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Disclosure Requirements for In-Office Imaging Services

Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.

The recently-enacted Patient Protection and Affordable Healthcare Act, H.R. 3590 (the "Act") expands the requirements for compliance with the federal Stark law exception for in-office ancillary services.  The Stark law prohibits a physician who has a direct or indirect financial relationship with an entity from making referrals to that entity for the furnishing of designated health services (DHS) for which payment otherwise may be made under Medicare, unless an exception is satisfied.  For physicians and groups who furnish DHS within their practices, the most commonly relied-upon Stark exception is the in-office ancillary services exception. 

Section 6003 of the Act amends the in-office ancillary services to now require that when a physician refers a patient for MRI, CT, or PET services, the referring physician must (a) inform the patient in writing, at the time of the referral, that the patient may obtain the referred services from a person other than the referring physician, a physician in the same group practice as the referring physician, or an individual directly supervised by the referring physician or another physician in the group practice, and (b) provide the patient with a written list of suppliers who furnish such services in the area in which the patient resides.

The language of this section of the Act indicates that this new disclosure requirement is effective for services provided after January 1, 2010, although from a practical standpoint such requirement became effective on March 23, 2010 (the date of enactment of the Act).  Unfortunately, immediate compliance with the new disclosure requirement is made difficult by (a) certain ambiguities within the language of the new disclosure requirement, and (b) potential liability created by the required disclosure of other suppliers of the referred services.  Specifically, the Act fails to clarify whether the “area” in which a patient resides means the city, county, region, state or other geographic area in which the patient resides.  The Act also fails to specify what the “written list of suppliers” must contain, which raises the additional issues of whether a simple listing of the names of a few suppliers within the applicable “area” will suffice, or whether the list must identify all known suppliers within the applicable “area” along with their contact information.  In addition, the requirement that the referring physician provide a list of other suppliers of the referred services could subject the referring physician to subsequent liability or issue relating to the quality of the services rendered by such other suppliers or the inability of the patient to obtain reimbursement for services rendered by such other suppliers.

Section 6003 of the Act contemplates that regulations will be issued by the Secretary of Health and Human Services (the “Secretary”) to implement the new disclosure requirement, with the hope being that such regulations will address the above-referenced ambiguities and that such regulations will not expand the disclosure requirement to other imaging services which fall into the category of DHS, which discretion is afforded the Secretary by the Act.  Since the Secretary is also charged with the responsibility of ensuring compliance with the new disclosure requirement, there is also the hope that the Secretary will use its discretion to delay enforcement, at least until corresponding regulations are issued.
 
However, there is uncertainty on when physicians and their medical practice entities may become subject to sanctions under the Stark Law for failing to satisfy this disclosure requirement and, thus, in the interests of caution, physicians should seriously consider providing written notice as set forth hereinabove to their Medicare patients when referring them for MRI, CT or PET services to be performed in their practices.

If your practice provides MRI, CT or PET services, you should contact our office to determine how the above-referenced disclosure requirements apply to your practice and how to implement these required disclosures.

NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.

This information provided by Attorney Jason F. Haupt (jhaupt@kwgd.com) at the law firm of Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.  Feel free to contact your attorney at the firm or Attorney Jason F. Haupt with questions at 330.497.0700.

 
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