Practice Management Alert

Navigate the 2008 twists and turns with this list

As a biller, your practice's compliance often falls upon your shoulders along with billing and collections duties. Keeping up on all the changes isn't easy.

If you-re still not up on the Stark III changes that came out in September 2007, you need to get up to speed fast to determine that your practice is compliant with the new laws. Take a look at this expert breakdown of the latest changes, and tackle any problems in your office before you and your physician fall victim to fraud charges.

Background: This group of strict regulations that prohibit physician self-referrals saw its third major set of revisions and interpretations go into effect Dec. 4, 2007, and even then, not all the loose ends were tied up.

Remember: For Medicare and Medicaid cases (and potentially other payers on the state level), Stark prohibits physicians from making a referral to a "designated health service" (DHS) with which the physician or an immediate family member of the physician has any type of financial relationship -- unless the DHS fully complies with one of Stark's many exceptions. A DHS can be anything from rehabilitation therapy services to imaging services or DME.

-Stand in the Shoes- Will Keep You on Your Toes

If you thought you were safe being one step away from a Stark-sticky situation, think again. Stark III declared a new "stand in the shoes" concept, which forces physicians in groups to be directly accountable for their group's financial arrangements.

How it works: "CMS has now collapsed the doctor and his group into one layer" as far as business arrangements go, says Linda Baumann, Esq, JD, with Arent Fox LLP in Washington, D.C. "So, for example, if a physician member of a group practice refers patients to a hospital, and the group contracts with the hospital, the physician now has to meet a direct compensation arrangement exception."

Before, the physician would likely have been safe under the indirect compensation arrangement analysis; in other words, she was safe as long as the group wasn't paying her based on the volume or value of her referrals to the hospital.

DME Services Still a Tricky Route

The "in-office ancillary exception" allows providers to perform certain ancillary services in-house for a physician. For example, rehab services can be provided in a physician's office under certain circumstances.

That exception, however, did not protect most durable medical equipment (DME). Nevertheless, some physicians provided DME in their offices thinking that the Stark Law was not implicated because the physician was "personally providing" the DME to the patient. And under the Stark Law, a personally performed service does not constitute a referral that triggers the-Stark prohibitions. But now, under Phase III, it is much more difficult to use this analysis.

Explanation: "If the doctor is personally providing the DME, that's okay," said Wayne J. Miller, Esq, with Compliance Law Group in Los Angeles, in the Eli-sponsored audioconference "The Latest Stark Law Essentials From the Expert: Nail -Phase 3- of the Final Rules." But that means the physician must be a certified supplier and do everything involved in supplying that DME, including the fitting, the training and ongoing support and maintenance, he added. "And CMS thinks it's unlikely that MDs will actually do this."

Want to Amend an Agreement? Not So Fast

If your physician is forming a space or equipment-lease contract with another provider, you can't afford to be wishy-washy on your financial terms. That's because-most Stark Law exceptions require a one-year term, and that compensation must be "set in advance."

Further, the Stark III preamble contains language insisting these requirements mean that parties who want to change the rental charges can't amend the contract to do so. First they have to terminate the existing agreement, and then they can-enter a new contract with the revised charges. However, they can't enter a new agreement until after the first year of the original lease term.

Bottom line: If you want to make amendments, the safest bet is not to make any until after year one, Miller says. Limit the amendments to non-compensation issues during the first year. "Financial modifications during the first year have to be carefully done because they could arguably be seen as changing because of the volume or value of referrals -- and that's a very dangerous thing to do," he said.

Luckily, Stark III introduced a six-month holdover period under the personal services exception to offer a grace period to those trying to renegotiate agreements within the correct timeframe. "For example, if your agreement was due to terminate Jan. 1, and you were having trouble negotiating a new agreement, you-d still be protected for six months, assuming you were proceeding on the same terms," Baumann says. This rule, which previously applied to space and equipment rentals, has been expanded to personal services as well under Phase III.

Heads up: CMS has just published new major Stark rules. Sign up for an audioconference where you-ll get the scoop from Miller: http://www.audioeducator.com/industry_conference.php?id=1282.