Dec 01

Stark and personally performed services

The physician self-referral prohibition (Stark) regulations exempt from the definition of referral "any designated health service personally performed or provided by the referring physician. A designated health service is not personally performed or provided by the referring physician if it is performed or provided by the referring physician ifit is performed or provided by any other person, including, but not limited to, the referring physician's employees, independent contractors, or group practice members." 42 CFR 411.351.

The rule makes no distinction between the professional component and the technical component of designated health services. However, you should note that the rule does emphasize that the service does need to be personally performed by the physician in order for it to fall outside of the definition of referral. In the commentary to Phase I of the Stark II rule, the agency explicitly discussed the issue of designated health services provided incident-to a physician's services and declined to include incident-to services as personally performed services for the purpose of the Stark regulation. This decision has not been changed by Phase II or Phase III. The commentary, located at 66 FR871, explains:

Services performed by others are reasonably considered to be performed as a result of a "request." Moreover, the statutory language in section 1877(h)(4)(B)(i) of the Act indicates that the Congress considered there to be a difference between personally performed services and services performed by others. On balance, we have chosen to include services performed by others, including a physician's employees in the definition of referral. We are concerned that a blanket rule exempting services performed by a physician's employees from the definition of "referral" could, in some circumstances, undermine the intent of section 1877 of the Act.

Given this explicit discussion, it is clear that CMS intended to distinguish between services actually personally performed by a physician and services provided by his/her employees. Thus, services that are actually personally performed by the physician, be they professional or technical, would generally fall outside of the definition of referral. Those services provided by the physician's employees at the behest of the physician would constitute a referral

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