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CMS Proposes Stark Law Changes to Implement Affordable Care Act Provisions




by:
SNR Denton - Chicago Office

 
July 26, 2010

Previously published on July 8, 2010

The Centers for Medicare and Medicaid Services ("CMS") has proposed revisions to the existing federal physician self-referral law ("Stark Law") regulations to implement provisions enacted as part of the Patient Protection and Affordable Care Act of 2010 ("Affordable Care Act").  The proposals appear in two separate rulemakings:  (1) the CY 2011 Medicare Physician Fee Schedule Proposed Rule ("MPFS Proposed Rule"), expected to be published on July 13, 2010, and (2) the CY 2011 Hospital Outpatient Prospective Payment System Proposed Rule ("OPPS Proposed Rule"), expected to be published on August 3, 2010.

MPFS Proposed Rule

Section 6003 of the Affordable Care Act amends the statutory in-office ancillary services ("IOAS") exception, as it applies to magnetic resonance imaging ("MRI"), computed tomography ("CT"), and positron emission tomography ("PET"), to require a physician to provide written notice to patients -- at the time of the referral at issue -- that the patient may obtain such services from suppliers other than the physician.  In the MPFS Proposed Rule, CMS seeks to amend the regulatory IOAS exception to effectuate this change.

Under the proposal, CMS would require physicians seeking to protect a referral for the specified imaging services under the regulatory IOAS exception to provide written notice to patients of the availability of other suppliers that could furnish the service.  The notice would be required to identify at least 10 other suppliers (or all suppliers if there are fewer than 10) within a 25-mile radius of the location where the patient is obtaining the imaging service, and include the supplier's name, address, phone number, and distance from the physician's office location at the time of the referral.  For patients who travel to receive medical care, CMS concluded that providing a list of alternative suppliers within a 25-mile radius of the physician's office, rather than the patient's residence, will better serve patients who have traveled a long distance to receive medical care.  The proposal further provides that:

  • To provide physicians with greater flexibility in drafting the list of alternative suppliers, the disclosure does not need to include the 10 closest suppliers to the physician's office, so long as all the suppliers are in the 25-mile radius.
  • If no other suppliers exist in the 25-mile radius, a list of alternative suppliers is not required, but physicians still must provide patients with a written disclosure that they may receive imaging services from another supplier.
  • CMS is requiring the notice to only identify "suppliers" as defined under section 1861(d) of the Social Security Act (the "Act"), thereby carving out "providers," such as hospitals and critical access hospitals.

CMS is proposing an effective date of January 1, 2011 for the regulation implementing this provision.

In connection with this proposal, CMS is soliciting comments on the following:

  • Whether to expand the disclosure requirement to include other radiology and imaging services (e.g., ultrasound services) and, if so, which services to include.
  • Whether inclusion of "providers of services" -- such as hospitals and critical access hospitals -- would provide patients more, and varied, options in choosing an alternate entity for obtaining imaging services.
  • Whether the 25-mile radius requirement is appropriate, particularly as applied to rural areas; whether different radii should be applied to urban and rural areas; and whether other criteria should be considered in finalizing this regulation for physicians in both urban and rural areas.
  • Whether providing a list of 10 suppliers is too burdensome for physicians, or will prove too susceptible to abuse.  In particular, CMS is concerned that, in metropolitan areas, physicians may include suppliers located at the outer edges of the 25-mile radius, which would deter patients from seeking out those suppliers.  CMS is soliciting comments about whether alternate criteria would result in an adequate list of convenient suppliers.
  • Whether there are circumstances under which it would be difficult or impractical to provide written disclosure to patients before providing imaging services (e.g., procedures performed on an emergency basis).
  • Whether requiring physicians to provide a "reasonable" list of other suppliers would be a suitable alternative to the disclosure requirement in the Affordable Care Act, or if there are other alternative methods for implementing this statutory requirement.
  • Whether the requirement that a record of the patient's signature on the disclosure notification poses a recordkeeping burden for physicians, and whether there are other ways to record that proper disclosures were made at the time of referral.

OPPS Proposed Rule

Section 6001 of the Affordable Care Act amends the Stark Law to provide that its rural provider and whole hospital ownership exceptions will apply only with respect to hospitals in which the physician had an ownership or investment interest on or before December 31, 2010.  Except as expressly permitted under the statute, the Affordable Care Act further restricts application of the Stark Law exceptions for those "grandfathered" hospitals to the number of operating rooms, procedure rooms, and beds for which the facility was licensed on or before March 23, 2010.

In the OPPS Proposed Rule, CMS proposes conforming changes to the Stark Law regulations to implement the Affordable Care Act amendments.  CMS is proposing a new section at 42 C.F.R. § 411.362 to incorporate these changes.  The new provision would address issues related to physician ownership and provider agreements; limitations on expansion of facility capacity; ensuring bona fide investment; patient safety; conversion from an ambulatory surgery center; disclosure of physician ownership to CMS; and enforcement.  CMS also is soliciting comments on whether the definition of "procedure rooms" should be expanded to include rooms where additional services, such as CT or PET scans, or other services, are performed.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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