Physician Owned Hospitals Must File Annual Report
by December 1, 2013 to Comply with Stark II
by Michael Schulze
The Centers for Medicare & Medicaid Services (“CMS”) defines hospitals with physician owners or investors as Physician Owned Hospitals. Physician Owned Hospitals utilizing the Stark II whole hospital and rural provider exceptions must now file an annual report detailing the ownership and investment interests in the hospitals held by physicians in order to continue to meet the exceptions. Physician Owned Hospitals must file this annual report by December 1, 2013.
Congress required the annual report in Section 6001 of the Affordable Care Act; however, CMS delayed implementing the requirement while it determined how to receive and process the information. Then on September 13, 2013, CMS issued an MLN notice announcing its new policy requiring the submission of the annual reports.
Under the new policy, Physician Owned Hospitals utilizing the whole hospital or the rural provider exception to Stark II must file an updated Medicare Enrollment Application Form CMS-855A by December 1, 2013. The CMS-855A requires every physician-owned hospital to report every investor entity that has any physician owners and any individual physician owners with an investment interest in the hospital. If a Physician Owned Hospital submitted a CMS-855A after December 1, 2012 that complied with the reporting process, that CMS-855A will count for the hospital’s first annual notice. After this first required notice, Physician Owned Hospitals can satisfy the annual reporting requirement by updating or verifing their physician investor information in the Medicare Provider Enrollment, Chain and Ownership System (“PECOS”).
It is critical that every Physician Owned Hospital submit the required annual notice by December 1, 2013. Failure to do so would cause the hospital’s financial relationships with their investor-physicians to no longer meet the whole hospital or rural provider exceptions. If the physicians’ ownership no longer meets the Stark II exception, the physicians will be prohibited from referring any Medicare beneficiaries to the hospital for any inpatient or outpatient hospital services or other designated health services. Additionally, any bills submitted by the hospital to Medicare for such referrals will be disallowed and could result in substantial financial penalties.
Nov. 26, 2013 “Physician Owned Hospitals Must File Annual Report by December1, 2013 to Comply with Stark II.” Louisiana Hospital Association Impact Law brief, Volume 28, (No.10).