Stark II Analysis and
Summary
General Exceptions Protecting Ownership,
Compensation or Both, continued
The final rule generally repeats the statutory exception
for DHS furnished to enrollees of risk contract HMOs and certain other
specified prepaid health care organizations that have entered into contracts
with HCFA to offer such services pursuant to statutory mandates. HCFA
clarifies that the exception not only protects referrals by physicians for DHS
to a specified prepaid plan, but also protects referrals to downstream
providers and suppliers furnishing these services under a contract with a
prepaid plan. HCFA also has provided for a corresponding exception for
so-called risk sharing arrangements, which is discussed in V below. Medicaid
managed care arrangements will be addressed in Phase II of the rulemaking.
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HCFA has defined DHS in the final rule to exclude
services paid by Medicare as part of a composite payment for a group of
services, unless the DHS category is itself paid under a composite rate (e.g.,
inpatient or outpatient hospital services). Thus, while the Stark I exception
for clinical laboratory services furnished in an ASC, ESRD facility, or
hospice remains for services included in the ASC rate, the ESRD composite
rate, or the hospice per diem rate, the Phase I rule does not need a
comparable exception for other DHS services.
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In the final rule, HCFA provides for a new exception for
academic medical centers, to permit referrals from a physician to an academic
medical center if certain conditions are met. First, the referring physician
must: (a) be a bona fide employee of a component of the academic medical
center on a full-time or substantial part-time basis; (b) be licensed to
practice medicine in the state; (c) have a bona fide faculty appointment at
the affiliated medical school; and (d) provide either substantial academic or
clinical teaching services for which he or she receives compensation as part
of his or her employment relationship with the center.
In addition, the total compensation paid for the
previous 12-month period from all academic medical center components to the
referring physician must be set in advance, must not exceed fair market value
in the aggregate for the services provided, must not be determined in a manner
that takes into account the volume or value of any referrals or other business
generated between the parties, and must not violate the anti-kickback statute.
Further, the academic medical center must ensure that:
(a) all transfers of money between components of the center support the
missions of teaching, indigent care, research, or community service; (b) the
relationship of the center's components are set forth in a written agreement;
and (c) all money paid to a referring physician for research is used solely
for research.
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The final rule provides for a new exception for
prosthetic and DME implants that are: (a) furnished by the referring physician
or member of the referring physician's group practice in a Medicare-certified
ASC with which the referring physician has a financial relationship; (b)
implanted in the patient during a surgical procedure performed in the same ASC
as where the implant was furnished; (c) furnished pursuant to an arrangement
that does not violate the anti-kickback statute; and (d) billed and claimed in
accordance with federal and state laws and regulations.
HCFA devised this exception to permit physicians to
furnish implants in connection with surgeries performed in an ASC in which
they have an ownership interest, recognizing that the new definition of DHS
would not render this arrangement permissible because implants are not
included in the bundled ASC facility rate.
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The final rule provides for an exception for EPO and
other specifically listed dialysis-related outpatient prescription drugs that
are furnished in or by an ESRD facility, under an arrangement that does not
violate the anti-kickback statute, and in accordance with Federal and state
billing and claims submission laws and regulations. For purposes of the rule,
the term "furnished" is defined to mean that the drugs are either
administered or dispensed to a patient in or by the ESRD facility, even if
furnished at home. "Dialysis-related drugs" are defined as drugs
required for the efficacy of dialysis.
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Another new exception is available for preventive
screening tests, immunizations, and vaccines that are covered by Medicare,
identified by CPT and HCPCS codes, subject to HCFA-mandated frequency limits,
and paid by Medicare on a fee schedule. In addition, the arrangement for the
provision of these tests, immunizations, and vaccines must not violate the
anti-kickback statute, and billing and claims for these items must be in
accordance with applicable law and regulations. HCFA's stated reason for
issuing this exception is to implement Congress' intent to provide preventive
care for Medicare beneficiaries, and because it believes there is a low risk
of fraud or abuse associated with the provision of items that are subject to
frequency limits.
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The final rule permits physicians to furnish eyeglasses
or contact lenses to patients following cataract surgery in accordance with
the Medicare coverage and payment provisions for the furnishing of such items.
As with most of the other exceptions in this category, the eyeglasses or
contacts must be furnished under an arrangement that does not violate the
anti-kickback statute. Billing and claims submission for these items must
comply with applicable laws and regulations. In providing for this exception,
HCFA reasons that there is little risk of under or over-utilization because
Medicare covers only one pair of eyeglasses or contacts after cataract
surgery, and Medicare pays fixed amounts for these items regardless of their
actual cost.
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