STARK IN-OFFICE ANCILLARY SERVICES EXCEPTION UNDER ATTACK

Question: I know that the Stark in-office ancillary services exception is important to our practice being able to profit from certain services we provide in our office. But I’ve heard that it is under attack. Is that exception still available?
 
Answer:The in-office ancillary services exception (“IOASE”) is perhaps the most important exception to the Stark law’s prohibition on physician self-referrals of certain health services. But you are wise to keep your eye on its continued viability for your practice as there are renewed efforts to restrict its application. President Obama’s Fiscal Year 2014 Budget contains several proposals intended to encourage “more appropriate compensation for the efficient provision of services under the Medicare program.” The Budget cites prior reports by MedPac and the GAO that physician self-referral of ancillary services leads to a higher volume when combined with fee-for-service payments. The Budget proposes narrowing the IOASE by allowing only physicians who meet certain undefined accountability standards to self-refer radiation therapy, therapy services, and advanced imaging services such as CT and MRI services. In addition, the Simpson-Bowles Deficit Commission recently issued a report that includes the recommendation that physician self-referrals should be further restricted and better monitored, including narrowing the IOASE.

While it is unclear whether, or in what fashion, these proposals will be acted upon, it is certainly clear that radiation therapy, physical therapy and advanced imaging services are at risk of losing the protection of the IOASE. If you are currently providing these services, or are considering a new investment in such in-office services, you would be wise to remain aware of the progress of these initiatives and how they will affect your practice if they result in new restrictions on self-referrals.

If you have any further questions, please contact our Managing Partner, Michael J. Schoppmann, Esq at 1-800-445-0954 or via email at MSchoppmann@DrLaw.com.

  

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