CMS promulgated a final rule implementing Section 6003 of the Patient Protection and Affordable Care Act (PPACA), which amends the Stark law to require physicians who refer Medicare patients for in-office magnetic resonance imaging (MRI), computed tomography (CT), or positron emission tomography (PET) tests to provide those patients with a list of at least five alternative suppliers in the area. Failure to provide notices when required would constitute a Stark Law violation. The final rule appeared in the 2011 Medicare Physician Fee Schedule which was put on display on November 2, 2010 and published in today’s (November 29, 2010) Federal Register. A link to the final rule is available by clicking here. The disclosure requirement will be effective for referrals made beginning January 1, 2011.

Generally, the Stark law prohibits physicians from referring Medicare patients for certain “designated health services” to any entity with which the referring physician, or his or her immediate family members, has any direct or indirect financial relationship. The entity furnishing the designated health services is also prohibited from billing Medicare for the services referred by the related physician. There is an exception, however, for in-office ancillary services if certain supervisory, location and billing requirements are met. Section 6003 of PPACA modified that exception to require physicians who refer for in-office MRI, CT or PET scans to provide their Medicare patients at the time of referral a written list of at least five other suppliers who furnish those services within 25 miles of the physician’s office. The notice must be reasonably understandable to patients and include the names, addresses and telephone numbers of at least five other suppliers that provide the referred services. If fewer than five suppliers are located within the 25 mile radius, then all suppliers within this area should be listed. Hospitals are not included within the definition of supplier so, while they may be included in the notice, they do not count in determining whether at least five suppliers are listed.

The preamble to the final rule reiterates that a written notice should be presented to the patient each time a CT, MRI or PET referral occurs, even if prior disclosures had been made to the same patient. If a referral is made by phone, a written notice should still be made by mail or even e-mail and documented.

CMS noted in the preamble that physicians should document their compliance with the disclosure requirement but did not adopt the provision in the proposed rule that would have required the maintenance of a signed disclosure form from the patient. In addition, CMS encouraged, but did not require, physicians to update the list of alternative suppliers annually and to consider whether the listed suppliers are accepting new Medicare patients.