Medicare Compliance & Reimbursement

New CMS proposal could force you to scrap most imaging deals.

Medicare isn't just threatening to cut your payments by 9.9 percent next year--it's also considering making many of the most common physician arrangements illegal.

The result could be a scramble to scrap, or drastically revamp, many practices' joint ventures with other physicians or with hospitals, say experts. These changes to the Stark physician self-referral law are in the 2008 physician fee schedule proposed rule, and you have until Aug. 17 to comment.

Here are the sweeping changes the Centers for Medicare & Medicaid Services (CMS) wants to make:

Markups: CMS is considering banning any markups for purchased diagnostic tests. In other words, if your physician paid anyone else to perform an imaging scan, you couldn't charge Medicare more than you paid the person who performed the scan.

Per-click: CMS is considering banning payments on a "per-click" basis. That means if a group of physicians jointly owned an X-ray machine, they couldn't receive payments based on how much they used the machine. If a physician used the machine 20 percent of the time, the joint venture couldn't give that doctor 20 percent of the revenue.

This means "physicians will no longer be allowed to lease equipment to a hospital and have per-click lease payments generated by referrals from the physicians," explains attorney Clay Countryman with Kean Miller Hawthorne D'Armond McCowan & Jarman in Baton Rouge.

Under arrangement: CMS also wants to say that if physicians enter into a joint venture to provide services to a hospital, then the joint venture is the provider of those services, not the hospital. Since physicians can't send patients to any entity they own part of, they wouldn't be able to refer any patients to those joint ventures. These joint ventures would no longer fit into any exemptions to the law, unless they take place in rural areas.

These sorts of joint ventures to provide services to a hospital are known as "under arrangement," and consultants have been touting them as "the big gaping loophole in Stark law," says attorney William Maruca with Fox Rothschild in Pittsburgh, PA. Doctors can't invest in a joint venture and refer patients to it--except when it's "under arrangement" to a hospital. But now CMS wants to close that loophole for good.

Part-timers: Finally, the rule says any technicians who perform tests for you must be full-time employees--which could prevent you from having technicians work part-time for your practice. Otherwise, the test counts as a "purchased" test, and you can't charge Medicare more than you pay the technician, says attorney David Glaser with Fredrikson & Byron in Minneapolis, MN. CMS Spins 180 Degrees CMS is proposing to ban arrangements "that they explicitly permitted three or four [...]