Your SlideShare is downloading. ×
PowerPoint
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Introducing the official SlideShare app

Stunning, full-screen experience for iPhone and Android

Text the download link to your phone

Standard text messaging rates apply

PowerPoint

494
views

Published on

Published in: Health & Medicine, Business

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
494
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
5
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Permissible PhysicianPermissible Physician RelationshipsRelationships Thomas ConleyThomas Conley Arnstein & Lehr LLPArnstein & Lehr LLP August 6, 2004August 6, 2004
  • 2. Arnstein & Lehr LLP 2 Issues ChecklistIssues Checklist  Stark LawStark Law  Anti-Kickback StatuteAnti-Kickback Statute  Medicare/Medicaid Reimbursement RulesMedicare/Medicaid Reimbursement Rules  Illinois Health Care Worker Self-Referral ActIllinois Health Care Worker Self-Referral Act  Corporate Practice of Medicine ProhibitionCorporate Practice of Medicine Prohibition  Fee Splitting ProhibitionFee Splitting Prohibition  Antitrust LawsAntitrust Laws  Tax ConcernsTax Concerns  LicensureLicensure  Certificate of NeedCertificate of Need
  • 3. Arnstein & Lehr LLP 3 Stark Law ProhibitionStark Law Prohibition Unless an exception applies, aUnless an exception applies, a physician may not refer a Medicare orphysician may not refer a Medicare or Medicaid patient for “designated healthMedicaid patient for “designated health services” to an entity with which theservices” to an entity with which the physician or his or her “immediatephysician or his or her “immediate family member” has a direct or indirectfamily member” has a direct or indirect financial relationship.financial relationship.
  • 4. Arnstein & Lehr LLP 4 Stark Law AnalysisStark Law Analysis  Applies to physicians and their “ImmediateApplies to physicians and their “Immediate Family Members,”Family Members,”  If they make a “Referral,”If they make a “Referral,”  For a “Designated Health Service,”For a “Designated Health Service,”  When Medicare, Medicaid or otherWhen Medicare, Medicaid or other government reimbursement is involved,government reimbursement is involved,  And there is a “Financial Relationship”And there is a “Financial Relationship” between the physician and the entitybetween the physician and the entity receiving the referral,receiving the referral,  When all the requirements of an exceptionWhen all the requirements of an exception have not been met.have not been met.
  • 5. Arnstein & Lehr LLP 5 Penalties for Stark ViolationsPenalties for Stark Violations  Civil monetary penalties up toCivil monetary penalties up to $15,000 per prohibited service/billing$15,000 per prohibited service/billing  Civil monetary penalties up toCivil monetary penalties up to $100,000 per circumvention scheme$100,000 per circumvention scheme  Payment denial/recoupmentPayment denial/recoupment  Medicare/Medicaid exclusionMedicare/Medicaid exclusion  Loss of Medical LicenseLoss of Medical License
  • 6. Arnstein & Lehr LLP 6 Immediate Family MemberImmediate Family Member DefinitionDefinition “Immediate family member” means husband or wife; birth or adoptive parent, child, or sibling; stepparent, stepchild, stepbrother, or stepsister; father-in-law, mother-in-law, son-in-law, daughter-in- law, brother-in law, or sister-in-law; grandparent or grandchild; and spouse of a grandparent or grandchild.
  • 7. Arnstein & Lehr LLP 7 Definition of ReferralDefinition of Referral Referral means either (i) a request by a physician for, or the certifying or recertifying of the need for, any designated health services or (ii) a request by a physician or establishment of a plan of care that includes the provision of designated health services. Designated health services personally performed or provided by a physician will not be considered a referral.
  • 8. Arnstein & Lehr LLP 8 DESIGNATED HEALTHDESIGNATED HEALTH SERVICESSERVICES  Clinical laboratory servicesClinical laboratory services  PT, OT and speech-language pathology servicesPT, OT and speech-language pathology services  Radiology and certain other imaging servicesRadiology and certain other imaging services (includes MRI, CAT, and Ultrasound)(includes MRI, CAT, and Ultrasound)  Radiation therapy services and suppliesRadiation therapy services and supplies  Durable medical equipment and suppliesDurable medical equipment and supplies  Parenteral and enteral nutrients, equipment andParenteral and enteral nutrients, equipment and suppliessupplies  Prosthetics, orthotics and prosthetic devices andProsthetics, orthotics and prosthetic devices and suppliessupplies  Home health servicesHome health services  Outpatient prescription drugsOutpatient prescription drugs  Inpatient and outpatient hospital servicesInpatient and outpatient hospital services
  • 9. Arnstein & Lehr LLP 9 Designated Health ServicesDesignated Health Services Defined by HCPCs and CPTsDefined by HCPCs and CPTs Certain designated health services areCertain designated health services are defined by HCPCs and CPT Codesdefined by HCPCs and CPT Codes • Clinical Laboratory ServicesClinical Laboratory Services • Physical Therapy, Occupational Therapy andPhysical Therapy, Occupational Therapy and Speech Pathology ServicesSpeech Pathology Services • Radiology and certain other imaging servicesRadiology and certain other imaging services • Radiation Therapy ServicesRadiation Therapy Services • Current List of DHS by code found at:Current List of DHS by code found at: http://www.cms.hhs.gov/medlearn/04addendumf_withchttp://www.cms.hhs.gov/medlearn/04addendumf_withc n.pdfn.pdf
  • 10. Arnstein & Lehr LLP 10 ReferralsReferrals Certain Specialties ExcludedCertain Specialties Excluded Referrals by-Referrals by- Pathologist to Clinical Diagnostic LaboratoryPathologist to Clinical Diagnostic Laboratory Radiologists for Diagnostic Radiology ServicesRadiologists for Diagnostic Radiology Services Radiation Oncologist for Radiation TherapyRadiation Oncologist for Radiation Therapy Requirements:Requirements: • Must result from consultation request fromMust result from consultation request from another physiciananother physician • Must be performed or supervised by theMust be performed or supervised by the pathologist, radiologist or radiation oncologistpathologist, radiologist or radiation oncologist or member of their group practice.or member of their group practice.
