June 07, 2014
Under federal and Louisiana self-referral law, physicians practicing in Louisiana must disclose to their patients certain ownership and/or investment interests that they have in hospitals or outside service companies—such as durable medical equipment companies, laboratory companies and compound pharmacy companies—to which they refer their patients. This Alert does not address how any such referral relationships between physicians and hospitals or outside service companies should be structured to comply with federal or Louisiana self-referral or anti-kickback laws, which should be separately analyzed with competent healthcare counsel, but only addresses the disclosures required in connection with any such referral relationships.
Federal Self-Referral Disclosure Requirements
Under federal self-referral law (also referred to as the federal Stark Law), as amended by the recently enacted Patient Protection and Affordable Care Act (“PPACA”), certain disclosures must be made by physicians who, in reliance on the Stark Law whole hospital exception, refer patients for certain designated health services (“DHS”) to hospitals in which they have an ownership/investment interest. Specifically, Section 6001 of PPACA amends the whole hospital exception to require that any hospital in which physicians have an ownership/investment interest have procedures in place to require that any referring physician owner or investor discloses to the patient being referred, by a time that permits the patient to make a meaningful decision regarding the receipt of care, (i) the ownership or investment interest, as applicable, of such referring physician in the hospital; and (ii) if applicable, any such ownership or investment interest of the treating physician (if the referring physician is not the treating physician). Section 6001 of PPACA also requires that the hospital disclose the fact that the hospital is partially owned or invested in by physicians on any public website for the hospital and in any public advertising for the hospital.
As amended by the PPACA, federal Stark Law also requires that certain disclosures be made by physicians who, in reliance on the Stark Law exception for in-office ancillary services, refer patients for certain imaging services to entities in which they have an ownership/investment interest, or with which they have a compensation arrangement. Specifically, Section 6003 of PPACA amends the in-office ancillary services exception to include a requirement that, in connection with magnetic resonance imaging (“MRI”), computed tomography (“CT”), and positron emission tomography (“PET”), the referring physician must inform the patient in writing at the time of the referral that the patient may obtain the services for which the patient is being referred from a person other than the referring physician (or an immediate family member of the referring physician) and provide such patient with a written list of suppliers who furnish such services in the area in which such patient resides. Although the Centers for Medicare and Medicaid Services (“CMS”) have not issued a prescribed form of disclosure, the CMS has outlined additional disclosure requirements in its Physician Fee Schedule updates.
Louisiana Self-Referral Disclosure Requirements
Further, under Louisiana self-referral law, a physician must disclose to a patient the existence and nature of any financial interest the physician has in a health care provider (other than the physician’s own group practice) to which the physician refers the patient for health care items or services, and clarifies that a “significant” ownership or investment interest (sufficient to meet the definition of “financial interest”) means an interest that represents five percent (5%) or more of the gross assets in dollar amount or value, or the voting securities of, the health care provider to which referral is made. Rules promulgated by the Louisiana Board of Medical Examiners prescribe the specific form of disclosure required by the Louisiana self-referral law.
Please contact us for more information about these disclosure requirements or if you need assistance in meeting such requirements.
Disclaimer: The information provided herein (1) is for general information only; (2) does not create an attorney-client relationship between the author or the author’s firm and the reader; (3) does not constitute the provision of legal advice, tax advice, or professional consulting of any kind; and (4) does not substitute for consultation with professional legal, tax or other competent advisors. Before making any decision or taking any action in connection with the matters discussed herein, you should consult with a professional legal, tax and/or other advisor who should be provided with all pertinent facts relevant to your particular situation. The information provided herein is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information.Back