Medicare Compliance & Reimbursement

As the self-referral debate rages on, know these basics.

Rumors continue to swirl that the Stark Law will be subject to the Trump Administration's deregulation agenda. And as CMS and other federal healthcare agencies streamline rules and regulations to assist providers with administrative burdens, physician self-referral may be refurbished next.

Definition: If you have a partial interest in another healthcare company or service, you cannot exclusively refer patients to the firm unless you have a documented exception. "Stark's fundamental focus is to prevent physicians (except in particular circumstances) from making referrals to entities with which they have a financial relationship," explains attorney John E. Morrone, a partner at Frier Levitt Attorneys at Law in New York, New York.

The Physician Self-Referral Law, also known as the Stark Law, is complicated. It's important to remember that physicians have the most to lose by violating this law. And if you get caught making a prohibited referral, you can expect a civil suit to follow with punishments ranging from fines, forced refunds, Civil Monetary Penalties (CMPs) up to $15,000 for each service, and program exclusions.

Context: The American Hospital Association (AHA) President and CEO, Rick Pollack, had CMS Administrator Seema Verma on an AHA town hall webcast in late January, where they discussed regulations in health care and moving toward a value-based payment system.

According to an AHA news release, during the webcast, Verma acknowledged what hospitals and other healthcare entities consider challenges with Stark Law regulations, saying, "I think the Stark Law was developed a long time ago, and given where we're going in terms of modernizing [Medicare] and the payment systems we are now operating under now, we need to bring along some of those regulations."

According to the release, Verma added that Congress might have to act to provide full relief from the Stark Law.

Watch the full webcast at: http://windrosemedia.com/windstream/aha/011718/.

Check Your Compliance with These Stark Standards

In the meantime, make sure you're abiding by Stark Law regulations. Parts of Stark were enacted in 1989, but in its current form, the following are considered designated health services, according to CMS:

• Clinical laboratory services;
• Physical therapy services;
• Occupational therapy services;
• Outpatient speech-language pathology services;
• Radiology and certain other imaging services;
• Radiation therapy services and supplies;
• Durable medical equipment and supplies;
• Parenteral and enteral nutrients, equipment, and supplies;
• Prosthetics, orthotics, and prosthetic devices and supplies;
• Home health services;
• Outpatient prescription drugs; and
• Inpatient and outpatient hospital services.

According to CMS' website on Physician Self-Referral, the Stark Law, as it stands:

1. Prohibits a physician from making referrals for certain designated health services (DHS) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment, or compensation), unless an exception applies.

2. Prohibits the entity from presenting or causing to be presented claims to Medicare (or billing another individual, entity, or third-party payer) for those referred services.

3. Establishes a number of specific exceptions and grants the Secretary the authority to create regulatory exceptions for financial relationships that do not pose a risk of program or patient abuse.