Health Care Reform Alert: Stark Law Update: CMS Finalizes Rule Regarding Disclosure Requirements for Certain In-Office Ancillary Services

In its 2011 annual Physician Fee Schedule update (“2011 PFS”), posted November 2, 2010 on its website,1 the Centers for Medicare & Medicaid Services (CMS) finalized disclosure requirements for the in-office ancillary services exception to the prohibition on physician self-referral mandated by the Affordable Care Act (ACA). CMS commonly uses its annual PFS regulatory process—a publication required by the physician fee schedule law—to make changes to the self-referral, or “Stark Law,” provisions. For example, each year the PFS regulation provides the yearly list of those services that are specifically identified as “designated health services” (DHS) under the Stark Law.

Section 1877(b)(2) of the Social Security Act (the “Act”),2 entitled “In-office Ancillary Services,” sets forth the exception that permits a physician to order and provide DHS in the office, provided that certain criteria are met. The requirements are described at 42 C.F.R. § 411.355(b).

Section 6003 of ACA amends section 1877(b)(2) of the Act by creating a new disclosure requirement for in-office ancillary services pertaining to certain high-cost “advanced imaging services.” Specifically, section 6003 provides that, with respect to referrals for magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), and any other DHS to be later specified, a referring physician must inform a patient in writing at the time of the in-office referral that the patient may obtain the service from another person, and must also provide the patient with a list of other suppliers who furnish the service in the area where the patient resides.

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