SVT Comments on Stark II Final Rule

June 4, 2000

VIA HAND DELIVERY

Michael McMullan
Acting Deputy Administrator
Health Care Financing Administration
Department of Health and Human Services
Hubert H. Humphrey Building, Room 444-G
200 Independence Avenue, S.W.
Washington, D.C. 20201

RE: HCFA-1809-FC

Dear Acting Deputy Administrator McMullan:

On behalf of the Society of Vascular Technology ("SVT") and the Society of Diagnostic Medical Sonography ("SDMS"), we want to thank you for the opportunity to comment on the Stark II Final Rule ("Final Rule"). 66 Fed. Reg. 856 (Jan. 4, 2001). SVT is a multidisciplinary professional society comprised of over 3,500 members including vascular technologists, nurses, and other allied health professionals as well as 700 physician members. SVT is dedicated to the advancement of noninvasive vascular technology. SDMS represents 11,600 sonographers and vascular technologists who perform echocardiography, obstetrical, abdominal, and vascular ultrasound services.

SVT and SDMS members appreciate how arduous a task it has been for the Health Care Financing Administration ("HCFA") to promulgate this important rulemaking. Nevertheless, they are concerned about the impact several of the provisions of the Final Rule will have on their ability to provide high-quality ultrasound services in a rationale, efficient and fiscally sound manner. As the largest representative bodies for the providers of ultrasound services and physician-users of ultrasound services, both organizations seek to decrease, and eventually eliminate, the existing problem of limited access to clinically-important ultrasound services, and to continually improve the quality of studies available. With that said, however, we believe that parts of the Stark II Final Rule threatens our ability to advance either goal.

Our comments are limited to six main issues. These issues relate to: (1) supervision of ultrasound services under the in-office ancillary services exception, (2) HCFA's decision to treat "under arrangements" financial arrangements between hospitals and physician-owned entities solely as a compensation relationship and not an ownership interest, (3) the professional interpretation of outpatient ultrasound studies performed in the hospital setting, (4) referrals for ultrasound services by physicians outside a group practice, (5) inclusion of ultrasound services that are incidental to another major procedure, and (6) the inclusion of A-Scans and B-scans as a designated health service.

We appreciate your considered analysis of our concerns.

I. The Supervision Issue

A. Summary of the Issue

The "in-office ancillary services" exception to the Stark Law is the primary mechanism vascular surgeons, obstetricians, cardiologists and other physicians use to protect referrals for ultrasound services made within his or her practice. Arguably, as originally proposed, the most difficult element of the exception for physicians to meet, particularly those in small group practices, would have been the requirement that the designated health service ("DSH") must be provided by the ordering physician, another member of his or her group practice, or another person acting under the direct supervision of the ordering physician or another member of his or her group practice.

SVT and SDMS appreciate and strongly support HCFA's decision in the Final Rule to simplify the in-office anciallry services exception by changing its original direct supervision proposal to a requirement whereby the supervising physician need only provide that level of supervision necessary to satisfy the applicable Medicare payment or coverage rule for a particular DHS. Despite the flexibility and clarity that is supposed to be the end result of this critical modification, as applied to ultrasound services, this outcome is undercut by serious inconsistencies in the recently announced supervision rules for ultrasound services. /

B. Background

Diagnostic services, including ultrasound, are provided under three possible levels of supervision. The levels of supervision are: personal (meaning that the physician supervisor must be in the room where the service is provided), direct (meaning the supervising physician must be in the office suite where the service is provided), or general. In general supervision, the technologist or sonographer who performs the service is acting under the overall supervision of a physician who is responsible for the training of the sonographer or technologist, the equipment used, and the performance of the study, but the supervising physician need not be in the office suite when each service is provided. In the final rule regarding that Medicare physician fee schedule for FY 1998, HCFA set forth the supervision requirements applicable to payment for diagnostic services. 62 Fed. Reg. 59048 (Oct. 31, 1997). To the disbelief of ultrasound technical component providers and physicians, HCFA called for direct supervision of ultrasound services although the clearly established standard of medical practice for almost all ultrasound services is general supervision. /

The ruling was challenged vigorously by the ultrasound community immediately upon publication causing HCFA to convene a meeting with the stakeholders to discuss physician supervision of ultrasound services. At this meeting more than forty physician and other practitioner societies agreed that, except in the specific instances (See, Footnote 1), the standard of practice for ultrasound services is general supervision. Based on this consensus, HCFA informed the stakeholders that it would issue a program memorandum or similar authoritative document stipulating general supervision as the requisite standard for most ultrasound services. In the interim, HCFA notified carriers to disregard the rulemaking as it related to supervision, and continue to follow whatever supervision standards it had in place prior the publication of the final rule. This action brought some immediate order to the chaos caused by the supervision standard, but only part of the problem was alleviated because some carriers still had outdated supervision rules in place that called for direct supervision of ultrasound services.

