STARK AND REIMBURSEMENT: A DEEPER DIVE TO DEBUNK THE MYTHS. Alice G. Gosfield, Esquire Alice G. Gosfield and Associates, P.C.

Transcription

1 STARK AND REIMBURSEMENT: A DEEPER DIVE TO DEBUNK THE MYTHS I. Scope of Stark Alice G. Gosfield, Esquire Alice G. Gosfield and Associates, P.C. Philadelphia, PA A. DHS only by virtue of definition of a referral B. It has been said by CMS that Stark applies only to Medicare; there are no regulations addressing Medicaid; for a state to qualify for federal financial participation for Medicaid, the federal law says the state has to impose Stark restrictions, but most don t 1. At least two courts have held that it applies to Medicaid, most notably in the All Children s Hospital case in Florida 2. Legislation has been introduced to clarify that Medicaid directly incorporates the Medicare prohibitions C. Referral to a physician 1. In the case of a physician s services (as defined in section 1861(q)) provided personally by (or under the personal supervision of) another physician in the same group practice as the referring physician a. Includes members : shareholders, employees, partners; does not include NPP s b. Includes independent contractors during the time they are providing patient care services for the group under a contractual arrangement directly with the group, but only in the group s offices c. Must meet the reassignment rules under Medicare 2. To another physician in the group a. Rendered by a physician or paid for on the physician fee schedule i. MDs, DOs, podiatrists, optometrists, dentists, chiropractors ii. Interns and residents outside the scope of their residency program 1

2 iii. PAs, NPs, CNSs for services not incident to a physician s service physician substitutes but not physicians for Stark or anything else b. A physician service is generally defined in Medicare. Not all physician services are Stark designated health services (DHS) i. Diagnosis, therapy, surgery and consultation ii. Physician must examine the patient in person or be able to visualize some aspect of the patient's condition without interposition of a third party (e.g., EKGs, EEGs, X-rays, etc.) Interpretation of X-rays and EKGs in emergency room can only be billed by one physician, either treating emergency room physician or radiologist/ cardiologist; left to hospital to see that only one claim submitted [CPM Ch ] iii. Performed in a home, office, institution or at the scene of an accident c. Using the premises of the group D. In Office Ancillary Services 1. (Excluding durable medical equipment (excluding infusion pumps) and parenteral and enteral nutrients, equipment and supplies) 2. Who can render?: that are furnished personally by the referring physician, by a physician who is a member of the same group practice or personally by individuals who are directly supervised by the physician or by another physician in the group a. Independent contractors can supervise b. The level of physician supervision is that which generally applies in Medicare i. General no on site supervision ii. Direct in the office suite iii. Personal in the room with the patient 2

3 c. Under Medicare, physical therapy is paid at 100% of the MPFS whether incident to or not, but if billed incident to, a physician has to be in the office suite, which is not measured by the post office address d. Under Medicare, NPs, PAs, CNSs can bill on their own numbers and are paid (to the group) at 85% of the MPFS, including for visits and diagnostic services which they can render but not supervise 3. Where can they be rendered?: in a building in which the referring physician (or another physician who is a member of the same group practice) furnishes physicians services unrelated to the furnishing of DHS or in a centralized building a. Shared facilities: In office ancillary services must be provided in offices where the group has co-located other offices doing non- DHS between 8 and 35 hours a week (block time leases), or b. in a centralized building where it does testing (or any of the DHS services) but has no additional offices. Have to control the space 24/7 to be centralized; c. The office is determined with reference to the post office address i. That is not true for Medicare incident to which requires the same office suite ii. Vans do not count for Stark purposes (unless parked 24/7) or for incident to ever 4. Who can bill?; the physician performing or supervising the services, a group practice of which such physician is a member under a billing number assigned to the group practice, or by an entity that is wholly owned by such physician or such group practice a. Supervision in accordance with Medicare rules b. If a wholly owned entity bills, it must be owned by the group as a whole; not by a shadow group of the same owners as the practice c. Reassignment in accordance with the reimbursement rules 3