  • 11. Arnstein & Lehr LLP 11 ReferralsReferrals Imputation of ReferralImputation of Referral A physician’s prohibited financial relationshipA physician’s prohibited financial relationship with an entity will not be imputed to thewith an entity will not be imputed to the physician’s group or the group’s members orphysician’s group or the group’s members or staff if:staff if: • the physician does not direct the groupthe physician does not direct the group practice, members or staff to make thepractice, members or staff to make the referral, orreferral, or • the physician does not control the referralsthe physician does not control the referrals made by the group practice, members ormade by the group practice, members or staff.staff. 42 CFR §411.353(a)42 CFR §411.353(a)
  • 12. Arnstein & Lehr LLP 12 DHS –Excluded ServicesDHS –Excluded Services  X-Ray, fluoroscopy and ultrasonic procedures thatX-Ray, fluoroscopy and ultrasonic procedures that involve the insertion of a needle, catheter, tubeinvolve the insertion of a needle, catheter, tube or probe through the skin or into a body orificeor probe through the skin or into a body orifice including diagnostic angiography (including diagnostic angiography (e.g.,e.g., cardiaccardiac caths and endoscopies)caths and endoscopies)  Radiology procedures that are integral to theRadiology procedures that are integral to the performance of, and performed during,performance of, and performed during, nonradiological medical proceduresnonradiological medical procedures  Nuclear medicine (but not radiation therapy)Nuclear medicine (but not radiation therapy)  Certain preventative screening services (Certain preventative screening services (e.g.e.g.,, certain mammography and stress tests)certain mammography and stress tests)  DHS paid as part of a composite rate (DHS paid as part of a composite rate (e.g.e.g., ASC), ASC)
  • 13. Arnstein & Lehr LLP 13 DHS –Excluded ServicesDHS –Excluded Services Lithotripsy is excluded but the requiredLithotripsy is excluded but the required hospital participation in the billing forhospital participation in the billing for lithotripsy services creates a financiallithotripsy services creates a financial relationship between the for the physicianrelationship between the for the physician provider and the hospital which mustprovider and the hospital which must satisfy an exception for the physiciansatisfy an exception for the physician provider to refer patients to the hospitalprovider to refer patients to the hospital for in-patient and out-patient services.for in-patient and out-patient services.
  • 14. Arnstein & Lehr LLP 14 In-Office Ancillary ServicesIn-Office Ancillary Services ExceptionException The in-office ancillary servicesThe in-office ancillary services exception excludes from the Starkexception excludes from the Stark Prohibition Services which meet theProhibition Services which meet the following three (3) requirements:following three (3) requirements: 1. Performance Requirement1. Performance Requirement 2. Billing Requirement2. Billing Requirement 3. Building Requirement3. Building Requirement
  • 15. Arnstein & Lehr LLP 15 In-Office Ancillary ServicesIn-Office Ancillary Services Performance RequirementPerformance Requirement 1. Performance Requirement1. Performance Requirement The services must be personally performed by:The services must be personally performed by:  The referring physician,The referring physician,  A physician in the Group Practice, orA physician in the Group Practice, or  An individual “directly supervised” by oneAn individual “directly supervised” by one of these physiciansof these physicians
  • 16. Arnstein & Lehr LLP 16 In-Office Ancillary ServicesIn-Office Ancillary Services Billing RequirementBilling Requirement 2. Billing Requirement2. Billing Requirement The services must be billed by either:The services must be billed by either:  The physician performing or supervising theThe physician performing or supervising the service.service.  The group practice in which the performing orThe group practice in which the performing or supervising physician is a member.supervising physician is a member.  The group practice for which the supervisingThe group practice for which the supervising (not performing) physician is an independent(not performing) physician is an independent contractor provided compensation compliescontractor provided compensation complies with Stark and reassignment prohibition.with Stark and reassignment prohibition.  Entity wholly owned by performing orEntity wholly owned by performing or supervising physician or by that physician’ssupervising physician or by that physician’s group practice.group practice.
  • 17. Arnstein & Lehr LLP 17 In-Office Ancillary ServicesIn-Office Ancillary Services Building RequirementBuilding Requirement 3.3. Building RequirementBuilding Requirement The services must be furnished in:The services must be furnished in: ““same building” in which referring physician furnishessame building” in which referring physician furnishes services unrelated to the designated health serviceservices unrelated to the designated health service oror A building that is used by any practice for the “centralizedA building that is used by any practice for the “centralized provision” of the group’s designated health services.provision” of the group’s designated health services.
