The Impact of the Finalized Modifications to the Stark Law

Transcription

1 The Impact of the Finalized Modifications to the Stark Law Revisions and Updates to the Physician Self-Referral Law Finalized in CY 2016 Physician Fee Schedule November 19, 2015 Kristin M. Bohl

2 Before we begin... Reminder that phone lines are muted Direct your questions to the Chat box or the Q&A box (to host/presenters) we ll respond via after the event Any questions offline please Sign up for Healthcare News 2

3 Today s presenter Kristin Bohl Annapolis 3

4 Overview Final changes published in Federal Register on November 16, Federal Register 70866, Includes 2 new exceptions Clarifications and revisions Practical impact of changes 4

5 Recruitment Exception To address shortage of primary care services New exception at (x) Permits a hospital, FQHC, or RHC to provide assistance to a physician to employ, contract with or otherwise engage an Nonphysician Practitioner (NPP) under a compensation arrangement NPPs include: PAs, NPs, CNSs, CNM, Social workers and clinical psychologists To provide primary care or mental health care services 5

6 Recruitment (cont d) Limits remuneration to the physician at 50 percent of the compensation to be paid to the NPP Limit of two years of assistance to employ or contract with NPP Three year limitation on the frequency of a hospital's, FQHC's or RHC's use of the exception for the same physician Requires that substantially all or at least 75 percent of the NPP's services to the physician's patients be primary care or mental health care services Available only for NPPs who either become bona fide employees or independent contractors directly with the physician or group receiving remuneration from the hospital 6

7 Timeshare Lease Exception To ensure adequate access to needed specialty care created new exception at (y) Arrangements that involve the use of premises, equipment, personnel, items, supplies or services by physicians who do not require or are not interested in a traditional office space lease arrangement These leases do not "transfer dominion and control but rather confer a privilege to use (during specified periods of time) the premises, equipment, personnel, items, supplies, and services that are the subject of the arrangement Allows certain flat fees, time-based formulas and "usage" fees that are not tied to patient referrals Does NOT allow percentage of revenue formulas or certain per unit of service fees Cannot be conditioned on referrals from lessee 7

8 Timeshare (cont d) Requirements include: Used predominantly to provide E/M services Any equipment provided is located in the same building where the E/M services are furnished, is not used to provide DHS other than DHS incidental to, and provided at the time of, E/M services for the patient, Does NOT cover timeshare leases of advanced imaging, radiation therapy, or laboratory equipment (other than equipment used to perform CLIA-waived laboratory tests) 8

9 Clarifications and Revisions CMS has received many Self-referral Disclosure Protocol (SRDP) submissions based on actual or potential violations of writing requirement Provided clarity on writing requirement and policy guidance on writing, 1-year minimum, and signature requirements Reduced regulatory burden to except certain holdover arrangements 9

10 Writing Requirements Clarified this requirement by standardizing term in compensation exceptions CMS substituted the word arrangement instead of agreement or writing No requirement that arrangement is documented in a single, formal contract Collection of documents may satisfy writing Cannot rely on State contract law Not new policy or interpretation Can be used to analyze current arrangements that predate the rule 10

11 Writing (cont d) Must ask whether the contemporaneous writings would permit a reasonable person to verify that the arrangement complied with an applicable exception at the time a referral is made To satisfy exception, a signature is required on a contemporaneous writing documenting the arrangement Both parties do not have to sign every document in the collection of documents Collection of documents can consider: Board meeting minutes Documents authorizing payments for certain services Hard copy and electronic written communication between parties Fee schedules for specified services Check requests or invoices identifying items or services provided, dates, rate of compensation Timesheets documenting services performed Call coverage schedules Accounts payable or receivable records documenting the date and rate of payment, reason for payment Checks issued for items, services or rent 11

12 One Year Term Certain exceptions include one year term CMS does not require that a formal contract or other writing contain an explicit one year term provision Can satisfy requirement if arrangement, as a matter of fact, lasts for one year This is current policy of CMS and can be applied to pre-existing arrangements 12

13 Holdover Certain exceptions already contain 6 month holdover provisions (Rental of Office Space, Rental of Equipment, Personal Services) CMS finalized proposal to allow indefinite holdovers if certain safeguards are met Holdover must continue on same terms and conditions as original arrangement Must satisfy fair market value throughout the holdover term This provision is effective January 1,

14 Signature Requirements Previously parties had 90 days to obtain signatures if lack of signatures was inadvertent CMS recognized parties might require 90 days to obtain all signatures once it is known signatures are missing Retains limitation that this can only be used once every 3 years for the same physician 14

15 Takes into Account Applies consistent terminology for application of the volume or value standard in compensation exceptions of Remove ambiguity related to interpretation of different volume or value standards in provisions in Stark regulations 15

16 Remuneration Stark definition of remunerations excludes provision of items, services, or supplies that are used solely to collect, transport, process, or store specimens or to order or communicate test results Clarified that item must be used solely for one or more of the purposes listed 16

17 Stand in the Shoes CMS clarified that only physicians with ownership or investment interests in their physician organizations and those that voluntarily stand in the shoes of their organizations stand in the shoes for purposes of the signature requirement For all purposes other than signature requirement, all physicians including employees and independent contractors are considered parties to the compensation arrangement 17

18 Split billing arrangements Split billing occurs when A physician makes use of a hospital s resources such as "examination rooms, nursing personnel, and supplies" when treating hospital patients, The hospital bills the appropriate payor for these resources, and The physician bills the payor "for his or her professional fees only" CMS stated it does not believe these arrangements involve remuneration between the parties Physician and the DHS entity do not provide items, services, or other benefits to one another The physician provides services to the patient and bills the payor for his or her services, and the DHS entity provides its resources and services to the patient and bills the payor for the resources and services." 18

19 Retention Payment Underserved areas Corrects the regulation text to reflect regulatory intent of Phase III Previously appeared to permit retention payments that only considered a part of the physician s income over the prior 24-month period and not CMS intended entire 24-month period 19

20 Geographic Area FQHC or RHC New definition at (e) The lowest number of contiguous or noncontiguous zip codes from which the FQHC or RHC draws at least 90 percent of its patients Determined on an encounter basis 20

21 Thank you. Kristin M. Bohl CALIFORNIA COLORADO CONNECTICUT DELAWARE GEORGIA MARYLAND MASSACHUSETTS MICHIGAN NEVADA NEW JERSEY NEW YORK PENNSYLVANIA TEXAS VIRGINIA WASHINGTON, D.C. With 375 attorneys in a full range of practices, LeClairRyan is an entrepreneurial firm providing business counsel and client representation in matters of corporate law and litigation. 21

22 Disclaimer This slide show provides general information and is not legal advice and should not be used or taken as legal advice for specific situations. You should consult legal counsel before taking any action or making any decisions concerning the matters in this show. This communication does not create an attorney-client relationship between LeClairRyan, A Professional Corporation, and the recipient. Copyright 2015, LeClairRyan, A Professional Corporation. All rights reserved unless otherwise noted by guest presenters. 22