In an attempt to reduce physician self-referral patterns, a federal bill would narrow the definition for in-office ancillary services that are exempt from the Stark Law.
The Stark Law prohibits physicians from referring Medicare patients to entities with which there is a direct or indirect financial link. This includes home health services, prescription drugs and hospital services. The law has an exception, however, for in-office ancillary services.
But new legislation would prohibit advanced imaging, pathology services, radiation therapy and physical therapy services from falling under the in-office ancillary services exception.
Reps. Jackie Speier (D-Calif.) and Jim McDermott, MD (D-Wash.), introduced the bill in the House after recent federal audits showed an increase in the rate of self-referred services, according to the report. A report by the Government Accounting Office in September 2012 found the number of advanced imaging services ordered by physicians increased when the services were performed in the referring physician's office.
If adopted, the legislation would prohibit, for example, a physician ordering advanced imaging services for a Medicare beneficiary if the services are performed in the ordering physician's offices. Referrals of low-end imaging, such as X-rays or ultrasounds, would still fall within the in-office ancillary services exception.
The bill would also require an enhanced review from CMS of "non-ancillary services" to identify those that are at high-risk for Stark Law noncompliance. This enhanced review would include the use of prepayment reviews, claims audits, focused medical review or computer algorithms.
The bill would also create higher penalties for referrals of "non-ancillary services" by imposing civil monetary penalties that are greater than the penalties currently authorized for other violations of the Stark Law.
Thirty-two associations representing medical professionals and practice administrators have voiced opposition to federal legislation. The American College of Surgeons, American Medical Association and American Medical Group Association, among others, sent a letter to lawmakers earlier this month saying the bill "would prohibit all these services in an office setting, force patients to receive services in a new and unfamiliar setting, increase costs, present significant barriers to appropriate screenings and treatments and make healthcare less accessible."
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