New rules harbor varying ramifications for centers

Three recently released safe harbor regulations will have varyingeffects on imaging centers, depending on participation in managed-carenetworks. But the new federal guidelines could complicate contractsbetween physicians and preferred provider organizations.

The new safe harbors outline payment practices and other arrangementsthat do not violate Medicare and Medicaid fraud and abuse statutes.They join 10 existing guidelines introduced in 1991 by the InspectorGeneral of the Department of Health and Human Services.

One of the new rules protects waivers of copayments used bysome managed-care plans to attract new patients. Another new provisionrelates to waivers of copayments by hospitals for inpatient services,but applies specifically to beneficiaries in the Medicare Selectprogram.

But these safe harbors only apply if the managed-care networkhas a formal contract with either the Health Care Financing Administrationor a state health-care program.

A third safe harbor protects contractual relationships betweenhealth plans and providers, but stipulates several conditions.For health plans that do not have a contract with either HCFAor a state program, there are additional standards with whichthe network must comply.

Some of these conditions mandate that the managed-care plan:

• outline the physician's fee schedule and maintain thatschedule for the duration of the agreement;

• specify which party will file claims; and

• ensure that physicians do not make additional paymentclaims to Medicare or Medicaid.

Some managed-care networks have already called the new rulescounterproductive, because the incentive practices prohibitedby the safe harbors are commonly used by managed care. But formost imaging centers the regulations may have less relevance,according to Harvey A. Yampolsky, a partner in the Washington,DC, law firm of Arent, Fox, Kintner, Plotkin & Kahn.

Unless the center is affiliated with a recognized preferredprovider network, the rules and conditions do not apply, he said.

"Depending upon how the imaging facility operates, thesafe harbor may be of interest," he said. "But for manyimaging centers, including most of my clients, the new rules areirrelevant."

For individual physicians, however, the rules may mean increasedcomplications in landing managed-care contracts. The AmericanCollege of Radiology has not yet formulated a position on thenew rules, according to Thomas Greeson, internal legal counselfor the ACR.

"But we are looking at the whole issue of managed careand radiology practices very closely," he said.

Although the rules became effective in November, the IG hasextended the deadline for comments from January to March 4.

A SET OF 10 ADDITIONAL SAFE HARBORS was favorably reviewed bythe Office of Management and Budget in early January. Publicationhas been rescheduled for the end of the month, but Yampolsky predictsthe changing of the presidential guard will prompt further delays.

"There was hope that the new safe harbors would be pushedthrough by Jan. 20, not because it's political or partisan, butbecause it would be natural to hold off on signing them untilthe new people take office," he said. "It's conceivablethey could be postponed now for months."

The proposed safe harbors cover investment interests in ruralareas, ambulatory surgical centers, and group practices composedexclusively of active investors. They also address practitionerrecruitment, referral agreements for specialty services, and purchaseof group practices, among other arrangements.

Several of the proposed rules will incorporate a new definitionof physicians' extension of practice. Such a definition is criticalto determining what constitutes self-referral, Greeson said ata November symposium on imaging economics.

"Since 1991, the OIG (Office of the Inspector General)has tried to develop a safe harbor rule that would state whena physician could have an investment in a facility and providepatient care services that could be considered an extension ofhis or her practice," he said.

Such a definition was developed by the ACR and the AmericanMedical Association, and submitted to the OIG in October. It definesextension of practice as personal provision or supervision ofnecessary care services to an individual patient at a facilityoutside of the physician's office, in which the physician hasa financial interest, and requires that such care be within thephysician's area of competence and scope of practice.

Greeson predicted that the extent of practice provisions willmake proposed safe harbors important to watch.

"Although the extension of practice concept was initiallydeveloped for ambulatory surgical centers, it has implicationsfor imaging centers," he said. "Other proposed safeharbors relate to control and physician ownership of diagnosticimaging facilities, and structure of growth practices."