  • 18. Arnstein & Lehr LLP 18 In-Office Ancillary ServicesIn-Office Ancillary Services Same Building DefinitionSame Building Definition The "same building" is defined as a structure with,The "same building" is defined as a structure with, or combination of structures that share, a singleor combination of structures that share, a single street address as assigned by the U.S. Postalstreet address as assigned by the U.S. Postal Service. The Stark Regulations define a buildingService. The Stark Regulations define a building very narrowly excluding:very narrowly excluding: •Exterior spaces (lawns, court yards, driveways andExterior spaces (lawns, court yards, driveways and parking lots),parking lots), •Interior loading docks and parking garages, andInterior loading docks and parking garages, and •Services provided in mobile vans or trailers.Services provided in mobile vans or trailers.
  • 19. Arnstein & Lehr LLP 19 In-Office Ancillary ServicesIn-Office Ancillary Services Same Building DefinitionSame Building Definition The same building definition further requires that the Lessee's use of the space in the building meet one of four possible use standards to ensure that the services are truly ancillary to an in-office visit and are for the convenience of the patient.
  • 20. Arnstein & Lehr LLP 20 In-Office Ancillary ServicesIn-Office Ancillary Services Same Building DefinitionSame Building Definition The first use standard is that the practice have office hours in the building for 35 hours per week and a "member of the group" be present in the office at least 30 hours per week (the office may be closed for vacations and holidays), with some of those hours being spent performing services unrelated to the performance of DHS; or
  • 21. Arnstein & Lehr LLP 21 In-Office Ancillary ServicesIn-Office Ancillary Services Same Building DefinitionSame Building Definition The second use standard is that the practice have office hours in the building at least 8 hours per week, the referring physician be present in that building at least 6 hours per week (the office may be closed for vacations and holidays), with some of those hours being spent performing services unrelated to the performance of DHS, and the referred patient must be a regular patient of the practice; or
  • 22. Arnstein & Lehr LLP 22 In-Office Ancillary ServicesIn-Office Ancillary Services Same Building DefinitionSame Building Definition The third use standard is that the referring physician is present and orders the test during a patient visit in the building, the group practice has office hours in the building at least 8 hours per week, and the referring physician or a "member of the group" is present in that building at least 6 hours per week (the office may be closed for vacations and holidays), with some of those hours being spent performing services unrelated to the performance of DHS; or
  • 23. Arnstein & Lehr LLP 23 In-Office Ancillary ServicesIn-Office Ancillary Services Same Building DefinitionSame Building Definition The fourth use standard is that a "member of the group" must be present when the DHS is furnished, the practice has office hours in the building at least 8 hours per week, and the referring physician or a "member of the group" is present in that building at least 6 hours per week (the office may be closed for vacations and holidays), with some of those hours being spent performing services unrelated to the performance of DHS.
  • 24. Arnstein & Lehr LLP 24 In-Office Ancillary ServicesIn-Office Ancillary Services Centralized Building DefinitionCentralized Building Definition As an alternative to providing services in the same building, a group practice may provide the services in a centralized building. A centralized building is all or part of a building, including mobile vehicles, vans or trailers, which is owned or leased by the group practice and used exclusively by the group practice 24 hours a day, 7 days a week, for a term of not less than 6 months.
  • 25. Arnstein & Lehr LLP 25 In-Office Ancillary ServicesIn-Office Ancillary Services Group Practice DefinitionGroup Practice Definition Definition of Group PracticeDefinition of Group Practice • Single legal entity of at least 2 physicians;Single legal entity of at least 2 physicians; • Unified business;Unified business; • Each member furnishes substantially the full rangeEach member furnishes substantially the full range of services he routinely provides;of services he routinely provides; • Average of 75% of total patient care furnishedAverage of 75% of total patient care furnished through group;through group; • Income distributed through previously agreedIncome distributed through previously agreed methods and compensation not based on volume ormethods and compensation not based on volume or value of referrals – Productivity Bonuses Allowed;value of referrals – Productivity Bonuses Allowed; andand • Members conduct 75% of physician-patientMembers conduct 75% of physician-patient encountersencounters
  • 26. Arnstein & Lehr LLP 26 Options for ParticipationOptions for Participation There are basically three options:There are basically three options: • Form a Group PracticeForm a Group Practice • Create a Shared FacilityCreate a Shared Facility • Lease ArrangementLease Arrangement
  • 27. Arnstein & Lehr LLP 27 Shared FacilityShared Facility  Shared Designated Health Service Facilities UsingShared Designated Health Service Facilities Using The In-office Ancillary ExceptionThe In-office Ancillary Exception • At least one member of the referring physician’s practiceAt least one member of the referring physician’s practice must work in the building furnishing required level ofmust work in the building furnishing required level of services unrelated to the furnishing of DHS andservices unrelated to the furnishing of DHS and performing substantially the full range services theperforming substantially the full range services the physician routinely provides.physician routinely provides. • Supervision of DHS procedure as required by MedicareSupervision of DHS procedure as required by Medicare and Medicaid rules, not direct supervision.and Medicaid rules, not direct supervision. • Independent contractor physician may supervise.Independent contractor physician may supervise. • If an independent contractor physician performs service,If an independent contractor physician performs service, then only that physician or his group may bill.then only that physician or his group may bill. • Cannot rely on centralized building provision.Cannot rely on centralized building provision.
