Plan to bar doctor-owned MRIs dropped

State budget negotiators killed an amendment that would have allowed Quincy-based Shields Health Care Group to lock up a large share of the state's lucrative and competitive MRI market by strongly restricting imaging facilities owned by physicians.

The amendment, approved by House members in April with no public debate, was seen as anticompetitive by opponents, who said it would have unfairly benefited Shields Health Care chairman Thomas F. Shields. Shields is a former member of the Massachusetts Convention Center Authority. He and members of his family, also executives at the privately held company, are frequent contributors to State House political campaigns.

The Globe reported on the amendment Friday as efforts were under way on Beacon Hill to forge a compromise. In subsequent days, it was stripped from the final budget bill at the behest of reluctant state senators.

''It was kind of sprung on us out of nowhere as part of the budget process," Senator Steven C. Panagiotakos, a Lowell Democrat, said yesterday. ''We really need more information and a full hearing on the issue."

That was good news at the Fallon Clinic physicians' group in Worcester, where Dr. Baltej Maini, the chief executive, said he learned of the measure only after it had been added to the House budget. He never had a public forum in which to object. Fallon plans to add MRI (magnetic resonance imaging) services for its Central Massachusetts patients.

''We are very pleased with the outcome," Maini said. ''The defeat of this legislation shows that when issues affect the healthcare of the citizens of this state, they should be brought up for debate. Our position was this bill should not see the light of day because it did not follow a process."

The amendment, introduced by Democratic Representative Paul Kujawski of Webster, would have prohibited a physician from referring patients to a testing facility where the physician owns an interest.

The stated goal of backers of the bill, including the state's radiologists and community hospitals, was to prevent doctors from ordering unnecessary tests as a way of driving up their own income. Such self-referrals are prohibited by federal laws authored by Democratic California Representative Pete Stark in the early 1990s, but loopholes allow entire practices and groups of physicians to benefit from MRI ownership within the same building.

The amendment's immediate effect in Massachusetts would have been to ban physician-owned MRIs, including those operated by Harvard Vanguard Medical Associates and Partners HealthCare System Inc. Both Harvard Vanguard and Partners HealthCare opposed the measure.

Shields Health Care did not respond to a request for comment yesterday. The company has previously said it did not initiate the amendment. The company fielded at least two lobbyists to support the provision and arguably had the most at stake. With 24 machines in Massachusetts, it is the biggest chain, operating more than 25 percent of the MRI machines that are tracked by the state.

A staffer in Kujawski's office who helped to develop the amendment, Kevin Shea, told the Globe last week that he got the idea of barring physician self-referrals to MRIs from his wife, an administrator at Beverly Hospital. Beverly Hospital is a member of the Massachusetts Council of Community Hospitals, which supported the amendment last week, citing hospitals' ''precarious financial position," which could be exacerbated by the loss of MRI billings to outside entities.

If there is any doubt community hospitals have lost their dominance over the imaging business to entrepreneurs and doctors' groups, a trip along crowded roadways near Northshore Mall in Peabody would be instructive.

MRI centers have sprung up like fast-food restaurants. Ringing the mall are a new MRI center operated by Sports Medicine North, a group of orthopedic doctors in partnership with MRI Centers of New England, a major Shields rival; the Shields MRI at Lahey Clinic Northshore, which is operated by Shields Health Care Group; and North Shore Magnetic Imaging Center, a joint venture of Beverly Hospital, Salem Hospital, and two other North Shore hospitals.

Dr. Robert J. Swanson, a physician practicing in California who started MRI Centers of New England and seeks partnerships with Massachusetts doctors, said yesterday that the amendment to block doctor-owned services would have limited patient choices.

''From our perspective, it's a much bigger picture," Swanson said. The market, he added, ''pits hospitals against doctor organizations. As healthcare evolves here in the next 20 years, I don't think the state would be well served to have the doctor organizations off the playing field."

Christopher Rowland can be reached at crowland@globe.com.