CMS wants input on new self-referral rules

The comment period, which ends Jan. 25, could lead to further guidance for restructuring noncompliant physician-hospital arrangements.

By Amy Lynn Sorrel — Posted Jan. 20, 2010

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CORRECTION: Do to a computational error by American Medical News, this article incorrectly stated the deadline for comments. The deadline was Dec. 29, 2009. The Centers for Medicare & Medicaid Services has the discretion to accept late comments, but it only assures review of those submitted by the official deadline. American Medical News regrets the error.

Physicians have until Jan. 25 to comment on the Centers for Medicare & Medicaid Services' recent changes to federal anti-self-referral rules that have forced many physician-hospital arrangements to fold or restructure.

The federal Stark law generally prohibits physicians from referring patients to entities in which they have a financial stake. In a final rule that took effect Oct. 1, 2009, CMS instituted broad revisions that interpret an entity to include not only the party that directly bills Medicare for designated health services, but also those providing the services. Under the change, physician groups are considered to have a direct ownership stake in the designated health services they perform, barring referrals unless they can meet stricter Stark exceptions.

The changes stemmed from the government's fears that the self-referral rules were too lenient and promoted abusive arrangements that could lead to improper referrals and overutilization of services. But many physician organizations, including the American Medical Association, expressed concern about certain ambiguities in the rule change and its impact on legitimate arrangements and patient care.

In response, CMS, in its Nov. 24, 2009, publication of the 2010 Medicare Physician Fee Schedule, began soliciting comments "to determine the need for further guidance" on the issue. The agency is asking for input on whether CMS should define or clarify what it means for a physician-owned entity or its employees to be performing designated health services under certain arrangements.

CMS also will consider:

  • Whether inpatient and outpatient services should be regarded differently.
  • The impact of services provided by nonphysicians.
  • The role of space and equipment leases and billing practices.

In addition, physicians and others may comment on potential alternative approaches or criteria that would address CMS' policy concerns, while limiting the impact on non-abusive arrangements.

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