PPACA and the In-Office Ancillary Exception

October 15, 2010, 10:00 AM

The Patient Protection and Affordable Care Act (PPACA) has added a new requirement to the in-office ancillary exception to the Stark Law for those practitioners using the exception to refer patients for certain diagnostic imaging services. Under this new requirement, which will become effective as of January 1, 2011, a physician who refers a patient for MRI, CT or PET services, must inform the patient in writing at the time that the referral is made that the patient may obtain the MRI, CT or PET services from an alternate provide other than the referring physician or the referring physicians group practice. In addition, the new rule requires that the referring physician provide the patient with a list of alternate providers from which the patient may receive the MRI, CT or PET services.

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule in July that set forth the proposed requirements for implementing this new rule regarding certain diagnostic imaging services. In its proposed rule, CMS has proposed that the referring physician for MRI, CT or PET must (i) inform the patient in writing that the patient may receive the services from an alternate provider, (ii) provide the patient with a list of such alternate providers, along with such other providers address, phone number and distance from the referring physicians office, (iii) obtain the patients signature at the time that the disclosures are given, and (iv) ensure that the disclosures are written in a manner in which the patient can reasonably understand.

With regard to the list of alternative providers of the services, CMS has proposed that referring physicians provide a list of ten (10) other providers of MRI, CT, or PET services within a twenty-five (25) mile radius of the referring physician. Certain exceptions are made for those providers who do not have ten (10) other providers within a twenty-five (25) mile radius. The rule will not be effective until January 1, 2011, and CMS will issue its final rule, which will undoubtedly contain additional clarifying information with respect to implementation of the rule. Kaufman & Canoles' Health Care Practice Group will continue to monitor the situation and stay abreast of any additional requirements set forth in the final rule. The proposed rule can be obtained from the Federal Register, Volume 75, page 40140. --Aaron J. Ambrose