On July 28, 2008, U.S. Senator Chuck Grassley (R-Iowa), Ranking Member of the Senate Finance Committee, introduced S. 3343, the Medicare Imaging Disclosure Sunshine Act ("S. 3343") that, if enacted, would amend the in-office ancillary services exception to the federal physician self-referral law (the "Stark Law") by requiring physicians to disclose their financial interests in certain imaging equipment, facilities and centers to patients when referring patients for services provided by such imaging equipment and facilities. The Stark Law prohibits a physician from referring a Medicare beneficiary to a health care entity for the furnishing of certain services, including radiology and imaging services, with which the physician (or one of his or her immediate family members) has a financial relationship, unless an exception applies.

While passage of S. 3343 or similar provisions in the 110th Congress (2007-08) is unlikely, the bill’s introduction marks the latest effort by the federal government to focus on imaging services and reflects an enhanced level of scrutiny in this area. Earlier in July, Congress overrode a presidential veto to enact the Medicare Improvements for Patients and Providers Act of 2008 ("MIPPA") that included significant new imaging-related provisions, including a two-year long Centers for Medicare & Medicaid Services ("CMS") demonstration project to begin in 2010 regarding the appropriate use of imaging services. In a report dated June 2008, the Government Accountability Office stated that Medicare spending for imaging services performed by physicians had more than doubled from 2000 to 2006 to about $14 billion.¹

S. 3343 also would require that physicians with an ownership interest in certain imaging equipment and facilities provide written notification at the time of referral, informing patients they could obtain such imaging services from another Medicare supplier and providing them with a list of other Medicare suppliers in the area. In a Senate floor statement introducing S. 3343, Sen. Grassley stated there is a "lack of transparency in physician self-referrals for imaging services in the Medicare program," which is needed "to help control the potential for overutilization of imaging services." Imaging equipment and services to be covered by S. 3343 include magnetic resonance imaging ("MRI"), computed tomography ("CT") scans and positron-emission tomography ("PET").

Sen. Grassley had proposed similar imaging disclosure legislation earlier this year, but his proposal was not included in MIPPA. MIPPA did provide, however, that by 2012, Medicare will only pay accredited Medicare suppliers for the technical component of MRI, CT and PET scans, as well as other advanced diagnostic imaging services to be designated by CMS.