New York Healthcare Law Blog

The new health care reform law contains an important provision that amends the Stark law and takes effect immediately: physicians who refer Medicare or Medicaid patients for MRI, CT scans and PET scans within their own group must inform patients in writing that they can obtain these tests from others. The referring physicians must also now provide a written list of suppliers who furnish those services in the area where the patient resides. This provision changes the application of the so-called "in-office ancillary services exception" permitting self-referrals in certain situations, making compliance difficult and potentially more confusing to patients. For example, this provision seems to suggest that physicians in large cities like New York must prepare lists of MRI, CT scans and PET scan providers in all neighborhoods where their patients reside - an extremely onerous undertaking.

The law also allows the Secretary of Health and Human Services to designate other categories of services (known as Designated Health Services, or "DHS" for Stark Law purposes) to require similar disclosures in relation to other types of services. While many smaller groups do not own MRI, CT scan or PET scan equipment, if the HHS requires that similar disclosures be provided in relation to more common types of imaging tests, such as ultrasound, the disclosure requirements will apply to a great number of small groups. Moreover, this provision has an effective date of January 1, 2010, which makes its application retroactive.

We will follow whether the HHS chooses to include other types of DHSs within the reach of this provision, and what guidance will it provide with respect to the retroactive reach of the new law.