Stark In-Office Ancillary Services Exception Update

Brent T. Hoard, Business and Health Care Attorney

STAT Health Care News

In a prior client alert, we discussed a new, health care reform-imposed requirement that a Medicare beneficiary referred for MRI, CT, or PET services under the In-Office Ancillary Services Exception to the Stark II law (“IOASE”) must, at the time of referral, be provided with a list of “alternate” suppliers located in the area in which the patient resides. If you would like to obtain a copy of the aforementioned client alert, please e-mail Brent Hoard.

At the time, a number of lingering questions were raised by the language in this imprecisely-drafted provision. For example, the bill was signed into law on March 23, 2010, but the plain language in the statute appeared to indicate that providers were required to provide notification to patients as of January 1, 2010. (Perhaps if Congress had read the bill first, such an apparent contradiction would not have gone unnoticed.) Nevertheless, regulations promulgated by the Centers for Medicare & Medicaid Services (“CMS”) in the 2011 Physician Fee Schedule clarify the outstanding issues associated with the notification requirement (the “Regulations”).

The Regulations provide as follows:

1.Effective January 1, 2011, each Medicare beneficiary referred for MRI, CT, or PET services under the IOASE must receive a list setting forth at least five (5) alternate imaging suppliers located within a 25-mile radius of your practice’s location. If there are less than five (5) imaging suppliers within the 25-mile radius, the list must include all imaging suppliers within the area. If there are no imaging suppliers in the area, the patient must be provided with a notice that the patient has the option of obtaining the services from another supplier.

2.The list must include, at a minimum, each alternate supplier’s name, address, and telephone number.

3. Only MRI, CT and PET are covered at present; however, at some point in the future, other services could be included.

4.The Regulations do not require your practice to list hospitals, but again, be alert for future changes that could require your practice to list “providers of services” (e.g., hospitals) in addition to suppliers.

5. Although your practice will not be required to document the disclosure through patient signatures on the notification, or maintain such documentation in the patient’s medical record, your practice must retain “adequate assurance” that the information was shared with the patient for verification. Thus, the conservative approach, and the approach we recommend, is to obtain a patient signature on the disclosure form and include the signed form in the patient’s record.

Although the Regulations will add another burden to your already over-burdened staff, your practice must comply with this requirement effective January 1, 2011. To assist with your practice’s compliance efforts, a sample Notification of Alternate Suppliers is included below.

If you have questions about how the Regulations or other portions of the health care reform bill may affect your practice, we suggest that you consult with an experienced health care attorney.

NOTIFICATION OF ALTERNATE SUPPLIERS
OF DIAGNOSTIC IMAGING SERVICES

Dear Valued Patient:

[INSERT NAME OF PRACTICE OR REFERRING PHYSICIAN] has recommended that you seek certain diagnostic imaging services (i.e., CT, MRI, or PET scan) as part of your course of treatment.

Pursuant to Section 6003 of the Patient Protection and Affordable Care Act, [INSERT NAME OF PRACTICE OR REFERRING PHYSICIAN] is hereby providing notice to you that you may obtain diagnostic imaging services from another provider other than [INSERT NAME OF PRACTICE OR REFERRING PHYSICIAN] if you so choose.

The following is a list of suppliers that provide such diagnostic imaging services within a twenty-five-mile (25-mile) radius of this location:

[INSERT LIST OF AT LEAST 5 SUPPLIERS WITH NAMES, ADDRESSES, AND TELEPHONE NUMBERS]

If you elect not to use one of the aforementioned alternate suppliers, [INSERT NAME OF PRACTICE OR REFERRING PHYSICIAN] will be pleased to provide your diagnostic imaging services.

Please acknowledge your receipt of this notification by signing below.

______________________________

Patient’s Signature

______________________________

Patient’s Printed Name

______________________________

Date

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This publication is not intended as legal advice, which may often turn on specific facts. Readers should seek legal advice before acting with regard to the subjects mentioned herein.