4 E. Compensation in a Group A physician in a group practice may be paid a share of overall profits of the group or a productivity bonus based on services personally performed or incident to such personally performed services, so long as the share or bonus is not determined in any manner which is directly related to the volume or value of referrals by such physician. 1. Profit sharing is the fruits of others labors from DHS, e.g., sharing the diagnostic testing revenues with the ordering practitioners according to a formula a. Must be a pod of at least five physicians b. If you are a single group of fewer than five, all must be paid in accordance with the same formula (not necessarily the same amount) c. Cannot include current DHS ordering patterns but can use surrogates, e.g. E/M services, wrvus excluding DHS unless personally performed, numbers of patients d. Not everyone needs to be included in profit sharing e. Non-shareholders can be paid profit sharing f. Independent contractors can be paid profit-sharing g. Can use historical ordering patterns, e.g. two year average 2. Productivity is the fruits of the physician s own labors a. Personally performed includes shared visits at the hospital with an NPP; but incident to may not be billed at the hospital outpatient department even if they are the physician s employed NPPs rendering the services b. Incident to cannot be used for diagnostic services, but can be allocated dollar for dollar to the treating physician who may not be the supervising physician and includes infusions and the drugs themselves, as well as physical therapy [See 72 FR , September 5, 2007] c. NPP visits are not DHS and can be handled any way you want 4

5 including allocated directly to the treating physician or in profit sharing or some of each d. Productivity can be a percentage of revenues; the regulations do not stipulate how expenses must be allocated, but they do permit location based allocation of the expenses (e.g., the Maple Street office, the Elm Street office) e. Independent contractors can be paid productivity 3. Incident to a. Services of non-physicians must be rendered under the direct supervision of the physician -- on premises and in the office suite: See, Snider v. Blue Cross and Blue Shield of Michigan, (Civ. No , E.D. Mich., Feb. 8, 1979), CCH 29,905; Downtown Medical Center v. Bowen, 944 F.2d 75 (10 th Cir. 1991) CCH 39,575 i. When the ordering physician is directly supervising the service, the signature of the ordering physician shall be entered in Item 31 of the CMS ii. When the ordering physician is not supervising, the signature of the supervising physician goes in Item 31. [Medicare Claims Processing Manual Ch ] b. Need not be employees or leased employees problem that PAs must be employees c. There must be a physician professional service to which ancillary services are incident i. supervision itself is not a physician service ii. cannot enter into a relationship with a physician merely to "bill through" d. BUT now diagnostic services can never be incident to and a physician can be billed incident to another physician, according to informal guidance from CMS; but no regulation says that. e. Services must be of a kind commonly furnished in a physician's office or clinic -- no use of PAs or NPs in hospital care for billable 5

6 services incident to ; do not confuse with Transmittal 1776 below, which appears to be the same f. Services must be commonly rendered without charge or included in the physician's bill. g. If 4 categories of advance practice personnel (physician assistants, nurse midwives, nurse practitioners and clinical nurse specialists) perform, can bill applicable E & M code; otherwise only but in no event can ancillary personnel provide counseling or coordination of care billing without physician involvement. [CPM ] 4. Transmittal 1776: Shared Visits. Now it s in the Medicare Claims Processing Manual under Shared Visits a. Physician and NPP in the same group, working together in hospital inpatient/outpatient/ed b. NPP can see patient first, physician can follow and perform any part of an E/M visit in an encounter with the patient face to face and total service may be billed at 100% under physician s number c. But this is not incident to. d. It is personally performed for Stark purposes F. Assignment: 42 USC 1395u(b)(3)(B)(ii); 1842(b)(3)(B)(ii) of the Social Security Act; 42 CFR general principles relevant under Stark to definition of a group and who bills for in-office ancillaries 1. Physician agrees to accept Medicare's payment in full a. Voluntary for each incident of service -- e.g., by patient or by type of service, incident-by-incident or over time b. Rescission must be mutual: i. prior to any determination of claim for which the assignment was made ii. attempt to rescind because of dissatisfaction will have no effect but will be considered a request for review 6

7 2. A pattern of breach of assignment (billing for difference between carrier payment and actual charge) punishable under fraud and abuse statutes: 42 USC 1395nn(d); 1877(d) of the Social Security Act a. More than three instances b. Misdemeanor, fine of $2,000, potential expulsion from Medicare 3. Reassignment: 42 USC 1395u(b)(5); 1842(b)(5) of the Social Security Act; 42 CFR Section 952 of HR1 liberalized b. and c., below to permit reassignment where physician has a contract with an entity or person which says the entity may submit regardless of where the services are provided as long as there is a contractual relationship. (Transmittal 111 (Feb 27, 2004) Claims Processing Manual (Pub )) Joint and several liability between the entity and the rendering practitioner for overpayments, and the practitioner has access to claims submitted on his behalf. See of the CPM, and new 42 CFR [See 69 Federal Register 66314, Nov. 15, 2004]. Extended to employees in the 2007 PFS This is the most useful reassignment provision a. Traditionally can't reassign from beneficiary to physician to another entity except in three circumstances: physician gives right to receive payment to another under a contractual agreement i. employer-employee relationship: (Social Security Act definition - W-2) Northeast Emergency Medical Associates, P.C. v. Califano, 470 F. Supp. llll (E.D. Pa. 1979) ii. inpatient facility: physician assigns to hospital iii. health-care delivery system: e.g., clinic or prepaid plan -- no longer required to be tax exempt or 51% owned by physicians; outpatient oriented iv. If relationship qualifies under one category it is sufficient even if other physicians in same setting qualify on a different basis (e.g., W-2 physicians and 1099 physicians work for same clinic) 7

