The new physician self-referral regulations contained in the fiscal year (FY) 2009 Inpatient Prospective Payment System (IPPS) final rule were discussed by a group of experts at a teleconference sponsored by the American Bar Association.
Lisa Ohrin, deputy director of CMS' Center for Medicare Management, Chronic Care Policy Group, provided an overview of the “stand in the shoes” (SITS) provision. An exception to the ownership provision is titular ownership, when there is no ability or right to receive financial benefits of ownership or investment, including, but not limited to, profit distributions, dividends and sale proceeds. Under permissive SITS - a nonowner physician (and titular owners) may, but is not required, to stand in the shoes of his or her physician organization.
Don Romano, director of CMS' Center for Medicare Management Division of Technical Payment Policy, explained that in the FY 2009 IPPS final rule, CMS has restricted under arrangement (UA) transactions by changing the definition of “entity furnishing DHS.” He noted that under the Stark Law, a physician may not refer to an entity that furnishes designated health services (DHS) if the physician has a financial relationship with the entity unless a Stark exception applies. Previously, an entity was considered to furnish DHS only if it was the person or entity to which CMS made payment for the DHS. Under the new regulations, a person or entity is considered to be furnishing DHS if the person or entity has performed services that are billed as DHS, or has presented a claim to Medicare for the DHS.
Per-click compensation is now prohibited in all space and equipment leases to the extent that the charges reflect services provided to patients referred by the lessor to the lessee, said Linda Baumann, a partner with Arent Fox in Washington, D.C. Compensation for the rental of office space or equipment may not be determined using a formula based on per-unit of service rental charges to the extent that such charges reflect services provided to patients referred between the parties.
According to Baumann, parties can amend “set in advance” compensation provisions in an agreement during the agreement’s term if all the requirements of an applicable exception are met, Baumann said. The requirements of an applicable exception are: (1) the revised rental charges or other compensation has to be determined before the amendment is implemented, (2) the formula has to be sufficiently detailed to allow objective verification, and (3) the agreement has to be in place for one year.
CCH Washington Bureau, Sept. 9, 2008
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