Healthcare attorneys and provider groups said they found no surprises in HCFA's final regulations barring physicians from referring Medicare patients to clinical laboratories in which the doctors own an interest.
Some provisions, however, may prove troublesome for hospitals, physicians and group practices.
The regulations enforce the Medicare self-referral law-commonly known as "Stark I" for its author, Rep. Fortney "Pete" Stark (D-Calif.). The definition of a hospital under the new rules includes subsidiaries if the hospital bills Medicare for those subsidiaries' services. That definition could, in theory, increase the number of prohibited referrals.
For instance, a doctor who owns an interest in a radiology laboratory that is a subsidiary of a hospital could be prohibited from referring patients to the hospital's clinical laboratory even if he or she owns no interest in the clinical lab, said Venel Brown, an attorney with Gardner, Carton & Douglas in Washington.
HCFA's publication of the rules in the Aug. 14 Federal Register comes six years after the self-referral law passed and three years after it took effect.
In the text of the regulations, HCFA said it will apply many of the same interpretations of the physician-referral law when it publishes regulations for the "Stark II" law, which prohibits self-referral to 10 other health services, including home care, therapy, radiology and hospital care. Congress approved the Stark II law in 1993, and HCFA is expected to issue the rules enforcing that law later this year.
The Stark I regulations also would bar hospitals, group practices and health systems from buying physician practices and paying in installments.
The new rules are designed to eliminate transactions that aim to steer more Medicare patient referrals to the buyers' clinical labs. But Ira Coleman, partner in the Miami office of the law firm McDermott, Will & Emery, said it would change the balance of power in many competitive healthcare markets.
"It just puts the health system or practice with cash to put on the table in a much better position," Coleman said.
For group practices, the final regulations made it easier to qualify for exemptions to limits on referrals to group-owned laboratories.
The proposed regulations said group members must devote at least 85% of their aggregate patient care through the group practice to qualify for exemptions. The final regulation has lowered that threshold to 75%.
Laboratories shared by solo practi-tioners, meanwhile, could qualify for exemptions only if the independent physicians provide direct supervision of the laboratory services, said Tina Weatherwax, health policy analyst for the American Society of Internal Medicine.
Weatherwax said such a requirement makes it impractical for doctors to qualify for the exemption.