Physician Law : Pennsylvania Health Law Lawyer & Attorney : Fox Rothschild LLP : serving Philadelphia, Pittsburgh, Allentown, Erie, Upper Darby Twp

On June 29, 2011, the New Jersey Senate voted to pass Senate Bill No. 2780, which would amend existing New Jersey health care facility licensure statutes to require that one-room surgical practices operating in New Jersey obtain state licensure.  The term “surgical practice” is essentially defined to include any structure or suite of rooms that has no more than one room dedicated for use as an operating room, has one or more post-anesthesia care units or dedicated recovery areas and is established by a physician, physician-known entity or other professional practice for use by the physician’s private practice.

The bill, if passed, would impose various physical plant and functional requirements on one room surgical suites unless the entity is certified by the Centers for Medicare and Medicaid Services (“CMS”) as an ambulatory surgery center, but would exempt these entities from the New Jersey health care facilities tax assessment applicable to true ambulatory surgery centers.

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According to a new report from the Pennsylvania Health Care Cost Containment Counsel (also known as PHC4), 19 new ambulatory surgery centers (ASCs) opened up in Pennsylvania in the past year. This bring the total number of ASCs in Pennsylvania to 262.  According to the report, ASCs generally remain profitable.

Although growth of ASCs means more independence for physicians and more choices for patients, acute care hospitals in the state are likely not thrilled with this news.  Undoubtedly lobbying pressure to stem the growth of outpatient centers will continue, so physicians who are considering investing in or developing an ASC should move quickly before Certificate of Need or other regulatory hurdles are put in place.

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For physicians in the process of developing physician-owned hospitals, the race is on to get those facilities up and running by December, 2010. The recently enacted “Health Care and Education Affordability Reconciliation Act of 2010” amends the Stark law to once and for all prohibit physician-owned specialty hospitals unless: (1) the hospital has a Medicare provider agreement by December 31, 2010; and (2) was not converted from an ambulatory surgical center to a hospital after March 23, 2010. Hospitals grandfathered under the above provisions are prohibited from, among other things, expanding their physician ownership or the number of ORs or beds from what they were on December 31, 2010.
 

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Among its many provisions, the newly signed Patient Protection and Affordable Care Act has imposed a new requirement on physicians who rely on the Stark "In-Office Ancillary Services" exception.  Physicians who refer patients for CT, MRI or PET (or other Stark services as designated by the Secretary of HHS) that will be provided by the referring physician's practice under the Stark In-Office Ancillary Services exception must now inform the patient in writing at the time of the referral that the individual may obtain the services for which the individual is being referred from a person other than the referring physician's practice, and provide the patient with a written list of suppliers (who furnish such services in the area in which such individual resides.

The provision in the new law has an effective date of January 1, 2010, so absent clarification from Congress or HHS, the above requirement is effective immediately. 

 

 

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Under the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), all Medicare suppliers of the technical component of advanced imaging services have until by January 1, 2012 to become accredited by an accreditation organization designated by the Secretary of Health and Human Services . This includes physicians, non-physician practitioners, and physician and non-physician organizations paid for the technical component of advanced imaging services under the Medicare Physician Fee Schedule. 

Advanced diagnostic imaging procedures include diagnostic magnetic resonance imaging (MRI), computed tomography (CT), and nuclear medicine imaging such as positron emission tomography (PET).

CMS has named the American College of Radiology (ACR), the Intersocietal Accreditation Commission (IAC), and The Joint Commission (TJC) as the accrediting organizations.

 

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As was predicted by many, the Deficit Reduction Act is continuing to cause a major shake-out in the imaging center industry.  According to the Florida Business Journal, a major Florida-based imaging center company has filed for Chapter 11 reorganization and will close 5 of its 17 centers.  As this trend continues, many physicians who invested in centers in hopes that returns would help bolster practice revenues are now scrambling to figure out what their personal exposure might be if their investments go under - and rightly so.  Many such investments required investors to sign on to personal guarantees with lenders and landlords which could put investors' personal assets at risk in the event of a default.  For more information on options for ailing imaging center investments, see the following article in Physicians News Digest at: http://physiciansnews.com/law/108rodriguez.html.  

