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CMS Issues Final Stark Phase III Regulations and Other Final and Proposed Rules

 

Email Alert

August 28, 2007

Stark Phase III Regulations

On August 27, 2007, the Centers for Medicare and Medicaid Services (CMS) placed on display at the Office of the Federal Register a final rule on physician "self-referral" of Medicare beneficiaries for certain types of Medicare-covered services. The rule is commonly known as "Stark Phase III," named after the original sponsor of the legislation that became Section 1877 of the Social Security Act (42 U.S.C. § 1395nn) and being CMS' third final rule on the topic. With certain exceptions, "self-referral" is the practice of referring a patient to an entity in which a referring physician has an actual or deemed financial interest, either through an ownership or compensation arrangement.

Generally, the rule describes CMS' interpretation of the prohibitions and exceptions to the prohibitions laid out in Section 1877.

Among other changes, the rule:

  • Modifies physician recruitment restrictions;
  • Provides more flexibility in complying with non-monetary compensation limits;
  • Reduces the administrative burden of complying with some exceptions to the Stark limitations; and
  • "Clarifies" CMS' "interpretation of existing regulations."

The rule is scheduled to be published in the September 5, 2007, edition of the Federal Register.

Read the press release or download the display version of the rule.

CMS Proposes a Medicaid State Plan Option to Cover Non-Emergency Transportation

On August 24, 2007, CMS issued a proposed rule that would allow State Medicaid programs to cover non-emergency medical transportation using a "non-emergency medical transportation brokerage program" by awarding competitively-bid contracts to provide medically-necessary transportation to Medicaid enrollees. Additionally, the rule proposes to apply to transportation brokers restrictions similar to the Stark (Section 1877 of the Social Security Act) and fraud and abuse restrictions applicable to Medicare and other federally-funded healthcare programs. Comments are due to CMS by 5 p.m. on September 24, 2007.

View the proposed rule.

CMS Issues Regulations on the Medicare Integrity Program; Conditions of Participation for Hospital Laboratories

On August 24, 2007, CMS issued a final rule on the Medicare Integrity Program (MIP) and an Interim Final Rule with Comment for Hospital Conditions of Participation (COPs) for Laboratory Services.

Medicare Integrity Program

Among other provisions, the MIP final rule clarifies the role of Fiscal Intermediary or Carrier contractors, defines the role of a "MIP contractor" (which includes developing and publishing lists of items subject to an Advance Determination of Medicare Coverage (ADMC) under Sec. 1834(a)(15) of the Social Security Act), and explains the process for selecting those contractors.

Access the MIP final rule.

Hospital Laboratory Conditions of Participation

Among other requirements, the Hospital Laboratory COP interim final rule establishes procedures that Medicare-participating hospital laboratories must follow to prevent the transmission of hepatitis C, including patient notification procedures, and "increases the medical record retention period from 5 to 10 years" for certain blood-related records. The interim final rule is generally effective February 20, 2008, subject to OMB approval of certain provisions and comments that CMS receives from the public by 5 p.m. on October 23, 2007.

Access the Hospital Laboratory COP interim final rule.

CMS Places on Public Inspection ASC and Medicaid/SCHIP Proposed Rules

ASC Proposed Rule

On August 24, 2007, CMS announced a proposed rule to modify the conditions ambulatory surgery centers (ASCs) must meet in order to receive Medicare reimbursement. A copy of this proposed rule, CMS File Code CMS-3887-P, is on display at the Office of the Federal Register, but is not currently available online. The rule is scheduled to be published on August 31, 2007.

According to the press release, below are some of the proposed changes in the rule:

  • Modifications to the "quality assessment and performance improvement" (QAPI) measures;
  • Requiring ASCs to have disaster-preparedness plans;
  • Adding requirements to furnish covered radiologic services;
  • Adding patients' rights requirements;
  • Expanding infection control requirements; and
  • Adding a "comprehensive patient assessment requirement" that must be conducted prior to surgery.

View the press release.

Medicaid and SCHIP Proposed Rule

On August 24, 2007, CMS placed on public inspection with the Office of the Federal Register an SCHIP Final rule on the Medicaid and SCHIP Payment Error Rate Measurement (PERM) program to be published on August 31, 2007. CMS has not issued a press release about this proposal or posted a display version of this rule online.

We would like to thank Alex Hendler (Powell Goldstein LLP, Washington, DC) for providing this email alert.

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