8 v. Where there are multiple subgroups in a facility, each can be a separate group paying to same tax ID number vi. vii. viii. Indirect relationships (e.g., hospital contract with emergency group) now require direct reassignment by physician to hospital. Indirect relationships may exist with entities which otherwise do not qualify for assigned payments Clinics need not have W-2 relationship, but if the relationship is with a 1099 independent contractor, but the reassignment is only good for services on premises of the clinic -- all others must be submitted by physician. Transmittal 1644 August 1999 created exception for University Faculty Practice Plans where services may be provided in hospitals and clinics where staffing is provided by FPP and on premises restriction does not pertain. *Applies to PAs, NPs, CNSs ** CRNAs always had an exception (CPM ) But 952 MMA eliminated need for on premises services. Stark still requires it. Stark III requires direct relationship between independent contractor physician and the entity billing for his services not through a staffing company ix. Where professional component is purchased (e.g., imaging center buys interpretation of radiologist), claiming entity must have performed technical component, test must have been "initiated" by someone unrelated to either the technical component provider or the interpreter, and the interpreter does not see the patient * NOTE: If the services are DHS, on premises still is necessary for IC physician to be in the group except for diagnostic testing where they can be off-site from the ordering physician s office but still on group s premises, but you cannot mark up (See anti-markup at p.10) x. Physician coverage arrangements (1) Patient is first physician's (2) He is unavailable 8

9 (3) Name and UPIN of performing physician included (4) Not for more than 60 continuous days (5) Use Q5 modifier when the relationship is reciprocal; use Q6 modifier if service is provided by locum tenens physician (6) OBRA 94 permitted Secretary to recognize substitute billing arrangement between two physicians (locum tenens) locum tenens physician must be paid on a per diem or similar fee-for-time basis can be used for a physician who has left the practice NOTE: When this relationship is used, claiming physician certifies" that all conditions of coverage have been met by the substitute physician (e.g., "incident to", etc.) and he accepts liability for "falseness" of any statements made b. Right to receive assigned benefits will be revoked if i. violation of assignment rules or reassignment rules ii. iii. continued violation after HCFA warning failure to furnish necessary information to establish compliance with requirements of CFR c. Due process rights attach to revocation: 42 CFR III. Anti-Markup Rule Applies to all Medicare Diagnostic Testing, But Only To Diagnostic Testing: 42 CFR (a) A. When the TC or PC component is ordered by the billing physician or other supplier (or by a related party) AND B. The physician supervising the TC or performing the PC does not share a practice with the billing physician C. Billing amount if markup is prohibited 9

10 1. Actual charge where payment is per transaction 2. Fee schedule amount Where the billing physician or other supplier pays the performing supplier a fixed fee for the TC or the PC, the net charge is the fixed fee (exclusive of any charge that is intended to reflect the cost of equipment or spaced leased to the performing supplier by or through the billing physician or other supplier, per (a)(2)(i)) 3. Net charge a. Where a fixed fee is not paid, the billing physician is limited to salary and benefits paid to the performing supplier for the TC or PC calculated how for each claim? b. No allowance for overhead c. It is responsibility of the billing entity to ascertain the amount it paid d. The billing entity should maintain contemporaneous documentation of the methodology and information used for the calculation D. Performing physician can bill PC directly E. The rule does not affect coverage but payment amount; Stark is about coverage a Stark violating service is non-covered. F. It applies only to diagnostic testing, but to all diagnostic testing billed by a practice which ordered the test IDTFs can still buy PCs G. It applies to both professional components and technical components H. The anti-markup provisions, when applied, limit only how much a physician or other supplier may bill Medicare, whereas the physician self referral rules, when implicated and not satisfied, prevent a physician or other supplier (or provider) from billing Medicare (for any amount). I. This trumps the centralized building for diagnostic services under Stark unless the physicians performing the services meet the substantially all test IV. Concepts Which Do Not Matter 10