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Much has been in the news lately about the Children's Health and Medicare Protection (CHAMP) Act of 2007 recently introduced by the House democrats.   The Bill's proponents claim that if enacted it will provide insurance coverage for millions of children and improve and strengthen Medicare for America's seniors and people with disabilities.  What Physicians -- particularly surgeons who may be thinking of developing a specialty hospital -- may not know is that  the Bill also contains language that would essentially eliminate the ability of physicians to invest in hospitals (specialty or otherwise) and would impose new requirements on existing physician-owned hospitals.  This language, found at Section 651 of the Bill, eliminates the whole hospital exception to the Stark law so that physicians could not refer to hospitals in which they have an ownership interest.  Although existing arrangements would be grandfathered, the grandfathered hospitals will have only 18 months to meet a number of new requirements related to growth, disclosure of ownership, limiting physician ownership to an aggregate of no more than 40% of the facility and no more than 2% individually, and other patient disclosure requirements.

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As lucrative ancillary services continue shift from hospitals to outpatient sites, hospitals are anxious to find ways to keep they're hand in the mix.  Not surprisingly, physician-hospital joint ventures are all the rage.  While such ventures can be legally structured, the stakes of failing to comply with applicable legal requirements can be very high.  For important considerations in structuring joint ventures, see the following article in Physicians' News Digest: Structuring Contractual Joint Ventures. 

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The Centers for Medicare and Medicaid Services (CMS) announced today in the federal register that it will delay publication of the much anticipated Phase III final Stark self-referral regulations (which were due out by today) until March 23, 2008. According to CMS, the delay is necessary in order to allow time to review and consider the extensive public comments on the Interim Final regulations (Phase II) of the regulations which were published in 2004.  Until publication of Phase II, the Phase II rules will remain in place.  

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On February 19, 2007 (but effective retroactively to January 26, 2007), the Centers for Medicare and Medicaid Services (CMS) rescinded the controversial IDTF transmittal referrenced in the February 18, 2007 entry on this Blog.  A copy of the notice can be found here: Transmittal 187.  Those guidelines would have imposed major new conditions on independent diagnostic testing facilities (IDTFs), and would have invalidated many leasing arrangements. No word yet as to whether CMS is planning to re-publish the guidelines any time soon.  Stay tuned!

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A recent bill proposed by the Pennsylvania House of Representatives would, among other things, reinstate the Certificate of Need (CON) program in Pennsylvania.  Specifically, House Bill 305, introduced on February 7, 2007, would require anyone proposing to make capital expenditures in excess of $500,000 for replacement technology or $1,000,000 for equipment or improvements in connection with a covered health care facility, to obtain a CON.  Facilities subject to the CON requirements would include, among others, ambulatory surgery centers, imaging centers and cancer treatment centers using radiation therapy. 

Of even more concern to physicians is the fact that the legislation includes self-referral prohibitions similar to the federal Stark statute that would prohibit physicians from referring to health care entities (including ASCs which are not currently covered by Stark) in which they have a financial interest.  All physicians with ancillary service arrangements in Pennsylvania need to pay close attention to this and other efforts by State legislators to curb physician investment in ancillary services.

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Building and/or investing in an ambulatory surgery center (ASC) is a great way to gain control over the surgical side of your practice and can also be an excellent source of ancillary revenue.  However, start-up costs can be prohibitive and building and running an ASC can be time consuming.  Not surprisingly, many physicians are tempted to "partner" with other investors as a way of sharing the start-up costs and the administrative burdens.  As discussed in the following Physician's News Digest article, there are a host of considerations you should take into account in choosing the right ASC partner. www.physiciansnews.com/law/806riviezzo.html

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