Bass, Berry & Sims attorney Danielle Sloane explained how a recent Centers for Medicare & Medicaid Services (CMS) advisory opinion could provide more flexibility for how physician practice groups, like radiology practices, are structured. The Stark Law prohibits physician groups from referring Medicare or Medicaid patients for certain designated health services if the referrer has a financial relationship with the entity, preventing potential kickbacks. However, there is an exception within the Stark Law that applies to entities that qualify as a “group practice” and the recent CMS advisory opinion interprets the definition of “group practice” to permit physician groups to use and bill through wholly owned subsidiaries that are themselves practices that are separately enrolled in Medicare.

“For diagnostic-only practices where they generally receive referrals from outside treating physicians, this would not be as important. However, for any IR practices that are providing imaging, drugs or other services within their practice, it is noteworthy—particularly for those involved in consolidation transactions,” Danielle told Radiology Business.

“It demonstrates CMS’ continued recognition that the healthcare industry is innovating, and the need for flexibility to foster that innovation,” Danielle said. “This is not likely to increase enforcement given it is a positive advisory. In other words, it outlines what is permissible and doesn’t highlight a problematic structure.”

The full article, “CMS Stark Law Advisory Grants Radiology Practices More Flexibility in Structuring Their Organizations,” was published by Radiology Business on July 14 and is available online.

Read more about the recent CMS advisory opinion in the firm’s analysis here.