Monday, May 24, 2021
Medical groups that have division-based or service-level approaches to physician compensation should spend their summer evaluating their models in light of Stark Law revisions that go into effect on January 1, 2022. The revisions, seen by CMS as a clarification of original intent, will effectively prohibit distributions of profits from designated health services, or DHS, on a service-by-service basis.
Background
The physician self-referral law or Stark Law prohibits a physician from referring a patient to an entity with which the physician (or an immediate family member) has a financial relationship, for the furnishing of DHS including lab, imaging, and hospital inpatient and outpatient services for which payment otherwise may be made under Medicare or Medicaid, unless an exception applies. Physician group practices commonly rely on the in-office ancillary services exception (IOAS) to protect referrals for DHS among physicians within the practice or
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HCCA’s Healthcare Compliance Essentials Workshop is a four-day virtual event for those who are new to the compliance profession. The content is designed to help you develop and improve your compliance skills. Our instructors are industry leaders that will guide you through core subject areas and help you build a foundation for your compliance career.
These workshops are limited to 150 participants, so register as early as possible to reserve your spot!
Attendees will have the opportunity to earn live Compliance Certification Board (CCB)® continuing education units (CEUs) from the convenience of their own home or office.
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Standards and procedures
In
United States ex rel. Roshan v. E. Tex. Med. Ctr., 2020 U.S. Dist. LEXIS 252092, 2020 WL 8918651 (E.D. Tex. (Nov. 24, 2020)), a Texas federal court partially dismissed a relator’s claim alleging the defendants engaged in various billing and referral practices that violated the False Claims Act (FCA), the Stark Law, and Anti-Kickback Statute (AKS). While dismissing certain of the relator’s claims for failure to plead with the requisite particularity, the court allowed the case to proceed on the allegations concerning a single practice purchase compensating the seller for “future referrals” and pressure on the employee relator himself to refer more hospital-based procedures. This case serves as reminder that healthcare providers should always be cautious when discussing patient referrals, particularly when negotiating financial arrangements with physicians.
Beginning Jan. 1, 2022, the Centers for Medicare and Medicaid Services (CMS) will enforce new Stark Law
1 requirements for physician compensation models in group practices. Group practices that rely on generating revenues through intra-group referrals of “Designated Health Services” (e.g., clinical laboratory services, therapy services, imaging services, outpatient prescription drugs, durable medical equipment, etc.), including for ancillary services billed under the In-Office Ancillary Services exception, should start planning now to ensure that their compensation plans – specifically, their productivity bonuses and profit-sharing plans – will remain in compliance with the Stark Law. The Stark Law is a strict liability statute, meaning even a technical misstep in a compensation plan can make the group’s Designated Health Services (DHS) non-billable under Medicare. Accordingly, it is important that group practices ensure continued compliance when the 2022 requirements bec