February 2001 Bulletin

Background

The self-referral law, as enacted in 1989, prohibited a physician from referring a patient to a clinical laboratory with which he or she (or an immediate family member) has a financial relationship. Effective Jan. 1, 1995, Congress extended the law to prohibit a physician from referring patients to providers of 10 other categories of health care services if the physician (or an immediate family member) has a financial relationship with the service provider. The 10 affected services are: physical therapy services; occupational therapy services; radiology services and supplies; radiation therapy services and supplies; durable medical equipment and supplies; parenteral and enteral nutrients, equipment, and supplies; prosthetics, orthotics, and prosthetic devices and supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services. The law also prohibits an entity from billing for services provided as the result of a prohibited referral.

HCFA published a final rule covering physician self-referrals for clinical laboratory services on Aug. 14, 1995. The agency then published a proposed rule to implement the expanded law in 1998 and received almost 13,000 comments from the public. The new final rule modifies the proposed rule, addressing the most contentious issues raised in the proposal.


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