In general, the Stark Act prohibits a “physician” from “referring” Medicare beneficiaries to a “facility” for the provision of DHS if the physician (or any of his or her immediate family members) has a “financial relationship” with the facility (DHS entity) – unless there is a legal or regulatory exemption (the Stark Act`s “referral ban”). The Stark Act also prohibits the DHS entity from billing Medicare or any other person or entity for illegally referred DHS (the Stark Act`s “billing prohibition”). DHS includes 10 categories of services, including clinical laboratory services, radiology and other imaging services. The mother-daughter relationship is a key factor in the analysis of the “single legal person”. As mentioned above, physicians who are only informally affiliated are not considered a group practice. In addition, the notice expressly states that Group Practice and the subsidiaries are to be treated as a single legal entity, “provided that [Group Practice] is the sole owner of the subsidiaries.” However, it is not necessary for the secondary practice itself to be considered a group practice. The CMS discussed the single legal entity requirement for group practice structures in an August 1995 Final Rule[4] (1995 Rule), which provided that a group practice cannot “be composed of two or more groups of physicians, each organized as separate legal entities.” However, the requirement of a single corporation would not prevent a single group practice from owning other corporations in order to provide services to the group practice. A 2001 final rule (2001 rule) added that physicians are members of a group practice while providing “patient care services” to patients in the group for the benefit of the group, even if those services (e.g., administrative services) are not billable by the group. [5] The law firms of George W. Bodenger, LLC, a law firm specializing in health law, are sought by a wide range of clients to provide innovative solutions to today`s legal and business challenges. For more information, see www.bodengerlaw.com. In other words, if all companies are considered a single economic entity under state law under this agreement, a doctor, osteopath or nurse employed by a parent company who commits malpractice while working for a subsidiary can hold the parent company liable for the resulting liability for professional misconduct.
In other words, if a parent company considers the activities of the subsidiary to be part of the activities of the parent company, the liability or obligations of the subsidiary could become the responsibility of the parent company. (2) Legal persons are absolutely identical in terms of ownership, governance and operation; and this law is so strict that it actually prevents a physician from referring a patient or recommending treatment or testing to be performed by his or her own medical practice, unless the physician`s financial relationship with his or her own practice qualifies for an exception, such as IOAS. If the practice is a group practice and not an individual practice, it must also meet detailed and strict requirements to qualify as a group practice to meet the IOAS exemption. The facts that CMS identified as relevant to its decision include: (1) all clinical staff and subcontractors of the subsidiaries would be employed or engaged by the parent company; and (2) although subsidiaries are separately enrolled in Medicare, remain certified, and contract with payers and health plans under their own invoice numbers, all affiliates` income and expenses would be treated as income and expenses from the parent company`s practice. It is possible that CMS came to a different conclusion if one or both of these factors were not present. For example, under the “75% rule” above, up to 25% of patient meetings in a given group practice can be hired by external sources as independent contractors. For example, if a diagnostic testing facility hired an independent radiology group to provide reading and related radiology services to a subsidiary that would bill under its tax identification number. Although CMS has issued a positive opinion on compliance with the definition of individual legal practice, all other elements of the definition of “group practice” must be completed for the group firm in question to comply with the IOAS exception. Specifically, a doctor`s office must operate as a “unified enterprise” with centralized decision-making, consolidated billing, accounting and financial reporting. When structuring a joint practice that wishes to rely on subsidiaries, particular care must be taken to ensure that the requirement of a `single undertaking` is met by the medical practice for the purposes of compliance with the Stark Act. The CMS`s most recent notice, CMS-AO-2021-1, dealt with single-entity requirements for group firms under 42 C.F.R. 411.352(a).
A doctor`s office must be considered a group practice to satisfy the ancillary services exemption commonly used by Stark Law. In particular, CMS answered the question of whether the applicant could be considered a group practice under 42 C.F.R. § 411.352(a) if it provided designated health care (“DHS”) services through a wholly-owned subsidiary medical practice that did not itself qualify as a group practice. CMS answered the question in the affirmative. A subsequent preamble to the regulation, which was rewritten in 2001 under Stark 2, also quoted this language and provided that “physicians may qualify for the perquisite exemption in practice if they meet monitoring, location and billing requirements.” The second preamble further provides that the billing requirement allows services “to be billed by the attending physician or supervisor, the group practice or an institution wholly owned by the group practice [emphasis added].” The Centers for Medicare & Medicaid Services (CMS) recently issued Notice No. CMS-AO-2021-01, which clarifies that groups of physicians who provide designated health care services (p. e.g., laboratory, imaging) through wholly owned subsidiary physician practices separately registered with Medicare and commercial payers are not themselves group practices under the Federal Medical Self-Referral Act (commonly referred to as the “Stark Act” or “Stark”). can be described as a group practice in Stark`s sense.
In particular, CMS stated that the particular facts would not preclude the medical practice plaintiff (group practice) from complying with the “single legal entity” requirement for a group practice under Stark if designated health care services to Medicare beneficiaries were provided through those wholly-owned subsidiary medical practices where the group practice employs or contracts with all staff. clinical and all revenues and expenses of subsidiaries are treated as revenue. and the costs of joint practice. For the purposes of acquiring medical practices, consolidation under a single tax identification number (“TIN”) was standard practice to meet the definition of a group practice under the Stark Act. This AOP specifies that an existing medical practice platform that acquires a medical practice may retain the existing legal entity of the acquired practice as a wholly-owned subsidiary.