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And IDTF Prohibitions

[By Staff Reporters]

According to Robert James Cimasi MHA, ASA, AVA, CBA, CMP™ certain physician/hospital relationships referred to as “under arrangements” and “per click” leasing ventures have come under increasing regulatory scrutiny.

Definition

An under arrangement transaction occurs when the hospital contracts with a third party (typically a joint venture owned, at least in part, by physicians who may refer) to provide a hospital service, and the hospital then bills and is reimbursed by Medicare for those services and pays the supplier, or joint venture.  As the “entity” to which the physicians refer patients is the hospital, not the joint venture (i.e., the “entity” is deemed to be the entity that submits the reimbursement claim to Medicare) this type of “arrangement” is permitted under Stark.

Stark Revisions

However, buried in the July 2, 2007, 2008 Medicare Physician Fee Schedule proposed rule, CMS has proposed revisions to the Stark regulations that broaden the definition of “entity” to include the person or entity that performs the designated health services and would prohibit space and equipment lease arrangements where per-click payments are made to a physician lessor who refers patients to the lessee.  Although the proposed self-referral prohibitions (as well as arrangements where the physician is the lessee and rents space from a hospital) did not appear in the Final Rule, similar provisions are expected in 2008.

CMS has also passed restrictions related to independent diagnostic testing facility [IDTF] arrangements.

Assessment

For example, since January 1, 2008, IDTFs are no longer allowed to share practice locations, operations, and diagnostic testing equipment with other Medicare-enrolled providers, including leasing and subleasing agreements.

Conclusion

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• Dictionary of Health Economics and Finance
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• Dictionary of Health Insurance and Managed Care

Filed under: Ethics, Glossary Terms, Health Economics, Health Law & Policy | Tagged: "per click” leasing ventures, CMS, IDTF, independent diagnostic testing facilit, Medicare Physician Fee Schedule, per-click payments, Stark laws, under arrangements | Leave a comment »