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Stark update – addition of nuclear medicine services on January 1, 2007
The regulations implementing the 2006 Medicare Physician Fee Schedule added nuclear medicine services to the definition of “designated health services” under the Stark II legislation. The effective date of the addition of such services to the definition of “designated health services” was delayed, though, to be effective as of January 1, 2007, so as to provide physicians with time to comply with the changes in the regulations.
As you most likely are aware, the Stark II legislation prohibits a physician from referring a Medicare or Medicaid patient to an entity with which he or she has an ownership interest or compensation arrangement for the provision of “designated health services,” unless an exception applies. Prior to the finalization of the aforementioned regulations, most diagnostic and therapeutic nuclear medicine services had been excluded from the definitions of “radiology and other imaging services” and “radiation therapy services and supplies,” which categories of service are now both defined to be “designated health services” under Stark II. The Centers for Medicare & Medicaid Services (“CMS”) declined to “grandfather” existing arrangements (such as nuclear medicine joint ventures) that would no longer satisfy Stark II as of January 1, 2007, and as such, all physicians will need to comply with the revised rules as of such date.
Physician groups that provide nuclear medicine services need to prepare for the changes that will take place on January 1, 2007. Prior to such date, since nuclear medicine services are not currently included as “designated health services,” there is much more freedom for group practices under Stark II as to the division of revenues generated from these services among the group’s physicians. However, commencing January 1, 2007, the division of revenue and profits from nuclear medicine services will need to be treated in the same manner as any other designated health service (such as lab services, traditional radiology services such as x-rays, ultrasounds and MRIs, physical therapy services, etc.).
Given the upcoming changes that will be effective on January 1, 2007, if you are a physician who is an owner of a joint venture providing nuclear medicine services or a member of a group practice that provides such services within the group, you will need to evaluate these relationships to make sure that you will still be compliant with Stark II on January 1, 2007. Please feel free to contact our Firm if you have any questions in complying with the revisions to these rules.
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