Self- ReferralCongress enacted a physician self-referral law in 1993. The self-referral law prohibits Medicare and Medicaid payments when a physician refers any of ten "designated health services" (DHS) to an entity where the physician or his immediate family member has a financial relationship unless an exemption applies. Employees or contractors of physicians are exempt from this law when providing in-office ancillary services.
Physician employees or contractors are exempt from the self-referral law as long as their services are:
• supervised by the referring physician or by another physician in the group practice (meeting the supervision requirements under applicable Medicare and Medicaid payment or coverage rules);
• rendered in a building where the referring or group physician furnishes non-DHS services; or in a centralized site used exclusively by the group for providing DHS; and
• billed by the physician supervising the services, by a group practice of which the physician is a member, or by an entity that is wholly owned by such physician or group practice.
Certain financial relationships between the audiologist or speech-language pathologist and physician are protected (i.e., are "safe") as long as rules described in the "safe harbor" regulations are adhered to.
Anti-Kickback
Self-referral is enforced separately from the Medicare and Medicaid anti-kickback laws. While the self-referral law must involve physicians, anti-kickback regulations apply to anyone who "knowingly and willfully offers, pays, solicits, or receives remuneration in order to induce business reimbursed under the Medicare or Medicaid programs."
The safe harbor regulations define payment and business practices that will not be considered kickbacks, bribes, or rebates that unlawfully induce payment by Medicare or Medicaid programs. The regulations specify allowable financial and referral relationships between physicians or other providers and suppliers. A basic rule dominant in the safe harbor regulations is that financial transactions between potential referring parties be conducted at fair market value.
