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CMS RULING-Stark II prohibits a physician from making a referral to an…
CMS RULING-Stark II prohibits a physician from making a referral to an entity for the furnishing of "designated
health services" (“DHS”) covered by Medicare if the physician (or an immediate family member
of the physician) has a financial relationship with that entity, unless a statutory exception exists
PHASE I
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the definitions of key terms, including “group practice” and “designated health services
the general exceptions that apply to both ownership and compensation relationships,
including the in-office ancillary services exception and a regulatory exception for
post-cataract eyewear
EXCEPTION UNDER STARK II=ophthalmologists can refer their Medicare cataract patients to optical shops owned
by their group practice
The arrangement for furnishing the eyewear does not violate the federal antikickback law, and and billing and claims submission for the eyewear complies with all federal and
state laws and regulations.
Next check Anti-kickback-If the retail shop is wholly owned by a medical practice-there is no anti-kickback liability risk. Risk arises if ownership is by opthal or optos not in the same group practice.
the Phase I final rules created an exception for indirect and oral referrals, which
Phase II retained.
PHASE II
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the remaining provisions of the statute, including exceptions for ownership and investment interests and compensation arrangements such as personal service agreements and space and equipment leases, reporting requirements, and sanctions;
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additional new regulatory exceptions, including an exception for professional courtesy.
In office ancillary services exception for referrals of a group practice to a wholly owned optical shop-must meet location, billing and supervision requirements.
2 Ophtals that own optical shop can have other members refer to optical shop under cataract exception-but anti-kickback applies-meaning no separate payment or inducement for the referral
Stark II applies only to program referrals by physicians to
an entity with which the physician has a financial relationship. Therefore, if the physician does
not specifically refer the patient to a particular entity, the referral prohibition should not apply.
HMO Exception- referrals of Medicare HMO patients by an ophthalmologist under contract with that HMO
for the furnishing post-cataract eyeglasses or contacts by an optical shop in which the physician has an ownership interest would not violate Stark II as long as the provision of the eyeglasses or contacts were part of the covered services required to be provided by the physician under the agreement.
A/B/Echo Scan-not a self referral if performed by treating opthal. Need to otherwise fall under ancillary services exception or rural area exception.
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