Medicare Compliance & Reimbursement

Beware of satellite offices that don't practice medicine.

Physicians who are sending out referrals for services such as X-rays, scans or medical equipment could be missing out on justified reimbursement.

How? Thanks to last year's changes in the Stark II  self-referral rule, it's easier than ever to provide "ancillary services," which include tests as well as durable medical equipment, prosthetics, orthotics and supplies.

Until last year's "Phase II" Stark regulations, physicians couldn't provide items of DMEPOS in the office - except for wheelchairs, canes and crutches, which a patient might need to get home. But in the preamble to last year's regulation, the Centers for Medicare and Medicaid Services said that if a physician provided other DMEPOS items personally, it didn't count as a referral.

In other words, if the physician directly provides the DMEPOS items to a patient, then he or she can argue that "I'm not referring it, I'm doing it," says Wayne Miller with the Compliance Law Group in Los Angeles.
 
"As long as the physician is involved in every aspect of the provision of the service," it's not a referral, explains Neal A. Cooper with Hall Render Killian Heath & Lyman in Indianapolis, IN. This means staff can't do the education or fitting of the device.

"Physicians are prescribing specific items of DME and only furnishing them in situations where they have the equipment in their hand and hand it to the patient," Cooper explains. But it's difficult for a physician to hand a hospital bed to a patient, he notes.

Patients can benefit from receiving some items of DMEPOS directly from the physician, because they can receive better education and have a greater likelihood of using the devices, Cooper points out.

"I've seen this a lot with sleep practices," which provide continuous positive airway pressure devices to patients, notes Miller.

In other words, physicians can provide X-rays or other services out of a separate office as long as physicians perform services other than the ancillary services there.

"The main idea of the exception is that you run the practice and the secondary service out of the same place," so a certain amount of non-ancillary physician services need to happen in the satellite office, Miller explains. "If the doctor is simply there to read X-rays, that may not be enough to meet the standards. You have to see patients."

One concern: The satellite office must be part of a medical group that a physician has created.

If the doctors working in a satellite office are independent contractors instead of employees of the practice, then the office may not appear to be part of your group, according to Miller.