11 A. Purchased has never been defined. Is not in the statute. B. Outside supplier C. Group Practice definition under Stark D. Physician organization with no owners who may get a profit (e.g. faculty practice plans, academic centers) E. Centralized building V. Physician Who Shares a Practice : Two Tests A. Always analyze under Alternative 1 first B. Alternative 1: Substantially all 1. Prohibition on markup does not apply where the performing physician a. supervised TC; or b. performs PC c. and performs at least 75% of his professional services for the billing entity presumably this count is based on time as it is under Stark but they do not say; could you measure by: i. volume of claims? ii. volume of CPT codes? iii. percent of RVUs? iv. cash payments? 2. On-call and part-time physicians can provide substantially all their services through one practice and still spend not more than 25% of their time with another practice. 3. Locums may substitute for someone who does spend substantially of his time with the practice 4. The billing entity must have a reasonable belief at the time it submits a claim that a. the performing physician has furnished substantially all of the services with them for 12 months, including the month in which the claim is submitted; or 11

12 b. the performing physician is expected to perform in the next 12 months substantially all of his services with the group, including in the month the claim is submitted 5. If the performing physician (supervising and/or interpreting) meets the substantially all test, the site of service doesn t matter C. Alternative 2: Site of Service 1. Technical component is conducted and supervised in the site 2. Professional components are performed in the site 3. The site must be the office of the billing entity which is the location in which the ordering physician regularly furnishes services and the ordering physician provides the full range of services a. More stringent than Stark which allows the group practice to have an office normally open to patients b. For this, the ordering physician must regularly furnish services (at least 6 hours per week?) [42 CFR (b)(2)(i)], and c. Must provide the full range of services not some physician services unrelated to the furnishing of DHS 4. Same building means a structure with, or combination of structures that share, a single street address as assigned by the US Postal Service, excluding all exterior spaces (for example lawns, courtyards, driveways, parking lots) and interior loading docks or parking garages. For purposes of this definition the same building does not include a mobile vehicle, van, or trailer. [72 Federal Register 51084, Sept 5, 2007] 5. The physician rendering the services must be an employee or independent contractor physician D. Extra conditions; some go beyond Stark to share a practice 1. Implied reassignment to share a practice 2. Site of Service test requires on-premises physician supervision even if the Medicare standard is otherwise general; but what about sleep studies? 12

13 3. No vans may be used, even 24/7 4. The physician supervising the technical component must be an owner, employee, or independent contractor of the billing entity 5. The interpreting physician must be an employee or independent contractor of the billing entity 6. No centralized building without co-located offices unless the performing physician does substantially all of his services with the group fine 7. Block leases that meet in-office ancillary services requirements are 8. Shared facilities (e.g. two practices in the same building share CT) are fine 9. The ordering physician must provide substantially the full range of services at that location 10. The supervising physician must be on premises where he does not provide more than 75% of his services with the group VI. Where Are We On Diagnostic Testing Generally? A. Who can order and supervise?: Physicians (MDs, DOs, ODs, DMDs) and midlevel non-physician practitioners (NPPs) such as PAs, NPs, CNSs can order and perform diagnostic testing. 1. Chiropractors are not recognized for ordering covered diagnostic testing, not even to confirm the subluxation of the spine for which Medicare will pay for their manipulation 2. NPPs cannot supervise diagnostic testing to meet the supervision standards, although where supervision itself is the service (e.g., 93015) they can do that when it is in the scope of their license B. What level of supervision pertains? CMS determines the level of supervision by CPT Code [Medicare Benefit Policy Manual, 100-2, Ch ] 1. General (Level 1) does not require a physician on premises but requires overall quality supervision 2. Direct (Level 2) requires a physician in the group to be in the office suite 13

