HHS Issues Medicare ‘Self-Referral’ Final Rule
Under new Medicare rules issued yesterday by HHS, doctors may not refer Medicare patients to laboratories, suppliers, home health agencies and other companies with which they maintain a financial relationship, the AP/Philadelphia Inquirer reports. The regulations, slated to take effect next January, implement a law passed in 1993 to "clarify" which business interactions between physicians and other health care providers are "acceptable." According to studies by the HHS inspector general's office, when doctors maintain a financial stake in health care providers to which they refer patients, "excessive" use of these services results (Meckler, AP/Philadelphia Inquirer, 1/4). HHS Inspector General June Gibbs Brown said, "We believe this statute is a powerful deterrent to fraud and abuse. The regulation will be another strong step in the department's efforts to reduce waste, fraud and abuse in the Medicare program" (HHS release, 1/3). HHS Secretary Donna Shalala added, "We've taken a common sense approach to the law to prevent potentially abusive referrals while recognizing many legitimate business practices and financial arrangements." HHS issued the proposed rules in 1998 and received nearly 13,000 public comments (AP/Philadelphia Inquirer, 1/4). The department plans to issue a second final rule based on comments received on provisions of the proposed rule that are not addressed in yesterday's final rule, and also will address public comments on this week's final rule (HHS release, 1/3).
While outlining a variety of sanctions, including denial or refund of payment and civil monetary penalties, on "self-referrals," the new regulations also allow for some financial relationships between physicians and other groups to which they refer. For example, while doctors may not refer patients to providers that they "fully or partly" own, they may refer patients to providers, such as hospitals, from which they receive payments. But the law mandates in these cases that arrangements "cannot provide for more payment than doctors who do not refer patients receive." Certain "small gifts," such as tickets to sporting events, are not considered as compensation and are exempt from the rule. In addition, hospitals and other entities will not be deemed "guilty" of self-referral if they were not aware that they had an "indirect" financial relationship with a referring physician. Finally, services provided within physicians' offices and those provided by health plans are exempt from the new rules (AP/Philadelphia Inquirer, 1/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.