OIG's office again shows more bark than bitePhysicians subject to a new federal law taking effect on Jan.1 that will bar self-referral of Medicare patients to outpatientdiagnostic imaging centers may not have to worry about being hauledinto
Physicians subject to a new federal law taking effect on Jan.1 that will bar self-referral of Medicare patients to outpatientdiagnostic imaging centers may not have to worry about being hauledinto court, at least for the time being.
Regulators who staff the enforcement branch of Medicare's administrativeagency say it may be impossible in many cases to enforce the lawwithout implementing regulations. Publication of these clarifyingrules may be years away. In addition, a physician survey designedas the centerpiece for enforcement is behind schedule, and Republicanrumblings about a moratorium on new regulations may pose anotherobstacle to enforcing the law.
Still, it will be illegal as of Jan. 1 for physicians to refertheir Medicare patients to freestanding imaging services in whichthey have an ownership interest. Whether they can escape prosecutiondepends on the severity of the violation.
"It is difficult to enforce the statute unless the regulationsare in place, except when you truly have an egregious situationwhere the facts alone can be used to make a prima facie case,"said Jim Patton, investigator in the Office of Civil Fraud andAdministrative Adjudication in the Health Care Financing Administration.
While Patton's statement suggests a reprieve, physicians whoown interests in imaging centers are not off the hook, accordingHarvey A. Yampolsky, partner in the Washington DC-based firm ofArent, Fox and Kintner. There is little ambiguity about the legalityof self-referral arrangements for imaging services outside hospitalsand group practices.
Stark II prohibits physicians from referring their Medicare orMedicaid patients to diagnostic imaging services in which theyhold an ownership interest, as well as from receiving paymentsbased on their Medicare referral volume. Violators are subjectto fines of up to $15,000 per incident and could be banned fromMedicare/Medicaid participation.
Ambiguities in the law involve indirect business relationshipsbetween physicians and hospitals and issues surrounding the in-officeancillary service exemption.
Recent experience suggests that regulations may not be finalizedfor several years. Implementing regulations for Stark I are stillpending, two years after the ban against self-referral to clinicallaboratories became law.
Implementation of Stark II also revolves around a survey of the400,000 physicians participating in Medicare, according to CherrillFarnsworth, chief executive of TME, a Houston imaging center chain.The HCFA survey requires physicians to describe ownership interestsheld in imaging centers and other medical services supported byMedicare or Medicaid.
The questionnaires, which were to be mailed by Oct. 15, werestill in draft form as of last week, according to Farnsworth.The survey could be ready for distribution as early as March 1995,she said.
More potential delays may arise from the new Republican Congressionalmajority. Some legislators are calling for a 100-day moratoriumon new regulations, including those applying to Stark I and II.Full implementation of the laws could be delayed several moremonths, Yampolsky said.
Many physicians are behaving as if the law will go into fulleffect in January, according to Gary I. Fields, an attorney withProskauer, Rose, Goetz and Mendelsohn in New York City. Fieldsis seeing many center officials scramble to come into compliance.As a fallback position, some services have forbidden their physicianinvestors from referring patients to them.
Due to the confusion, a good-faith effort toward compliance maybe all that is needed to stay out of harm's way, according toFields.