  • 28. Arnstein & Lehr LLP 28 Stark Exceptions Creating PossibilitiesStark Exceptions Creating Possibilities For Physician Financial RelationshipFor Physician Financial Relationship  Shared DHS FacilitiesShared DHS Facilities • Joint ownership of facilities -- not a separate entityJoint ownership of facilities -- not a separate entity --with expense sharing agreement--with expense sharing agreement oror Table top leaseTable top lease • Independent contractors may supervise but be mindfulIndependent contractors may supervise but be mindful of the group practice 75% physician-patient encountersof the group practice 75% physician-patient encounters testtest • Each group bills for its patients itself under the in-officeEach group bills for its patients itself under the in-office ancillary exceptionancillary exception
  • 29. Arnstein & Lehr LLP 29 Stark Exceptions Creating PossibilitiesStark Exceptions Creating Possibilities For Physician Financial RelationshipFor Physician Financial Relationship Shared DHS FacilitiesShared DHS Facilities ““What will not be protected by Phase I of this rulemakingWhat will not be protected by Phase I of this rulemaking are a number of part-time, intermittent arrangements thatare a number of part-time, intermittent arrangements that functionally are nothing more than shared off-site facilities.functionally are nothing more than shared off-site facilities. Many of these part-time, off-site ancillary servicesMany of these part-time, off-site ancillary services arrangements are inconvenient for patients both as toarrangements are inconvenient for patients both as to location and time, and are created by physicians principallylocation and time, and are created by physicians principally to capture revenue rather than to enhance patient care.”to capture revenue rather than to enhance patient care.” 66 Fed Reg 881 (January 4, 2001)66 Fed Reg 881 (January 4, 2001)
  • 30. Arnstein & Lehr LLP 30 Stark Exceptions Creating PossibilitiesStark Exceptions Creating Possibilities For Physician Financial RelationshipFor Physician Financial Relationship Rental of Space and Equipment are excludedRental of Space and Equipment are excluded if the arrangement:if the arrangement: 1.1. Is set forth in a signed writing identifying theIs set forth in a signed writing identifying the property;property; 2.2. Has a term of at least one year;Has a term of at least one year; 3.3. Does not include more space than reasonableDoes not include more space than reasonable and necessary for legitimate business purposesand necessary for legitimate business purposes and provides for exclusive use while being used;and provides for exclusive use while being used; 4.4. Sets rent in advance, consistent with fair marketSets rent in advance, consistent with fair market value, and does not consider the volume or valuevalue, and does not consider the volume or value of referrals; andof referrals; and 5.5. Has commercially reasonable terms.Has commercially reasonable terms.
  • 31. Arnstein & Lehr LLP 31 Stark Exceptions Creating PossibilitiesStark Exceptions Creating Possibilities For Physician Financial RelationshipFor Physician Financial Relationship Personal Service Arrangements are excludedPersonal Service Arrangements are excluded if the arrangement:if the arrangement: 1.1. Is set forth in a signed writing;Is set forth in a signed writing; 2.2. Identifies all services provided;Identifies all services provided; 3.3. Does not include more services than reasonableDoes not include more services than reasonable and necessary for legitimate business purposes;and necessary for legitimate business purposes; 4.4. Has a term of at least one year;Has a term of at least one year; 5.5. Sets compensation in advance, consistent withSets compensation in advance, consistent with fair market value, and does not consider thefair market value, and does not consider the volume or value of referrals; andvolume or value of referrals; and 6.6. Does not involve counseling or promotion ofDoes not involve counseling or promotion of illegal conduct.illegal conduct.
  • 32. Arnstein & Lehr LLP 32 Stark Exceptions Creating PossibilitiesStark Exceptions Creating Possibilities For Physician Financial RelationshipFor Physician Financial Relationship Fair market value compensation is excludedFair market value compensation is excluded if the arrangement:if the arrangement: 1.1. Is set forth in a signed writing;Is set forth in a signed writing; 2.2. Identifies the specific items or services andIdentifies the specific items or services and specific timeframes;specific timeframes; 3.3. Sets compensation in advance, consistent withSets compensation in advance, consistent with fairfair market value, does not consider the volume or valuemarket value, does not consider the volume or value of referrals and does not change between terms ifof referrals and does not change between terms if less than 1 year;less than 1 year; 4.4. Has commercially reasonable terms;Has commercially reasonable terms; 5.5. Does not violate the anti-kickback provisions ofDoes not violate the anti-kickback provisions of the Social Security Act; andthe Social Security Act; and 6.6. Does not involve counseling or promotion ofDoes not involve counseling or promotion of illegal conduct.illegal conduct.
