CMS FINAL RULE - WRITTEN DISCLOSURE REQUIREMENT FOR IN-OFFICE ANCILLARY SERVICES EXCEPTION TO THE PROHIBITION ON PHYSICIAN SELF REFERAL FOR MRI, CT AND PET SERVICES - EFFECTIVE JANUARY 1, 2011
By: Donald R. Moy
Effective January 1, 2011, referring physicians (non-radiologists) who provide MRI, CT and PET scans in their office practices will be required to make certain disclosures and provide information to their Medicare patients or risk violation of the physician self-referral law (Social Security Act Section 1877, also know as the “Stark Law”).
The Stark Law
The Stark Law: (1) Prohibits a physician from making referrals for certain “designated health services” (DHS) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership or compensation), unless an exception applies; and (2) prohibits the entity from submitting claims to Medicare (or billing another individual, entity, or third party payer) for those DHS rendered as a result of a prohibited referral. The statute establishes a number of exceptions and grants the Secretary of DHHS the authority to create additional regulatory exceptions.
The Stark law’s “In-Office Ancillary Services” exception permits a physician in a solo or group medical practice to order and provide DHS (other than most durable medical equipment and parenteral and enteral nutrients) in the office of the physician or group practice, where certain supervision, location and billing requirements are met.
The Patient Protection and Affordable Care Act of 2010 (“PPACA”)
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CMS Proposed Rule June 13, 2010
On June 13, 2010, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule on how to implement section 6003 of the PPACA. See 75 Fed Reg. 40140-40142 (“Proposed Rule”). The Proposed Rule required that the written notice must include no fewer than 10 suppliers located within a 25 mile radius of the physician’s office location at the time the referral is made. If fewer than 10 other suppliers are available within the 25 mile radius, the physician must list all of the other suppliers of the particular imaging service that are present in the 25 mile radius. The written notice must include information regarding the listed suppliers, including the name, address, phone number, and distance from the physician’s office location. The rule also required that the physician obtain the patient’s signature on the disclosure notice, and that a copy of the signed disclosure notice must be maintained in the patient’s medical record.
CMS Final Rule
CMS finalized the Rule on November 29, 2010. See 75 Fed Reg. 73443-73447. The effective date of the Final Rule is January 1, 2011. The Final Rule makes a number of significant changes from the Proposed Rule:
- Reduces the number of suppliers that must be listed from 10 to 5.
- Removes the requirement that the supplier’s distance from the physician’s office be listed on the disclosure notice.
- Removes the requirement that the physician obtain the patient’s signature on the notice and retain a copy of the disclosure in the patient’s medical record.
Q: What services trigger the Disclosure Requirement?
A: The Disclosure Requirement applies to MRI, CT and PET services. Even though the PPACA gave the Secretary authority to apply the disclosure requirement to other DHS services, the Secretary declined to expand the disclosure requirement in the Final Rule.
Q: Does the use of CT imaging always trigger the disclosure requirement?
A: No. The disclosure requirement applies to all in-office referrals for CT imaging services that are categorized as “radiology and certain other imaging services” by the list of CPT/HCPCS codes. For example the use of CT imaging which is integral to the performance of radiation therapy treatments, that are included in the DHS category of radiation therapy services and supplies, does not constitute a “referral’ as defined by 411.351, and the disclosure requirements would not apply.
Q: What are the general disclosure requirements?
A: The disclosure notice “should be written in a manner sufficient to be reasonably understood by all patients” and must, as the PPACA requires, be given at the time of the referral. The notice must indicate to the patient that the services may be obtained from a person other than the referring physician or his or her group practice and must include a list of other suppliers who provide the service being referred (MRI, CT, or PET).
Q: Will a physician satisfy the disclosure requirement by giving patients the list of suppliers upon initiation of the physician-patient relationship, and annually thereafter?
A: No. The PPACA requires the disclosure to be made “in writing at the time of the referral”. CMS states that this means the disclosure must be presented to the patient each time one of the listed advance imaging services is referred.
Q: Must the disclosure be made for subsequent referrals made via phone call?
A: The written disclosure must still be provided. Mailing or e-mailing the disclosure to the patient would be acceptable if verbal notification has also occurred.
Q: Will CMS prepare a draft disclosure document that physicians can use as a model?
A: No. CMS does not plan to prepare standard disclosure language. Each physician office is responsible for drafting the language employed in the notice.
Q: May the physician’s notice make it clear that inclusion of other suppliers is not intended as an endorsement or recommendation of those suppliers?
A: Yes. There is nothing in section 6003 of the PPACA or the Final Rule that precludes the physician from doing so.
Q: What information must be included in the list of Alternate Suppliers?
A: The notice must list 5 alternate suppliers located within a 25 – mile radius of the physician’s office at the time of the referral. The name, address, and phone number of each supplier must be provided.
The Proposed Rule required a list of 10 suppliers, but the Final Rule decreases the required number of alternate suppliers to 5. Also, the Final Rule removes the requirement that the distance from the referring physician’s office be included in the notice.
Q: Is the disclosure requirement satisfied by furnishing the patient with a list of hospitals?
A: No. The PPACA requires physicians to provide patients with a list of alternate “suppliers” (as defined in section 1861(d) of the Social Security Act). Under the statute, hospitals are “providers of services” not “suppliers”. The statute defines “supplier” to include a physician or other practitioner, a facility or entity (other than a provider of services). CMS states, however, that physicians are not precluded from listing hospitals in the disclosure notice as long as the required number of suppliers is also included. CMS encourages, for example, that in rural areas where no other suppliers exist in the 25 mile radius, physicians may list a hospital on the disclosure notice as an alternate location for the patient to receive the referred imaging service.
Q: Did CMS provide an exception to the disclosure requirement for services furnished on an emergency or time sensitive basis?
A: No. CMS states that it does not believe such an exception is necessary. In those situations, physician should make a reasonable attempt to provide the notice to the patient and document that the attempt was made.
Q: How should physicians go about the task of compiling alternate suppliers?
A: CMS declined to prescribe any one method. CMS does not plan to create a standard form or a publicly available database for this disclosure requirement. CMS will not require Medicare contractors to furnish lists of all entities providing such services.
CMS states that some physicians may choose to compile a list of suppliers from an internet search, and others may know suppliers in the 25 mile radius.
Q: What is the frequency with which a physician must review and update the list of suppliers?
A: CMS recommends that the list of suppliers be reviewed annually for accuracy and updated at that time, if necessary.
Q: What are the Documentation requirements?
A: The Proposed Rule required that a record of the patient’s signature on the disclosure notification must be maintained in the patient’s medical record. In the Final Rule, CMS acknowledged that obtaining the patient’s signature and maintaining a copy of such in the medical record may be burdensome. CMS states that, nevertheless, physicians should document that they have complied with the disclosure requirement. For example, the physician could document in the patient’s chart that the notice was given to the patient.
Q: What is the Effective Date of the new disclosure requirement?
A: The new disclosure requirement applies to services furnished on or after January 1, 2011.
Kern Augustine Conroy & Schoppmann, P.C., Attorneys to Health Professionals,www.DrLaw.com, is solely devoted to the representation of physicians and other health care professionals. The authors of this article may be contacted at 1‐800‐445‐0954 or via email at info@DrLaw.com.