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New Federal Stark Law Requirement Effective January 1, 2011

December 2010

Written Patient Disclosure Required for MRI, CT and PET Services under In Office Ancillary Exception

Physicians and group practices taking advantage of the frequently used “in-office ancillary” exception (the “IOA Exception”) to the Federal Stark Law’s (“Stark”) prohibition against self-referrals must now provide to patients a written disclosure (the “Patient Disclosure”) when referring such patients for certain advanced imaging services to be performed in the office of the referring physician or group practice. As discussed in further detail below, the Patient Disclosure must (i) inform patients that they may receive the services from another supplier and (ii) provide a list of alternative suppliers from whom the patients may receive the services. Physicians and group practices must be prepared for this impending change to ensure compliance.

New IOA Exception Disclosure Requirement

After December 31, 2010, in addition to meeting the current requirements of the IOA Exception (see background discussion below), physicians utilizing the IOA Exception for certain MRI, CT, and PET services (the “Advanced Imaging Services”) will also be required to provide patients with a written Patient Disclosure at the time of the referral containing the following information:

  • A statement that the same services are available to the patient through persons other than the referring physician or group practice; and
  • A listing of at least five other suppliers (including, at a minimum, the name, address, and telephone numbers of such suppliers) who provide the same services within a 25-mile radius of the office of the referring physician or group practice at the time of the referral; if there are less than 5 suppliers located within the 25-mile radius, then all such suppliers should be included in the list; if there are no suppliers of the service within the radius, the listing is not required.

The Patient Disclosure must be written in a manner sufficient to be reasonably understood by all patients and must be provided with respect to each referral for Advanced Imaging Services under the IOA Exception, regardless of whether the referred patient received such disclosure in the past. While physicians are not required to document their provision of the Patient Disclosure, it is best to maintain such documentation to demonstrate compliance (for example, via notation in the patient’s chart, or by obtaining the patient’s written acknowledgment of the receipt of the Patient Disclosure).

Background – Stark and the IOA Exception

Under Stark, a physician is generally prohibited from referring patients for certain “designated health services” to entities with which the referring physician has a financial relationship, unless an exception applies. Currently, the IOA Exception generally excludes from the Stark prohibition the referral of ancillary services (e.g., diagnostic services) that are performed or supervised by the referring physician or by a member of the referring physician’s group practice if the services are provided in the office of, and billed by, the referring physician or group practice. Beginning January 1, 2011, the Patient Disclosure is an additional requirement of the IOA Exception with respect to the referral of Advanced Imaging Services.

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For specific disclosure language or for further guidance with respect to provision of the required Patient Disclosure, please contact:

David M. Hyman ¦ Member of the Firm ¦ (973) 530-2009 ¦
Daniel A. Schwartz ¦ Member of the Firm ¦ (973) 530-2005 ¦
Nicole DiMaria ¦ Counsel ¦ (973) 530-2111 ¦
William J. Cannici Jr. ¦ Associate ¦ (973) 530-2183 ¦