Stark In-Office Ancillary Services Exception Disclosure Requirements Effective January 1, 2011

Effective January 1, 2011, the new Stark In-Office Ancillary Services Exception (the “IOASE”) provisions will require physicians or group practices relying upon the IOASE (collectively, “Physician Practices”) to furnish the following notice/disclosure to patients receiving MRI, CT, and PET (as identified on the Stark CPT/HCPCS Code list):

• Written notice at the time of the referral (not the time of the service)that the Medicare patient may receive the same services from another person or other supplier.

• The written notice must include a list of at least 5 (this was reduced from the original list of 10) suppliers that provide such services and which are located within a 25-mile radius of the referring physician’s office location (depending upon the various office locations, a Physician Practice may be required to have different lists) at the time of the referral. (Note that so long as the requisite number of suppliers is listed, you can now also include a list of providers on the notice (e.g., hospitals) this was previously prohibited under the proposed rule).

• The notice must be written as to be understood by all patients and should include at a minimum, for each listed supplier the supplier’s name, address, and telephone number. (Note that CMS removed the requirement that the practice obtain the patient’s signature on the notice and maintain a copy in the patient’s medical record. Also, note that CMS is no longer requiring the practice to list the mile radius for each listed supplier.) NOTE that although Physician Practices are no longer required to obtain and maintain the patient’s signature, it may be prudent to otherwise document that the disclosure requirement was met such as having a physician in the Physician Practice document in the chart that the notice was given.

The final rule is somewhat less onerous than the proposed version of the self-disclosure requirement. However, all Physician Practices nonetheless should begin working to identify the alternative list of suppliers that they will provide (including the name, address and number of each) on the notice. Physician Practices should also ensure that they have their notices ready by January 1, 2011 and have procedures established to ensure that their office staff is providing the notice to Medicare patients at the time the MR/CT/PET is ORDERED. Physician Practices should be mindful of the fact that the notice can be simple and only needs to merely provide notice. A Physician Practice is permitted to identify its own services on the notice and according to CMS, a Physician Practice can also include language on the notice which informs patients that the inclusion of the alternate suppliers is not intended to endorse or recommend those suppliers.

For more information, please contact Adrienne Dresevic, Esq. or Carey F. Kalmowitz, Esq. at (248) 996-8510 or (212) 734-0128 or visit the Stark and Anti-Kickback specialty page on the HLP website.