The informal, but final version of the 2011 Medicare fee schedule was released this week. It includes details about the notice that physician groups relying on the in-office ancillary exception to Stark will need to provide to patients who receive an MRI. (The rule also applies to CT and PET, but does not apply to plain film X-ray.)
The rule takes effect January 1. At the time that you tell the patient of the scan, you must provide the patient with written list of at least five other suppliers within 25 miles of your office location who can provide the service and tell the patient that he or she is free to obtain the scan from any location that he or she chooses. If there are fewer than five suppliers, you must list all of the suppliers. If there are no suppliers, no notice is required.
Note that the rule only requires you to provide notice of “suppliers”. This is a technical Medicare term referring to physician offices and Independent Diagnostic Testing Facilities (IDTFs). The rule does not require you to list hospitals, though you are free to do so. The notice must include the name, address and phone number of each supplier.
Since the notice must be provided at the time of the referral, the requirement is not met if you give the notice to every patient upon check-in or post it on a wall in your office. The notice must be given in writing, so when you notify of a patient of the need for a scan by phone, you must mail or e-mail the notice. You do not need to have the patient sign the notice (as the proposed rule required.)
There were several other changes from the proposed rule, such as limiting the number of other suppliers to five, rather than 10, and removing a requirement that you detail the distance to each facility.
The final rule also includes one very important change from the statutory provision. The statute suggested that the notice had to provide information about suppliers located in the area where the patient resides. The final rule makes it clear that the distance is calculated from the physician’s office.
The rule does not limit what you say in the notice. For example, you may include a statement that you are not endorsing any of the other faculties, and you may notify patients that it is possible that their insurance may not cover scans at the suppliers listed.
Any privately-owned physician group in an urban area that offers MRI relies upon the in-office ancillary exception, meaning it must provide the notice. In rural areas, there may be some situations where a physician does not rely on the in-office ancillary exception, but many rural practices do. These practices must provide the notice.
Finally, while many non-profits use other exceptions to Stark, it is important to note that the in-office ancillary exception offers some unique benefits, such as permitting physicians to be compensated for services incident to their services. Therefore, many non-profits may wish to consider providing the notice.
In case you are itching to see the text of the rule, found at 42 CFR 411.355(b)(7), here it is:
(7) Disclosure requirement for certain imaging services.
(i) With respect to magnetic resonance imaging, computed tomography, and positron emission tomography services identified as “radiology and certain other imaging services” on the List of CPT/HCPCS Codes, the referring physician must provide written notice to the patient at the time of the referral that the patient may receive the same services from a person other than one described in paragraph (b)(1) of this section. Except as set forth in paragraph (b)(7)(ii) of this section, the written notice must include a list of at least five other suppliers (as defined in §400.202 of this chapter) that provide the services for which the individual is being referred and which are located within a 25-mileradius of the referring physician’s office location at the time of the referral. The noticeshould be written in a manner sufficient to be reasonably understood by all patients and should include for each supplier on the list, at a minimum, the supplier’s name, address and telephone number.
(ii) If there are fewer than five other suppliers located within a 25-mile radius of the physician’s office location at the time of the referral, the physician must list all of the other suppliers of the imaging service that are present within a 25-mile radius of the referring physician’s office location. Provision of the written list of alternate suppliers will not be required if no other suppliers provide the services for which the individual is being referred within the 25-mile radius.
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