By: Lyn S. Savoie
The Centers for Medicare and Medicaid Services (“CMS”) posted the final 2006 Physician Fee Schedule on November 1, 2005, thereby adopting the August 8, 2005 proposal to include diagnostic and therapeutic nuclear medicine services in two categories of designated health services that are subject to the federal physician self-referral statute (a.k.a., the “Stark Law”). This new change will prohibit physicians from referring patients to a facility where the physician (or an immediate family member) has a financial interest for listed nuclear medicine services, unless an exception applies. Of note, the final rule does not apply to the in-office exception that allows cardiologists to provide nuclear cardiac imaging in their offices.
Regarding existing arrangements, CMS states that existing facilities will have to comply with the new rule, rather than be grandfathered in. However, while the new fee schedule becomes effective January 1, 2006, the final rule extends the deadline for compliance with this change by one year – making the effective date January 1, 2007. “We believe this delay provides adequate notice to the general public and a reasonable length of time for physicians to divest any existing ownership interests or to restructure their financial relationships with nuclear medicine entities so that they comply with a statutory or regulatory exception . . . .”
In addition to impacting direct financial relationships with PET centers, the final rule also notes that a violation could also occur if a physician refers patients to a PET center that purchases radiopharmaceuticals from a company with which the referring physician has a financial relationship. According to CMS, the nature of the financial relationship will determine whether a Stark violation has occurred. Because the arrangement could constitute an indirect compensation arrangement between the referring physician and the PET center, the physician may not be able to refer to the center unless the arrangement complies with the indirect compensation arrangement exception.