  • 33. Arnstein & Lehr LLP 33 Anti-Kickback StatuteAnti-Kickback Statute Prohibits a person from knowingly and willfullyProhibits a person from knowingly and willfully offeringoffering,, acceptingaccepting,, solicitingsoliciting oror receivingreceiving anyany remuneration, directly or indirectly, overtly orremuneration, directly or indirectly, overtly or covertly, in cash or in kind for:covertly, in cash or in kind for: (1)(1) Referring individual for item or serviceReferring individual for item or service paid for by Federal healthcare program; orpaid for by Federal healthcare program; or (2)(2) Purchasing, leasing, ordering, arrangingPurchasing, leasing, ordering, arranging for, or recommending purchase, lease, or order offor, or recommending purchase, lease, or order of any good, facility, service, or item paid for byany good, facility, service, or item paid for by Federal healthcare program.Federal healthcare program.
  • 34. Arnstein & Lehr LLP 34 Anti-Kickback Statute PenaltiesAnti-Kickback Statute Penalties  Civil:Civil: • Up to $50,000 per illegal “remuneration”Up to $50,000 per illegal “remuneration” • Permissive exclusion from federal healthcarePermissive exclusion from federal healthcare programsprograms  Criminal:Criminal: • Felony fines up to $25,000Felony fines up to $25,000 • Prison up to 5 yearsPrison up to 5 years • Mandatory exclusion from Federal healthcareMandatory exclusion from Federal healthcare programsprograms
  • 35. Arnstein & Lehr LLP 35 Anti-Kickback Safe Harbors that CreateAnti-Kickback Safe Harbors that Create Possibilities for Physician FinancialPossibilities for Physician Financial RelationshipsRelationships Investment InterestsInvestment Interests  Not more than forty percent (40%) of interests heldNot more than forty percent (40%) of interests held by investors in position to make or influence referralsby investors in position to make or influence referrals to entityto entity  Investment terms same whether investor can orInvestment terms same whether investor can or cannot make or influence referrals to entitycannot make or influence referrals to entity  No requirement that investors refer to entityNo requirement that investors refer to entity  Not more than forty percent (40%) of entity’s grossNot more than forty percent (40%) of entity’s gross revenue derived from investor referralsrevenue derived from investor referrals  No loans to investors that can make referrals to theNo loans to investors that can make referrals to the entityentity  Returns must be proportional to capital investmentsReturns must be proportional to capital investments
  • 36. Arnstein & Lehr LLP 36 Anti-Kickback Safe Harbors that CreateAnti-Kickback Safe Harbors that Create Possibilities for Physician FinancialPossibilities for Physician Financial RelationshipsRelationships Space/Equipment RentalsSpace/Equipment Rentals  Written lease with at least one (1) yearWritten lease with at least one (1) year termterm  Aggregate rent set in advance, consistentAggregate rent set in advance, consistent with FMV in arm’s length transactions andwith FMV in arm’s length transactions and not determined in a manner that takesnot determined in a manner that takes into account volume or value of referralsinto account volume or value of referrals or business otherwise generated betweenor business otherwise generated between the partiesthe parties
  • 37. Arnstein & Lehr LLP 37 Anti-Kickback Safe Harbors that CreateAnti-Kickback Safe Harbors that Create Possibilities for Physician FinancialPossibilities for Physician Financial RelationshipsRelationships Personal Services/ManagementPersonal Services/Management ContractsContracts  Written agreement with term of atWritten agreement with term of at least one (1) yearleast one (1) year  Aggregate fee set in advance,Aggregate fee set in advance, consistent with FMV in arm’s lengthconsistent with FMV in arm’s length transactions and does not take intotransactions and does not take into account volume or value of referralsaccount volume or value of referrals or business generated between theor business generated between the partiesparties
  • 38. Arnstein & Lehr LLP 38 Illinois Health Care WorkerIllinois Health Care Worker Self-Referral ActSelf-Referral Act Health Care Worker Self-Referral ActHealth Care Worker Self-Referral Act • Applies to all “health care workers” not justApplies to all “health care workers” not just physiciansphysicians • Applies only when a health care worker has anApplies only when a health care worker has an investment interest, either equity and debt, ininvestment interest, either equity and debt, in an entity which performs health care servicesan entity which performs health care services • Applies to all services, not just designatedApplies to all services, not just designated health services but does not apply to goodshealth services but does not apply to goods • Applies to all payors, not just Medicare orApplies to all payors, not just Medicare or MedicaidMedicaid
  • 39. Arnstein & Lehr LLP 39 Illinois Health Care WorkerIllinois Health Care Worker Self-Referral ActSelf-Referral Act The term “Health Care Worker” includes anyThe term “Health Care Worker” includes any individual licensed under the laws of this State toindividual licensed under the laws of this State to provide health services including but not limitedprovide health services including but not limited to dentists; dental hygienists; nurses;to dentists; dental hygienists; nurses; occupational therapists; optometrists;occupational therapists; optometrists; pharmacists; physical therapists; physicians;pharmacists; physical therapists; physicians; physician assistants; podiatrists; clinicalphysician assistants; podiatrists; clinical psychologists; clinical social workers; speech-psychologists; clinical social workers; speech- language pathologists and audiologists; orlanguage pathologists and audiologists; or hearing instrument dispensershearing instrument dispensers
  • 40. Arnstein & Lehr LLP 40 Illinois Health Care WorkerIllinois Health Care Worker Self-Referral ActSelf-Referral Act  Seven Exceptions:Seven Exceptions: • Group PracticeGroup Practice • Office PracticeOffice Practice • Direct participation and personal involvementDirect participation and personal involvement • Investments in licensed hospitalsInvestments in licensed hospitals • Community Need as determined by HealthCommunity Need as determined by Health Facilities Planning BoardFacilities Planning Board • Publicly traded entity with $30,000,000 in netPublicly traded entity with $30,000,000 in net assetsassets • Referrals under an HMO contractReferrals under an HMO contract
  • 41. Arnstein & Lehr LLP 41 Illinois Health Care WorkerIllinois Health Care Worker Self-Referral ActSelf-Referral Act ““Group Practice” means an entity in which: (1)Group Practice” means an entity in which: (1) each health care worker who is a member oreach health care worker who is a member or employee or an independent contractor providesemployee or an independent contractor provides substantially the full range of services that thesubstantially the full range of services that the health care worker routinely provides; (2) thehealth care worker routinely provides; (2) the services of the health care workers are providedservices of the health care workers are provided through the group, and payments received forthrough the group, and payments received for health services are treated as receipts of thehealth services are treated as receipts of the group; and (3) the overhead expenses and thegroup; and (3) the overhead expenses and the income from the practice are distributed byincome from the practice are distributed by methods previously determined by the groupmethods previously determined by the group..
