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IN OFFICE ANCILLARY SERVICES EXCEPTION FROM STARK ANTI-REFERRAL


 
The  statutory exception for in-office ancillary services is the principal exception  upon which most physicians rely to protect referrals for DHS within their own
practices. As interpreted in the final Phase I rule, this exception has become  more generous in some respects, and more restrictive in others. As HCFA has
tried to provide direct guidance for a wide variety of different practice  arrangements, it has certainly become more detailed and complex. Section
411.355(b) sets forth the basic requirements of the exception, and provides special rules for certain types of durable medical equipment ("DME") and for
certain home care physicians.

 The  basic exception has three elements: a performance test, a site-of-service test,  and a billing test.

1.     The  Performance Test.
To be eligible for the in-office exception, the DHS must be performed by the  referring physician; another  "member" of the same group practice; an  individual who is supervised by the referring physician or another physician "in  the group practice'" (whether or not a "member" of the  group).

 For  these and other purposes, a "member" is an owner or employee of the practice,  whereas a physician "in the group" can be an independent contractor. Thus, the
supervision requirement can be met by contract physicians, not just owners and  employees. HCFA has also relaxed the standard,dropping the "direct
supervision" requirement
 from both Stark I and the January 1998  Proposal in favor of whatever degree of supervision Medicare otherwise requires
for coverage and payment purposes. In the short run, this will permit  non-physician personnel to perform Medicare DHS without the need for physician
presence "in the suite" for most services.

 2.     The  Site-of-Service Test. 

The DHS must be furnished either:
  • in  the same building (but not necessarily the same part of the  building) in which the referring physician or other member of the group provides substantial physician services that
    are unrelated to DHS services, including non-Medicare DHS. These unrelated services must represent substantially the full range of  services that the physician routinely provides, and the receipt of DHS services must not be the primary reason for the patient's contact with the referring physician or group; or in  the case of group practices, in a centralized building used  by the group for the provision of some or all of the group's  DHS.
These  provisions are different from the January 1998 Proposal in several respects.

 First,  the "same building" test is more stringent because the "substantial" and  "substantially full range" tests prevent a practice from qualifying an ancillary
facility by simply providing token unrelated services there.

Second,  the "same building" test is now tied to the relationship of the patient and the  practice. If the patient comes only for DHS services, and not for professional
services, HCFA does not consider those services ancillary to the practice.

Third, and favorably, HCFA has clarified that the "same building" for this purpose, can be a collection of interconnected buildings if they all share one street  address; but, unfavorably, HCFA does not recognize driveways, parking lots or garages as being part of the same building, so that a van or trailer parked  outside does not qualify as being in the same building as the professional ffices inside.

 Fourth,  the new rule defines "centralized building" in §411.351 to require full-time use by the group claiming it, thus not permitting the same ancillary facility to
qualify as "centralized" for more than one practice if shared through some leasing arrangement. On the other hand, the final rule eliminates the January
1998 proposal that a "centralized" facility serve more than one office of the same group practice. A group can have as many centralized facilities as it
chooses, in any configuration, as long as they are owned by or leased full time by the group for its exclusive use.


3.    The  Billing Test.
DHS services provided to Medicare patients must be billed by one of the following:  the performing or supervising physician; the group practice of which he or she is "a member" under a billing number assigned to the group; the group practice of a supervising physician who is a "physician in the group"; ·an entity wholly owned by the performing or supervising physician, or group  practice under a billing number assigned to the physician or group;  or  a billing company functioning solely as an agent for one of the above, and billing under a number assigned to the physician or group. The rule clarifies that a group practice may have more than one billing number
assigned to it for this purpose.


 
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