CMS revises rules limiting physician self-referral

A clearer regulation likely will mean stepped-up government enforcement.

By Tanya Albert, AMNews staff. April 19, 2004.

Physician self-referral laws seem to be getting better with age, or at least easier to understand and more in line with how physicians practice.

On March 26, the Centers for Medicare & Medicaid Services published the third version of the 600-plus page regulation that governs how physicians make referrals to entities in which they have a direct or indirect financial relationship.

CMS made changes based on concerns voiced by physicians, health lawyers and others in health care. Experts say the latest version is clearer than those released in 1998 and 2001, and in some ways is more physician-friendly.

One of the biggest changes that should make doctors happy: Those who have been in compliance for 180 consecutive days but fall out of compliance for reasons beyond their control now have a 90-day grace period to re-comply.

But the government also has tried to close some loopholes. For example, the new rules make it harder for doctors to meet exceptions that allow them to share equipment, space and personnel for designated health services, including radiology and physical therapy.

"While they're not giving the industry everything it wanted, they've gone a long way in making improvements," said health lawyer Jeremy Miller, president of Miller Health Law Group in Los Angeles. "They have made good efforts to address unintended consequences and vague language."

The agency has "gone a long way in making the whole thing read more like English," added health lawyer William H. Maruca, a partner with Fox Rothschild in Pittsburgh. "People may not like or agree with the regulations, but they know where they stand."