  • 42. Arnstein & Lehr LLP 42 Illinois Health Care WorkerIllinois Health Care Worker Self-Referral ActSelf-Referral Act Office Practice means the facility or facilities atOffice Practice means the facility or facilities at which a health care worker, on an ongoing basis,which a health care worker, on an ongoing basis, provides or supervises the provision ofprovides or supervises the provision of professional health services to individuals. Underprofessional health services to individuals. Under the Office Practice Exception:the Office Practice Exception: • The Health Care Worker does not have to performThe Health Care Worker does not have to perform substantially the full range of services in thesubstantially the full range of services in the facilityfacility • The facility may billThe facility may bill • But services must be performed on an on-goingBut services must be performed on an on-going basisbasis  Direct Provision of Services exception eliminatesDirect Provision of Services exception eliminates requirement that the health care worker performrequirement that the health care worker perform services on an on-going basisservices on an on-going basis
  • 43. Arnstein & Lehr LLP 43 Illinois Health Care WorkerIllinois Health Care Worker Self-Referral ActSelf-Referral Act  TrapsTraps • Don’t rely on Stark exceptionDon’t rely on Stark exception • Watch out for structuring with independentWatch out for structuring with independent contractors because of Stark’scontractors because of Stark’s “substantially all” and “75% patient“substantially all” and “75% patient encounters” tests for group practices.encounters” tests for group practices. • Hospital exception is in the licensed entityHospital exception is in the licensed entity • No passive investors who refer - InvestorsNo passive investors who refer - Investors should be part of the care team or office inshould be part of the care team or office in the facilitythe facility
  • 44. Arnstein & Lehr LLP 44 Illinois Health Care WorkerIllinois Health Care Worker Self-Referral ActSelf-Referral Act  What Can You Do?What Can You Do? • Shared FacilitiesShared Facilities • Whole Hospital VenturesWhole Hospital Ventures • ASTC with surgeonsASTC with surgeons • Diagnostic Radiology with RadiologistsDiagnostic Radiology with Radiologists • Compensation ArrangementsCompensation Arrangements • LeasesLeases
  • 45. Arnstein & Lehr LLP 45 Purchased Diagnostic TestPurchased Diagnostic Test  If a physician or group performs a test, itIf a physician or group performs a test, it may bill and collect for the test.may bill and collect for the test.  If a physician interprets but does notIf a physician interprets but does not perform a test, the physicians may bill forperform a test, the physicians may bill for purchased tests but may not markup thepurchased tests but may not markup the charge and must accept the lowest of:charge and must accept the lowest of: • the Medicare fee schedule amountthe Medicare fee schedule amount • the physician’s actual chargethe physician’s actual charge • the supplier’s net chargethe supplier’s net charge
  • 46. Arnstein & Lehr LLP 46 Purchased InterpretationsPurchased Interpretations  Interpretations performed by an independent contractor may be billed only if the interpretation is performed in the physician’s office or meets the following conditions: • the group is independent of the physician or group that ordered the test; • the group is independent of the physician or group that interpreted the test; • the group either accepts assignment or doesn't accept assignment for both the technical and professional components; and • the physician interpreting the test does not see the patient.
