What is self referral - Laboratory billing Guide

Physician Self-Referral (Stark II) Laws 

Since January 1995, the Social Security Act, Section 1877 (42 U.S.C. section 1395nn) prohibits physicians from making self-referrals for certain designated health services (DHS) involving the Medicare and Medicaid Programs. DHS includes the following items and services: 

* Clinical laboratory services 
* Physical therapy services Occupational therapy services 
* Radiology services 
* Radiation therapy services and supplies
* Durable medical equipment and supplies 
* Parenteral and enteral nutrients, equipment, and supplies 
* Prosthetic and orthotic devices and supplies 
* Home health services 
* Outpatient prescription drugs
* Inpatient/outpatient hospital services 

The law also prohibits a physician or his or her immediate family from having a financial relation- ship with an entity to which Medicare patients are referred to receive a designated health service. A financial relationship may exist in the form of an ownership, investment interest, or compensation arrangement.

Penalties for Violations of the Law 

The civil monetary penalty is a maximum of $15,000 for each service billed or furnished as the result of a prohibited referral. A total maximum penalty of $100,000 can be applied for each scheme to evade the requirement.


PHYSICIAN SELF-REFERRAL

Stark Legislation or Physician Self-Referral Legislation, 42 USC 1395nn, limits certain physician referrals made to entities where the physician has a financial relationship. A physician should make no referrals of laboratory tests to a laboratory in which the physician (or the physician’s immediate family members) has a financial relationship unless the referral falls under the "in-office ancillary services" exception. Michigan Department of Health and Human Services (MDHHS) defines the following terms as they relate to the Physician Self-Referral portion of the Stark Legislation:

PHYSICIAN'S OFFICE LABORATORY

A Physician’s Office Laboratory (POL) meets the following parameters:

* A physician or a group practice owns the laboratory.

* The laboratory performs testing only on specimens generated by the physician owner.

The laboratory is subject to the following policies:

* Laboratory claims must be billed using the physician's provider NPI number.

* Laboratory claims are subject to the practitioner laboratory daily reimbursement limit.

* The laboratory must not accept referrals from physicians outside of the physician's practice or group practice.


DUAL PHYSICIAN'S OFFICE/INDEPENDENT LABORATORY

A dual physician's office/independent laboratory meets the following parameters: 

* A physician or a group practice owns the laboratory.

* The laboratory is a physician's office laboratory for those specimens generated by the physician owner.


* The laboratory is an independent laboratory for those specimens that are referred by physicians outside of the physician's practice or group practice.

Dual physician's office/independent laboratories are subject to the following policies: 

* Laboratory claims generated by the physician owner must be billed using the physician's provider NPI number. These claims are subject to the practitioner laboratory daily reimbursement limit.

* Laboratory claims generated by physicians outside of the physician's practice or group practice must be billed using the independent laboratory NPI number. These claims are subject to the independent laboratory daily reimbursement limit.

* The laboratory must not accept referrals from immediate family members.


INDEPENDENT LABORATORY

An independent laboratory meets the following parameters:

* It may be owned by:

* A physician or a group practice.

* A non-physician.

The physician-owned independent laboratory is subject to the following policies:

* The laboratory must not accept referrals from the physician owner or his immediate family members.

* Laboratory claims are billed using the independent laboratory NPI number.

* Laboratory claims are subject to the independent laboratory daily reimbursement limit.

The non-physician owned independent laboratory is subject to the following policies:

* The laboratory must not accept referrals from the owner or his immediate family members.

* Laboratory claims are billed using the independent laboratory NPI number.

* Laboratory claims are subject to the independent laboratory daily reimbursement limit.

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