14 3. Personal (Level 3) means the physician must be in the room with the patient (typically when contrast is being used) C. Whose number goes on the claim form? If the technical and professional component are done on different days, the service must be split billed (--TC; -26) and for the TC the number of the supervising physician must be included 1. There is no requirement with regard to the training or board certification of the physician supervising. (Not like an IDTF) 2. The physician-directed clinic rules permit any physician in the office suite to meet the requirements for supervision. 3. Item 17 in the CMS Enter the name of referring or ordering physician. When a claim involves multiple referring, ordering, or supervising physicians, use a separate CMS-1500 claim form for each ordering, providing, or supervising physician. [Medicare Claims Processing Manual, Ch ] D. Does it matter who owns the equipment or employs the tech?: No; physicians can lease equipment from a supplier, including a group which will provide interpretations; and they can lease the tech. E. Are there qualifications for techs doing testing in physician practices?: Medicare does not specify qualifications for technicians, BUT, state law might well limit who can perform diagnostic testing depending on the nature of the test. (e.g., some definitions of the practice of physical therapy would not permit unlicensed personnel to perform range of motion tests; nuclear safety standards may impact who can handle radionuclides, etc.) F. Can a physician practice buy technical components for their commercial patients and let the vendor who can bill the service (e.g., an IDTF, another physician practice) keep the Medicare work and referrals? This potentially creates reverse kickbacks --- the vendor lets the referring practice make money on the commercial business while it keeps all the Medicare business. This makes the inkind benefit to the billing practice of profit on the commercial business look like a kickback for the Medicare business. The only way around this is if the vendor charges the same amount to Medicare and to the buying practice and at all other times. Then, it s just his price to everyone. VII. The Stark Complications to Diagnostic Testing A. Which services are affected?: The Stark designated health services (DHS) diagnostic testing includes imaging including x-ray, CT, nuclear, ultrasound, echo, PET and more, specified by CPT code. But EKG, NCV, Holter, EMGs, 14

15 sleep studies are not DHS, for example, and Stark does not pertain to those studies. B. Where must the services be provided?: In office ancillary services must be provided in offices where the group has co-located other offices doing non-dhs between 8 and 35 hours a week or in a centralized building where it does testing (or any of the DHS services) but has no additional offices. Have to control the space 24/7 to be centralized; but anti-markup rules affect amount paid. C. Who must do the service?: A physician in the group or someone supervised by a physician in the group. Level of supervision is that level which otherwise applies under Medicare (1, 2 or 3). An independent contractor physician (anyone who is not a member which is only W-2 employees, shareholders and partners) is only in the group when he is on the group s premises. 1. Teleradiology does not meet this standard. Independent contractor radiologists interpreting images while sitting in their own offices, even if they have completed an 855R for the group, do not meet this standard. They must come to the group s offices if the group is going to bill for their interpretation and avoid prohibition on mark up. Look at definition of entity 2. The parties can split bill (ordering group bills TC and interpreter bills PC) if the standard can t be met. Stark only applies to Medicare, so commercial can be handled differently, but remember the reverse kickback problem if you split bill for Medicare and markup on commercial for the purchased PC. It is better if the interpreting physician buys the TC from the ordering group and bills himself on the commercial side. 3. Telehealth or telemedicine is different. Medicare allows real-time diagnostic evaluations to be done by telehealth [Medicare Benefit Policy Manual, 100-2, Ch , Medicare Claims Processing Manual, 100-4, Ch ] 4. The Stark regulations do not address telehealth methodologies explicitly at all. Generally the point of telehealth is to permit a far-flung physician to bill for a visit that happens by means of technology. Visits aren t DHS, but diagnostic studies done this way can be. They do recognize an independent contractor rendering DHS in a patient s home. D. What does it mean that diagnostic testing cannot be incident to?: It means that the ordering and even the interpreting physician, cannot be given dollar for dollar credit for the revenues from diagnostic testing technical components. The revenues from diagnostic testing which is DHS have to float up into an overall 15

16 distribution pool which is distributed in one of the ways that is permissible for that. [See Gosfield, Physician Compensation for Quality: Behind the Group s Green Door, Health Law Handbook, 2008 Edition, 07.pdf] 1. Distribution pools have to be pods of at least five physicians. 2. You can slice and dice by ancillary service so that not everyone is in every pool. You can create sub-pods as long as each pod has at least five. 3. No one can be paid volume or value of DHS referrals but you can use a surrogate for referrals as long as you exclude DHS: e.g., E & M codes, number of encounters, RVUs without DHS, etc. 4. Interpreting physicians can always get direct credit for the professional component because it is personally performed. E. Will block-time leases still work?: Block time leases can be used to share facilities subject to the in-office ancillary services rules noted above. For non- DHS, block time leases do not require co-located offices. During the time of the lease, the billing group must have exclusive use of the leased premises, except for common areas. 1. The lease itself must meet the lease exception under Stark. 2. If the parties jointly own the equipment and jointly lease the space, block time is not necessary if their other offices are in the same building. Can be in the same building and used at will. Not as good if one party holds it and subleases to others. Resources: Gosfield, Getting the Team Paid: How Medicare Physician Payment Policies Impede Quality Health Law Handbook (2009 ed) 16

17 Gosfield, Ten Myths About the Stark Statute Debunked, Journal of Medical Practice Management, Jan/Feb, 2004, pp