  • 47. Arnstein & Lehr LLP 47 Supervision of ProcedureSupervision of Procedure  All diagnostic x-ray and otherAll diagnostic x-ray and other diagnostic tests must be furnisheddiagnostic tests must be furnished under the appropriate level ofunder the appropriate level of physician supervision 42 CFR 410.32physician supervision 42 CFR 410.32  Three levels of supervisionThree levels of supervision • GeneralGeneral • DirectDirect • PersonalPersonal
  • 48. Arnstein & Lehr LLP 48 Levels of SupervisionLevels of Supervision • General supervision means the procedure isGeneral supervision means the procedure is furnished under the physician's overall directionfurnished under the physician's overall direction and control, but the physician's presence is notand control, but the physician's presence is not required during the performance of the procedure.required during the performance of the procedure. • Direct supervision means the physician must beDirect supervision means the physician must be present in the office suite and immediatelypresent in the office suite and immediately available to furnish assistance and directionavailable to furnish assistance and direction throughout the performance of the procedure.throughout the performance of the procedure. • Personal supervision means a physician must be inPersonal supervision means a physician must be in attendance in the room during the performance ofattendance in the room during the performance of the procedurethe procedure
  • 49. Arnstein & Lehr LLP 49 Determining AppropriateDetermining Appropriate Level of SupervisionLevel of Supervision  The applicable level of supervision for a particularThe applicable level of supervision for a particular procedure can be found at:procedure can be found at: http://www.cms.hhs.gov/providers/pufdownload/rvudown.asphttp://www.cms.hhs.gov/providers/pufdownload/rvudown.asp  General Supervision is the minimum levelGeneral Supervision is the minimum level required for any diagnostic testrequired for any diagnostic test  Physician assistants legally authorized to performPhysician assistants legally authorized to perform a test may provide direct or personal supervisiona test may provide direct or personal supervision with a general level of physician supervisionwith a general level of physician supervision  Direct and personal supervision requiresDirect and personal supervision requires physician supervision at the specified levelphysician supervision at the specified level throughout the performance of the testthroughout the performance of the test
  • 50. Arnstein & Lehr LLP 50 Supervision ExceptionsSupervision Exceptions  Exceptions to the supervision requirementExceptions to the supervision requirement • Diagnostic mammography proceduresDiagnostic mammography procedures • Diagnostic tests personally furnished by aDiagnostic tests personally furnished by a qualified audiologistqualified audiologist • Diagnostic psychological testing servicesDiagnostic psychological testing services personally furnished by a clinical psychologistpersonally furnished by a clinical psychologist or a qualified independent psychologistor a qualified independent psychologist
  • 51. Arnstein & Lehr LLP 51 Supervision ExceptionsSupervision Exceptions  Exceptions to the supervision requirementExceptions to the supervision requirement (continued)(continued) • Diagnostic tests personally performed by aDiagnostic tests personally performed by a certified electrophysiologic clinical specialistcertified electrophysiologic clinical specialist • Diagnostic tests performed by a nurseDiagnostic tests performed by a nurse practitioner or clinical nurse specialistpractitioner or clinical nurse specialist • Pathology and laboratory procedures listed inPathology and laboratory procedures listed in the 80000 series of the CPTthe 80000 series of the CPT
  • 52. Arnstein & Lehr LLP 52 Independent DiagnosticIndependent Diagnostic Testing FacilitiesTesting Facilities  Under 42 CFR 410.33, to bill under the physician feeUnder 42 CFR 410.33, to bill under the physician fee schedule for the technical component of diagnostic tests,schedule for the technical component of diagnostic tests, other than clinical laboratory or pathology tests, a non-other than clinical laboratory or pathology tests, a non- hospital entity must enroll as an IDTF unless:hospital entity must enroll as an IDTF unless: • It is a physician practice that is owned, directly or indirectly, by oneIt is a physician practice that is owned, directly or indirectly, by one or more physicians or by a hospital;or more physicians or by a hospital; • The entity primarily bills for physician services and not for diagnosticThe entity primarily bills for physician services and not for diagnostic tests;tests; • It furnishes diagnostic tests primarily to patients whose medicalIt furnishes diagnostic tests primarily to patients whose medical conditions are being treated or managed on an ongoing basis byconditions are being treated or managed on an ongoing basis by one or more physicians in the practice; andone or more physicians in the practice; and • The diagnostic tests are performed and interpreted at the sameThe diagnostic tests are performed and interpreted at the same location where the practice physicians also treat patients for theirlocation where the practice physicians also treat patients for their medical conditionsmedical conditions
  • 53. Arnstein & Lehr LLP 53 Who Must Enroll as an IDTFWho Must Enroll as an IDTF  Entities independent of a physician office orEntities independent of a physician office or hospitalhospital  If the entity is not a provider-based part of aIf the entity is not a provider-based part of a hospital billing under its own billing number, thenhospital billing under its own billing number, then the entity is subject to the IDTF rulesthe entity is subject to the IDTF rules  Ambulatory Surgical Centers can bill only forAmbulatory Surgical Centers can bill only for separate diagnostic tests they perform outsideseparate diagnostic tests they perform outside scheduled hours of operation (see 42 CFRscheduled hours of operation (see 42 CFR §416.2) and then only as an IDTF§416.2) and then only as an IDTF
  • 54. Arnstein & Lehr LLP 54 Who Must Enroll as an IDTFWho Must Enroll as an IDTF  A physician practice may have to enroll as anA physician practice may have to enroll as an IDTF if a substantial portion of the business of aIDTF if a substantial portion of the business of a practice is to test patients from outside thepractice is to test patients from outside the practicepractice • The percentage of work for patients outsideThe percentage of work for patients outside the practice which would be considered athe practice which would be considered a substantial portion is not defined but may besubstantial portion is not defined but may be as low as 30% while anything over 50% isas low as 30% while anything over 50% is clearly substantialclearly substantial
  • 55. Arnstein & Lehr LLP 55 IDTF BillingIDTF Billing  A practice would bill using its billing number forA practice would bill using its billing number for the diagnostic tests performed on the practice’sthe diagnostic tests performed on the practice’s patients and under the IDTF number forpatients and under the IDTF number for diagnostic tests furnished to Medicarediagnostic tests furnished to Medicare beneficiaries who are not patients of the practicebeneficiaries who are not patients of the practice.  The supervision rules for the particular procedureThe supervision rules for the particular procedure continue to applycontinue to apply  Supervising physicians must be enrolled inSupervising physicians must be enrolled in MedicareMedicare
  • 56. Arnstein & Lehr LLP 56 IDTF CriteriaIDTF Criteria • The IDTF must have one or moreThe IDTF must have one or more supervising physicians who are responsiblesupervising physicians who are responsible for the direct and ongoing oversight of thefor the direct and ongoing oversight of the quality of the testing performed, the properquality of the testing performed, the proper operation and calibration of the equipmentoperation and calibration of the equipment used to perform tests, and the qualificationused to perform tests, and the qualification of nonphysician personnel who use theof nonphysician personnel who use the equipment.equipment. • The level of oversight supervision requiredThe level of oversight supervision required is general supervision unless the procedureis general supervision unless the procedure requires direct or personal supervision.requires direct or personal supervision.
