A new Centers for Medicare & Medicaid Services advisory opinion may allow radiology practices greater flexibility in structuring their organizations and relationships, experts advised recently.
The Stark Law forbids docs from referring Medicare or Medicaid patients for imaging and other designated health services, if said referrer has a financial relationship with the entity. However, there’s an exception carved out for entities employing multiple physicians that qualify as a “group practice.”
In a recent advisory, CMS said this exception also applies to physician groups furnishing imaging and other services through wholly owned subsidiary practices that are separately enrolled in Medicare. The opinion provides greater leeway, potentially allowing physician practices to use subsidiaries for different markets or different payer arrangements, said Danielle Sloane, an attorney with Bass Berry & Sims.
The news is most meaningful for radiology practices that offer interventional services.
“For diagnostic-only practices where they generally receive referrals from outside treating physicians, this would not be as important. However, for any IR practices that are providing imaging, drugs or other services within their practice, it is noteworthy—particularly for those involved in consolidation transactions,” she told Radiology Business.
Bottom line, Sloane said, the advisory approves an entity that is enrolled in Medicare and billing as a physician practice to own other entities that are also enrolled and billing as physician practices. “However, CMS seems to thread this needle by calling the parent the ‘group practice’ and not the subsidiaries,” she added.
“It demonstrates CMS’ continued recognition that the healthcare industry is innovating, and the need for flexibility to foster that innovation,” Sloane said. “This is not likely to increase enforcement given it is a positive advisory. In other words, it outlines what is permissible and doesn’t highlight a problematic structure.”
You can read the full advisory opinion—written in response to an unnamed practice’s request—here, and find Nashville, Tennessee-based Bass Berry & Sims breakdown of the decision here.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.