Narrowing the included services covered under the in-office ancillary services (IOAS) exception in the Physician Self-Referral Act (Stark law) would save Medicare millions and better reflect the intent of Congress, according to Rep. Jackie Speier (D-Calif.), who recently introduced a bill to close the loophole. The IOAS exception allows a physician to circumvent the general Stark prohibition against referring patients to an entity in which he has a financial relationship as long as the services meet certain Stark law requirements. The Promoting Integrity in Medicare Act of 2013 (H.R. 2914), also known as PIMA, was introduced in the House by Reps. Speier, Ways and Means Health Subcommittee Ranking Member Jim McDermott (D-Wash.), and Dina Titus (D-Nev.). It would narrow the IOAS exception to prohibit the self-referral of certain complex services, including anatomic pathology services. The specific services that would be eliminated from the exception are advanced imaging, anatomic pathology, radiation therapy, and physical therapy. These are services that are not typically performed at the time of the patient’s initial office visit. “Three recent Government Accountability Office (GAO) reports have examined the self-referral problem, including one released today on radiation oncology services,” said Speier in introducing the bill. “All three reports […]
Narrowing the included services covered under the in-office ancillary services (IOAS) exception in the Physician Self-Referral Act (Stark law) would save Medicare millions and better reflect the intent of Congress, according to Rep. Jackie Speier (D-Calif.), who recently introduced a bill to close the loophole.
The IOAS exception allows a physician to circumvent the general Stark prohibition against referring patients to an entity in which he has a financial relationship as long as the services meet certain Stark law requirements. The Promoting Integrity in Medicare Act of 2013 (H.R. 2914), also known as PIMA, was introduced in the House by Reps. Speier, Ways and Means Health Subcommittee Ranking Member Jim McDermott (D-Wash.), and Dina Titus (D-Nev.). It would narrow the IOAS exception to prohibit the self-referral of certain complex services, including anatomic pathology services.
The specific services that would be eliminated from the exception are advanced imaging, anatomic pathology, radiation therapy, and physical therapy. These are services that are not typically performed at the time of the patient’s initial office visit.
“Three recent Government Accountability Office (GAO) reports have examined the self-referral problem, including one released today on radiation oncology services,” said Speier in introducing the bill. “All three reports have found a significant and inappropriate increase in referrals when a physician switches to self-referral, costing Medicare millions. A fourth report on self-referral in physical therapy services is expected later this year.”
The bill would create a category of services called nonancillary services, which are defined as “a service that the Secretary has determined is not usually provided and completed during an office visit to a physician’s office in which the service is determined to be necessary.” The bill then lists the above services and provides more detail and definition for each. In the listing of the anatomic pathology service, the bill says that anatomic pathology includes the technical or professional component of surgical pathology, cytology, hematology, blood banking, pathology consultations, and clinical laboratory interpretations.
The legislation would also increase civil monetary penalties for violations and require enhanced screening of claims by requiring the Health and Human Services Office of Inspector General to conduct a review specifically to determine compliance with billing of nonancillary services.
The bill is supported by trade associations and providers who perform these services in settings outside of the physician office, including the pathology and the clinical laboratory industry. According to the Web site govtrack.us, the bill has been referred to committee and has little chance of getting enacted. The introduction of the bill serves to demonstrate a growing concern in the government that self-referral is costing government programs millions of dollars through overutilization and abuse and has been shown to cause harm to patients.
Don’t be surprised if there is an uptick in whistleblower cases based on self-referrals. Laboratory compliance officers should carefully examine relationships with physician offices where they are performing one component of one of the services listed in this bill and a physician is referring the other.
Takeaway: When a laboratory is involved with a referring physician and is also providing one component of an anatomic or billable clinical lab interpretation service, it should recognize the compliance risks and carefully monitor the relationship.
