CMS: Physicians! Refer Not to Thyself

CMS has instructed Medicare contractors to use new claim adjustment reason code 213 beginning Jan. 1, 2009 when denying claims based on non-compliance with the physician self-referral prohibition. And the agency is turning to hospitals for information.

As written in the 2009 IPPS final rule, Section 1877 of the Act prohibits a physician from referring a Medicare patient for certain designated health services (DHS) to an entity with which the physician (or immediate family member(s)) has a financial relationship. A “financial relationship” includes both ownership/investment interests and compensation arrangements such as contractual arrangements.

CMS intends to send an information collection instrument, referred to as the Disclosure of Financial Relationships Report (DFRR), to 500 hospitals to identify noncompliance and practices. Participating hospitals have 60 days from the date on the cover letter or email transmission of the DFRR to complete the report. CMS originally estimated the time to complete the DFRR to be 31 hours, but has since changed this estimation to 100 hours. CMS has also increased the estimated costs associated with completing the DFFR from $1,550 to $4,080 per participating hospital.

Read MLN Matters article MM6131, on which this report is based, or CR 6131, for more information and a list of DHSs. And, of course, there are always exceptions to every rule. You’ll find these exceptions listed in Section 1877 of the Act.

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