Self-Referral Rules Finalized by HCFA

Oncologists who have a financial interest in—or are thinkingaboutinvesting in—a related business that provides such things as magnetic resonance imaging, computed tomography, or radiology services should payattention to the final rules from the Health Care Financing Administration(HCFA) on "self-referral." The good news is that the final rules aresubstantially preferable to the rules that HCFA proposed in 1998. In general, aphysician cannot refer a Medicare or Medicaid patient for any of 10 listedservices if he or any of his immediate family has a financial interest in thatfacility.

William Jessee, MD, CMPE, president of the Medical GroupManagement Association, said his group is "pleased that HCFA has includedseveral important changes in the long-awaited Stark II physician self-referralrules." Stark refers to Rep. Pete Stark (D-Calif), who is responsible forputting these restrictions into law. Among the "important changes"referred to by Dr. Jessee are creation of a new exemption for indirectcompensation agreements, expansion of the in-office ancillary servicesexception, and creation of a new exception for compensation of faculty inacademic medical centers. HCFA also changed the way it will define "grouppractices," making it easier for groups to qualify as a "single legalentity" and giving them more wiggle room in terms of the self-referralrules.