest in enforcing these rules until early 2021 and then spent six months seeking to identify which radiology providers had links to those providing referrals. Since then, it has identified three medical practitioners with unusual referral patterns. Their names were supressed.
Justice Cooke ruled that ACC is able to manage conflicts of interest between referrers and providers and that the current management system does comply with ACC requirements to act in a cost-effective manner.
In other areas of the health sector, the rules are more precise. The Medicines Act prohibits any person who issues prescriptions from owning a pharmacy.
NZ Institute of Independent Radiologists Inc v. Accident Compensation Corporation – High Court (20.12.22)
23.015