June 29, 2010

CMS Issues Proposed Rule for Physician Disclosure Requirements for MRI, CT, PET

Section 6003 of the recently enacted Patient Protection and Affordable Healthcare Act, H.R. 3590 (the "Act") included new disclosure requirements for physician practices or physicians using the in-office ancillary services exception when referring and billing for specified in-office designated health services ("DHS").  The Act amended the federal Stark law statutory exception for in-office ancillary services to require a referring physician to inform a patient in writing, at the time of the referral, that the patient may obtain specified imaging services (i.e., MRI, CT, and PET), or such other DHS as designated by the Secretary of Health and Human Services, from a person other than the referring physician, a physician in the same group practice as the referring physician, or an individual directly supervised by the referring physician or another physician in the group practice.  The Act further required a referring physician to provide the patient with a written list of suppliers who furnish such services in the area in which the patient resides.  The Act provided that these requirements applied (retroactively) to services rendered on or after January 1, 2010.

On June 25, 2010, CMS issued proposed regulations regarding the changes to this exception as set forth in the Act. 

Services Triggering Disclosure

As noted above, the Act provided that the new disclosure requirements apply to MRI, CT, and PET services as well as such other radiology or imaging services as the Secretary determines appropriate.  However, CMS noted that it is "not inclined" to expand the disclosure requirements beyond MRI, CT, and PET services at this time.  Nonetheless, CMS solicited comments regarding whether other radiology or imaging services should be included in the disclosure requirements.

Form / Timing of Notice

CMS proposed that the disclosure notice should be written in a manner "sufficient to be reasonably understood by all patients" and be given to the patient at the time of the referral.  Importantly, CMS did not propose an exception to the disclosure requirements for MRI, CT, or PET services furnished on an emergency or time-sensitive basis, but did solicit comments on whether such an exception may be appropriate. 

The notice must indicate to the patient that the services may be obtained from a person other than the referring physician or physician group practice and include a list of other suppliers who provide the service being referred.  Further, nothing on the disclosure notice or list of suppliers may indicate to the patient that he or she must receive imaging from a supplier on the list if not receiving the service from the referring physician. The patient may receive the imaging service from the referring physician, from a supplier identified on the notice, or from another supplier of the patient's choice.

Types and Number of Suppliers

The suppliers must be located within a 25-mile radius of the physician's office at the time of the referral regardless of whether the office is in an urban or rural area, and include no fewer than 10 other suppliers.  In such cases where there are fewer than 10 suppliers within the radius, CMS is proposing that the physician list all suppliers.  If there are no qualifying suppliers within the radius, the physician is not required to provide a list, but must still disclose to the patient that the services may be provided by another supplier and document the disclosure.

Further, CMS proposed that only "suppliers" be included on the written list, including "a physician or other practitioner, a facility, or other entity (other than a provider of services)."  The list is not required or permitted to include "providers of services" such as hospitals and critical access hospitals, among other facilities. CMS is, however, soliciting comments regarding whether inclusion of such providers would benefit patients by providing more options. 

The list of suppliers must contain the name, address, phone number, and distance from the physician's office location of each supplier at the time of the referral.  CMS is soliciting comments regarding all of these requirements, as well as other alternative methods of compliance that still satisfy the statutory requirements.

Documentation of Disclosure

In order to document that these disclosure requirements have been satisfied, CMS proposed that a record of the patient's signature on the disclosure notification must be maintained in the patient's medical record.  CMS solicited comments regarding the burden of this requirement and any alternative means of recording that the disclosure was made to the patient at the time of referral.

Effective Date

As discussed above, the Act appeared to apply retroactively.  CMS considered whether the final rule setting forth the disclosure requirements should apply retroactively, but concluded that retroactive rulemaking is not required in this case.  CMS instead proposed an effective date of January 1, 2011. 

Physicians and physician group practices who provide in-office PET, CT, and/or MRI services should  contact their health care counsel to submit comments to the proposed rule or to obtain guidance on implementation of these required disclosures prior to the effective date.  CMS is soliciting comments for 60 days.