CMS tightened regulations on physician self-referral and indirect compensation arrangements in its 2022 Medicare physician fee schedule final rule.
The agency released the Modernizing and Clarifying the Physician Self-Referral Regulations Final Rule in January, which made changes to Stark Law, according to a JDSupra report authored by Matthew Westbrook, healthcare regulatory compliance associate at Proskauer. CMS has since discovered issues with the indirect compensation arrangements guidance, and further clarified those oversights in the 2022 Physician Fee Schedule Final Rule, issued Nov. 2.
Three details clarified in the final rule:
1. Indirect compensation arrangements exist if referring physician compensation depends on the volume or value of referrals for an entity providing designated health services, and the compensation unit isn't fair market value. Payment for leased office space or equipment used at the facility can also be considered indirect compensation.
2. CMS clarified an "individual unit" of physician pay as being based on the provided item, service or time. The individual unit of compensation only includes services the physician provides, not services performed by a physician's employee, independent contracts, group practice members or any other individual. CMS made this change from the proposed rule "apparently in response to industry pushback," according to Mr. Westbrook.
3. The final rule prohibits the use of some service-based compensation formulas in leasing office space or equipment, focused on formulas that base the per-unit charges on patient services provided to the lessor.