By Jed Morrison 

Another landmine lurking in the recently enacted healthcare reform bill is a requirement that physicians who provide advanced imaging services such as MRI, CT and PET in their office, who wish to take advantage of the in-office ancillary services exception to the Stark Statute, must disclose in writing to the patient at the time of the referral that the patient may obtain the services from someone other than the referring physician (or his medical group), and also provide a list of other suppliers of imaging services in the area from whom the patient may obtain services. Texas law already requires physicians with an ownership interest in a facility to notify their patients of such relationship, although that requirement is seldom enforced. This is the first time that Medicare has enacted a similar requirement.

The statute, alarmingly, is effective January 1, 2010. Thus, any referrals for these advanced imaging services after such date, for which a medical group does not comply with the disclosure requirement, would constitute an improper claim under the Stark statute. This drastic - indeed radical - remedy represents a severe compliance risk for all medical groups that provide imaging services within their facilities.

Although complying with the provision is not difficult, the immediate effective date puts medical groups in a difficult position once they have learned of the provision and begin to comply. Are all Stark referrals prior to that point illegal referrals, and such amounts must be refunded to Medicare? If they do not refund, is it a False Claim's Act violation? It is doubtful that was Congress' intent. The provision probably was drafted early in the legislative process, sometime in 2009, and thus, the January 1, 2010, effective date appeared to be easily attainable. Nonetheless, the law is clear on its face, and it may take Congressional action, rather than a CMS regulation, to change the effective date.

While it remains to be seen what effect failure to disclose will have on imaging services furnished to Medicare and Medicaid patients prior to the date that a medical group institutes these disclosure requirements, referring physicians should immediately put into place these notification requirements for all CT, MR and PET services ordered and performed by those physicians. Congress or CMS need to clarify the matter, but providers in the meantime should be proactive about addressing this issue.

If you have any questions, please contact Jed Morrison at (210) 978-7780 or jmorrison@jw.com or any member of the Jackson Walker L.L.P. Healthcare Section.