News and Insights
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At the end of 2015, the Centers for Medicare and Medicaid Services (CMS) issued a final rule that resulted in major changes to the federal physician anti self-referral law (the “Stark Law”). Those changes, most of which went into effect on January 1, 2016, include the addition of two new exceptions: one pertaining to the recruitment of non-physician practitioners; the other concerning timeshare arrangements.
Stark Law Basics:
The Stark Law prohibits physicians from making referrals for certain
designated health services (DHS) payable by Medicare to an entity with which the physician (or an immediate family member of the physician) has a financial relationship – unless an exception to the law applies. The law sets forth numerous exceptions that apply to ownership arrangements, compensation arrangements, or both.
 Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for VY 2016, 80 FR 70866-01 (November 16, 2015).
 42 C.F.R. § 411.357(x); 42 C.F.R. § 411.357(y)
 42 C.F.R. § 411.353
 42 C.F.R. § 411.357
The entire medical community is under high scrutiny when it comes to coding and billing. All too often medical providers are subject to coding audits or civil enforcement actions regarding coding and billing, or even criminal actions for improper coding and billing.
CMS Instructs Carriers to Hold Medicare Payments for Two Weeks In Anticipation of SGR Reduction Delay
On March 31, 2014, Congress finalized legislation to temporarily prevent a scheduled decrease in Medicare reimbursements to providers that was set to take effect on April 1, 2014. The Protecting Access to Medicare Act of 2014, H.R. 4302, has now been sent to President Obama who is expected to quickly sign it. The law will delay the reductions for one year.
In the hope that Congress would intervene to prevent the reductions from taking effect, the Centers for Medicare and Medicaid Services (CMS) instructed all Medicare Administrative Contractors to hold any claims for services paid under the Medicare Physician Fee Schedule with dates of service on or after April 1, 2014, until April 14, 2013. All claims for services delivered on or before March 31, 2014, will be processed and paid under normal procedures.
CMS believes that this hold should have a minimal impact on provider cash flow because, under current law, clean electronic claims are not paid any sooner than 14 calendar days (29 days for paper claims) after the date of receipt.
Update: The President signed the Protecting Access to Medicare Act of 2014 on April 1.
The final rule regarding the “Sunshine Act” was published by the Centers for Medicare and Medicaid Services (“CMS”) on February 1, 2013. This rule interprets the provisions of the physician payment provisions for the Affordable Care Act, and finalizes the creation of a database of the financial relationship between physicians and covered drug and device manufacturers.
This long-awaited rule is intended to increase transparency and “to reduce the potential for conflicts of interest that physicians or teaching hospitals could face as a result of their relationships with manufacturers,” according to the statement released by CMS.
The Sunshine Act establishes guidelines and requirements for certain entities referred to as “applicable manufacturers” to report their financial relationships with physicians. Specifically, manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, or the Children’s Health Insurance Program must report to CMS payments or other transfers of value they make to physicians and teaching hospitals. Group purchasing organizations and applicable manufacturers must also disclose physician ownership or investment interests held on or after August 1, 2013.
The Sunshine Act excepts certain types of transfers of value from the reporting requirement, such as incidental items valued at less than $10 and educational materials intended for use with patients. Physicians will be provided an opportunity to review and, if necessary, dispute information reported to CMS.
The final rule implements reporting timelines, and also creates a venue for the public to view the information. Data collection is to begin on August 1, 2013; the first reports to CMS must be filed by March 31, 2014. The data is slated to be released to the public via a CMS website by September 30, 2014.
For information regarding reporting and reviewing information, see the CMS Open Payments website here.
The Centers for Medicare & Medicaid Services announced its sixteenth settlement from a disclosure reported through the Self-Referral Disclosure Protocol for violations of the Stark Law. The disclosure was initiated by an acute care hospital in California that was unable to satisfy the personal service arrangement exception for an on-call physician arrangement. The disclosed violations were settled for $1,600. The government only publishes information related to certain disclosures.
The personal services arrangement exception is the most applicable exception to on-call arrangements with physicians. This exception requires an executed written agreement that describes the services to be performed by the parties. Among other elements, the compensation paid over the term must be fair market value and must not be determined in a manner that takes into account the volume or value of certain referrals.
Compliance with the Stark Law is particularly complex with on-call arrangements because of the difficult of determining fair market value of the compensation. In fact, the government only recently publicly approved providing compensation to physicians for on-call services. The government has been increasingly scrutinizing on-call arrangements due to the difficulty of valuing the services provided and the perceived opportunity to compensate referring physicians for referrals contemplated outside of the on-call arrangement.