  • 57. Arnstein & Lehr LLP 57 IDTF CriteriaIDTF Criteria • The supervising physician must evidenceThe supervising physician must evidence proficiency in the performance andproficiency in the performance and interpretation of each type of diagnosticinterpretation of each type of diagnostic procedure performed by the IDTF.procedure performed by the IDTF. • The IDTF must maintain documentation ofThe IDTF must maintain documentation of sufficient physician resources during all hourssufficient physician resources during all hours of operationsof operations • In the case of procedures requiring directIn the case of procedures requiring direct supervision, the supervising physician maysupervision, the supervising physician may oversee concurrent proceduresoversee concurrent procedures
  • 58. Arnstein & Lehr LLP 58 IDTF CriteriaIDTF Criteria  Nonphysician personnel must demonstrate theNonphysician personnel must demonstrate the basic qualifications to perform the tests andbasic qualifications to perform the tests and have training and proficiency as evidenced byhave training and proficiency as evidenced by licensure or certificationlicensure or certification  All procedures performed by the IDTF must beAll procedures performed by the IDTF must be specifically ordered in writing by the treatingspecifically ordered in writing by the treating physicianphysician  The carrier must conduct an initial site visit,The carrier must conduct an initial site visit, and may conduct follow-up visits, to assureand may conduct follow-up visits, to assure compliance with IDTF Standardscompliance with IDTF Standards
  • 59. Arnstein & Lehr LLP 59 IDTF and StarkIDTF and Stark  Although providing services for the IDTF, theAlthough providing services for the IDTF, the supervising physician’s oversight of the IDTFsupervising physician’s oversight of the IDTF benefits the practice, and, accordingly, suchbenefits the practice, and, accordingly, such services will be considered services for theservices will be considered services for the group for purposes of meeting Stark’sgroup for purposes of meeting Stark’s “substantially all” test for group practices“substantially all” test for group practices  As these patients are not patients of theAs these patients are not patients of the group, they are not counted for purposes ofgroup, they are not counted for purposes of Stark’s 75% physician-patient encountersStark’s 75% physician-patient encounters testtest
  • 60. Arnstein & Lehr LLP 60 Excluded from IDTFExcluded from IDTF Enrollment RequirementEnrollment Requirement  Radiology practices are excluded if:Radiology practices are excluded if: • The practice is owned by radiologists, a hospital, orThe practice is owned by radiologists, a hospital, or both;both; • The owner radiologists and any employed or contractedThe owner radiologists and any employed or contracted radiologists regularly perform physician services at theradiologists regularly perform physician services at the location where the diagnostic tests are performed;location where the diagnostic tests are performed; • The billing patterns of the enrolled entity indicate thatThe billing patterns of the enrolled entity indicate that the entity is not primarily a testing facility and that itthe entity is not primarily a testing facility and that it was organized to provide the professional services ofwas organized to provide the professional services of radiologists; andradiologists; and • A substantial majority of the radiological interpretationsA substantial majority of the radiological interpretations are performed at the practice location where theare performed at the practice location where the diagnostic tests are performeddiagnostic tests are performed
  • 61. Arnstein & Lehr LLP 61 Excluded from IDTF CriteriaExcluded from IDTF Criteria  Diagnostic MammographyDiagnostic Mammography  Diagnostic tests performed by a qualifiedDiagnostic tests performed by a qualified audiologistaudiologist  Diagnostic psychological testing servicesDiagnostic psychological testing services personally furnished by a clinicalpersonally furnished by a clinical psychologist or a qualified independentpsychologist or a qualified independent psychologistpsychologist  Diagnostic tests personally performed by aDiagnostic tests personally performed by a certified electrophysiologic clinicalcertified electrophysiologic clinical specialistspecialist
  • 62. Arnstein & Lehr LLP 62 Contact InformationContact Information Thomas ConleyThomas Conley 312/876-7809312/876-7809 TPConley@arnstein.comTPConley@arnstein.com Arnstein & Lehr LLPArnstein & Lehr LLP 120 South Riverside Plaza120 South Riverside Plaza Chicago, Illinois 60606Chicago, Illinois 60606 Fax (312) 876-0288Fax (312) 876-0288 www.arnstein.comwww.arnstein.com