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Medicare News
New Medicare Rule to Stop Physicians from Referring
Patients to Businesses Where They Profit
Final step of physician self-referral prohibition
known as the Stark law
Aug. 28, 2007 The Centers for Medicare and
Medicaid Services today issued final regulations prohibiting physicians
from referring Medicare patients for certain items, services and tests
provided by businesses in which they or their immediate family members
have a financial interest.
This regulation is the third phase of the final
regulations implementing the physician self-referral prohibition
commonly referred to as the Stark law.
These rules protect beneficiaries from receiving
services they may not need and the Medicare program from paying
potentially unnecessary costs, said Herb Kuhn, CMS acting deputy
administrator.
This third phase of rulemaking (Phase III) responds
to public comments on the Phase II interim final rule published March
26, 2004 in the Federal Register. The rule does not establish any new
exceptions to the self-referral prohibition, but rather makes certain
refinements that could permit or, in some cases, require restructuring
of some existing arrangements, CMS officials explained.
We believe this final rule is consistent with the
statutes goals and directives, and protects our beneficiaries, Kuhn
said.
Based on public comments on the Phase II rule, this
final regulation includes the following actions:
● Provides enhanced flexibility in structuring
non-abusive compensation arrangements. For example, the rules regarding
physician recruitment and retention payments are expanded to permit
recruitment of more physicians into extended areas when needed.
● Provides relief for inadvertent violations of
the self-referral prohibition under certain circumstances. For example,
the rules permit parties that inadvertently exceed the limit on
non-monetary compensation to continue to satisfy the requirements of the
exception if the excess non-monetary compensation did not exceed 50
percent of the permitted amount and is repaid within 180 days of its
receipt or the end of the calendar year, whichever is earlier.
● Reduces the regulatory burden for compliance
with certain exceptions. For example, the Phase III final rule
eliminates the requirement that entities providing professional courtesy
provide written notice to an insurer of a reduction of any coinsurance
obligation.
● Clarifies the agencys interpretation of
existing regulations. For example, the rule clarifies which provisions
in office space and equipment lease agreements may be amended during the
initial and subsequent terms of the agreements.
As guardians of the Medicare program, we must be
mindful of the potential impact that physician conflicts of interest can
have on the Medicare program and its beneficiaries, Kuhn said.
The rule we released today strikes the proper
balance between protecting patients and the program, and providing
needed flexibility to health care entities to ensure the provision of
quality care to our beneficiaries without unnecessarily impeding
non‑abusive arrangements.
The final rule, which was put on display today,
will be published in the September 5, 2007 Federal Register. For more
information, visit the CMS Web site at:
http://www.cms.hhs.gov/PhysicianSelfReferral/
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