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Common Stark law exceptions used by cardiology practice to furnish designated health services

Most cardiology practices rely on the Stark law’s in-office ancillary services exception to allow "within-practice" designated health service referrals. As a general matter, this exception allows cardiology physicians and their practices to:

  • Make referrals for designated health services within the practice;
  • Furnish those designated health services to practice patients;
  • Bill Medicare and Medicaid for the services; and
  • Retain and use the revenues earned from providing the services within the organization to pay practice expenses and physician compensation.

The in-office ancillary services exception has several essential requirements and restrictions relating to:

  1. The designated health services that may be provided and billed by the cardiology practice – referred to here as "Service Restrictions";
  2. Who provides or supervises the services in the practice – the "Performance and Supervision Test";
  3. Where the designated health services are furnished – the "Building" or "Site-of-Service" Test;
  4. How the designated health services are billed – the "Billing Test"; and
  5. The requirement that any cardiology practice other than a true solo physician practice must qualify as a bona fide “group practice” for Stark law purposes – the "Group Practice Requirements."
  6. For MRI, CT and PET services, a disclosure to the patient that he/she can receive services elsewhere – the "Patient Disclosure Requirement".

Physicians in group practices and solo practices can rely on the in-office ancillary services exception. The elements of the Stark law’s in-office ancillary services exception are discussed in the next sections.

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