Monthly Archives: December 2015

December 18, 2015

Physician Timeshare Arrangements: New Stark Option for Sharing Space with Visiting Specialists and Others

by Kim C. Stanger, Holland & Hart LLP

Recent Stark law amendments will make it easier for physicians to share space, and for hospitals to provide space, equipment, and services to visiting specialists and other physicians on a non-exclusive, “as-needed” basis. Hospitals and physicians may want to review their current lease arrangements to determine whether the new exception is a better fit for their current or future relationships and, if so, structure their arrangements accordingly.

Prior Law. The federal Ethics in Patient Referrals Act (“Stark”) generally prohibits physicians from referring patients for certain designated health services (“DHS”) payable by Medicare to entities with which the physician has a financial relationship unless the relationship is structured to fit within a regulatory safe harbor. (42 USC 1395nn; 42 CFR 411.353). Providing space or equipment to a referring physician generally creates a financial relationship that triggers Stark1; consequently, such arrangements generally needed to be structured to satisfy Stark safe harbors for leases of space or equipment. Unfortunately, those safe harbors required, among other things, that the physician enter a formal lease that provided for exclusive use of the leased premises or equipment during defined lease terms (42 CFR 411.357(a)-(b)); the physician and lessor were generally not permitted to share space or equipment during the lease term, nor could the lease be on an “as needed” basis. Traditional timeshare arrangements in which physicians share space or equipment on a non-exclusive basis did not satisfy Stark, thereby forcing physicians and their landlords to enter formal, inefficient, and sometimes impractical lease arrangements. Continue reading

December 1, 2015

Medicare Issues Final Rule Requiring Bundled Payments for Inpatient and Post-Acute Care Services for Hip and Knee Replacements in 67 Geographic Regions

by Pia Dean, Holland & Hart LLP

On November 16, 2015, The Centers for Medicare & Medicaid Services, CMS, issued a finalized rule requiring bundled payments for all lower extremity replacement and reattachment surgeries for Medicare fee-for-service beneficiaries in 67 geographic locations. The new payment model covers all Part A and B services provided to eligible beneficiaries for DRGs 469 (major joint replacement or reattachment of lower extremity with major complications or comorbidities) and 470 (major joint replacement or reattachment of lower extremity without major complications or comorbidities). The bundled payment program includes all items and services during the initial hospitalization and within 90 days of discharge. In addition to physician and inpatient hospital services, the bundled payment includes all services received in an inpatient psychiatric facility, long-term care hospital, inpatient rehabilitation facility, skilled nursing facility, home health agency, hospital outpatient setting, independent outpatient therapy, clinical laboratory, as well as durable medical equipment, Part B drugs, and hospice.

As initially proposed in July 2015, the bundled payment program would have started on January 1, 2016 and been implemented in over 800 hospitals in 75 geographic reasons having populations of more than 50,000 people. The finalized rule scales back the program to 67 geographic regions with a start date of April 1, 2016. Despite these concessions, CMS’ bundled payment initiative, called the Comprehensive Care for Joint Replacement (CJR), is a significant change to Medicare’s reimbursement policy. CMS’ previous bundled payment initiatives – most notably the Bundled Payment for Care Improvement (BPCI) Initiative – were voluntary, allowing only those hospitals, post-acute care facilities, and physician groups who wished to be involved to participate. Continue reading