Elimination of Stark “On-Site” Interpretation Requirement

From the American Health Lawyers Association:

Under the current Stark rules, the exception for professional interpretation services when the referring physician has an investment interest in the entity to which he refers—and which bills for the Medicare/Medicaid service—is the "physician services" exception available to physician group practices. When an independent contractor radiologist performs a Stark DHS service (such as the professional component of a radiology procedure) for a Medicare/Medicaid patient that is billed by the self-referring physician's group practice, the physician services exception requires that the performance of DHS services by the independent contractor radiologist must be provided on the group practice's premises. Under existing Stark requirements, if the radiologist performs the reads for a study from a remote location for a Medicare or Medicaid patient that was referred by an investing physician, the independent contractor radiologist must bill separately for the interpretation services provided since the physician practice would violate the Stark Law if it billed for the services.

CMS has now amended the Stark regulations through the 2008 Medicare Physician Fee Schedule Final Rule put on display November 1 to clarify that a physician or group practice does not violate the Stark Law when that physician or practice "bills Medicare for the technical or professional component of a diagnostic test for which the anti-markup provision is applicable in accordance with 414.50 of this chapter and section 30.2.9 of the CMS Internet-Only Manual, publication 100-04, Claims Processing Manual, Chapter 1 (general billing requirements)." As a result, if an independent contractor radiologist performs reading services off-site from the referring physician's practice, the referring physician will now be able to bill for the professional component services without violating the Stark Law. However, any claims submitted to the Medicare program for the independent contractor radiologist's services provided will now be subject to the anti-markup prohibition. Thus, although the referring physician may bill for the off-site services, the physician cannot profit from those services with respect to Medicare patients.

Should the referring group contract with a local radiology group to read studies for Medicare and Medicaid patients on-site, those services may be reassigned to the referring physician group without application of the anti-markup requirement. Because Stark rules govern the arrangement, the independent contractor must have a direct contractual arrangement with the referring physician group pursuant to the new Stark II, Phase III regulations (Federal Register; September 5, 2007.).

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