More than three years have passed since that notification, and HCFA only just issued the promised policy six weeks ago. / Generally speaking, the PM assigns a level of supervision that is consistent with the accepted standards of medical practice to most ultrasound procedures. In several instances, however, the new supervision standards conflict with current practice, as well as longstanding Medicare policy that has been established through the program's carriers and intermediaries who have permitted these
services to be performed under less stringent supervision requirements. / See, Attachment A, letter to Thomas Scully from a coalition of provider organizations (explaining concern with the supervision requirements mandated by the program memorandum for particular services).
These unexpected and unsupported changes in supervision rules has created considerable confusion, fret and anger among ultrasound providers. Physician providers of ultrasound services are concerned about the threat of legal sanctions under the Stark Law for not meeting a supervision requirement considered to be clinically unnecessary by the medical community and the providers of the ultrasound service itself. Furthermore, both physicians and technical component providers are extremely concerned regarding the impact the higher levels of supervision will have on their ability to continue to provide ultrasound services as part of their practice. / Our organizations fear that access to vital obstetric ultrasound services will be badly jeopardized by the requirement that many of the ultrasound studies performed for this patient population now require direct physician supervision.

C. Resolution of the Problem

HCFA must issue another program memorandum before July 1st stating that, except in a few specific identified instances, only general supervision of the provision of ultrasound services is required for the purposes of coverage and payment of ultrasound services. SVT and SDMS would be pleased to work with HCFA to identify those ultrasound services that require a higher level of supervision and to review the document prior to its release.

II. "Under Arrangements" Financial Relationships

SVT and SDMS strongly agree with HCFA's decision to treat under arrangements relationship between hospitals and physician-owned entities as compensation relationship only, and not an ownership relationship. Under arrangement relationships are an important business structure that increases access to critical ultrasound services, while avoiding unnecessary duplication of costs and resource waste from the underutilization of expensive medical equipment. Moreover, our organizations feared that had HCFA determined that such relationships should be treated as both an ownership and a compensation arrangement, the administrative burden associated with restructuring these arrangements would lead to a significant disruption in patient care.

III. The Professional Interpretation Issue

A. Summary of the Issue

Another issue of tremendous concern to physicians whose practice depends greatly on radiologic and ultrasound diagnostic services as well as the technologists and sonographers that provide the technical component of the study is the definition of "radiology and ultrasound" services. Although though the Stark Law specifically states that it is not intended to reach physician services, and despite many comments in opposition to HCFA's position in the proposed rule, HCFA continues to define the statutory term "radiology and ultrasound" services to mean both the professional component (the read or interpretation of the study) and the technical component of these services. The concern regarding this interpretation of the term, which we believe is inconsistent with the statute itself, is that is creates a significant obstacle to the delivery of ultrasound services provided anywhere, but, in a physician's office.

The following scenario illustrates the problem. Consider a vascular surgeon who has admitted an elderly patient to a hospital with gangrene in the leg. The vascular surgeon orders an ultrasound examination of the leg in an effort to determine if the leg should be amputated or if, by surgically creating an arterial graft (a new section of artery), the leg may be saved. In so doing, the vascular surgeon makes two referrals. He or she refers the patient to the hospital for the purpose of the technical component of the service (i.e., the actual ultrasound images themselves), and to himself or herself or his or her group practice for the professional component of the service (i.e, the "read" or interpretation of the ultrasound service). Because the professional component portion of a radiology and ultrasound service is considered a designated health service covered by the Stark Law, there must be an exception to the self-referral prohibition in order for a member of the ordering physician's group practice to provide the interpretation service.

SVT and SDMS recognize that under the Final Rule, the vascular surgeon may read and bill for interpreting the study in the hypothetical set forth above provided he or she personally performs the interpretation and separately bills for the service. / Significantly, however, another member of the referring physician's group practice who may be assigned by the practice to round at the hospital and read all the radiologic and ultrasound studies performed on practice patients could not do so under the Final Rule. The only exception that would permit this interpretation is the in-office ancillary services exception. This exception is not applicable to the rounding surgeon's read of the ultrasound service, however, because the read will not be made "in the office," but, in the hospital where the patient has been admitted or evaluated as an outpatient. The same issue is raised with respect to interpretations provided in other institutional settings.

HCFA's interpretation of the statute forbids physicians from sharing the workload of interpreting studies that are critical to their decision-making with their trusted practice colleagues. In our view, this result is absurd. This is particularly true since there is no chance that the surgeon (or other physician) will admit a patient to a hospital for the purpose of being able to bill for interpreting an ultrasound study, a service that he or she will be paid less than $20 for completing. Furthermore, this outcome interferes with one of the core reasons for physicians to practice in a group, to share patient care, as it allows patients greater access to a physician. Shared responsibility across a number of practice members is vital to the operation of a surgical practices where the group members alternate time spent in the operating room and time spent in the office or hospital in order to ensure that at least one group member is always readily available to attend to patient needs.

B. Resolution of the Problem

In order to address this issue, SVT and SDMS urge HCFA to amend the Final Rule to clarify that not only the ordering physician, but also other "physicians in the [ordering physician's] group practice" may provide the professional component of a radiology or ultrasound service (1) where a physician in the group has ordered the technical component service, (2) when the professional component is provided at an institutional provider, and (3) the patient has been admitted to the institution, either as an inpatient or outpatient, at which the professional component service is provided.

IV. Integral versus Incidental Radiology or Ultrasound Services

A. Summary of the Problem

In the proposed rule, HCFA proposed to except from the definition of designated health services diagnostic tests performed in conjunction with major invasive procedures, when such tests were integral to the major procedure. Specifically, HCFA noted that physicians would not "routinely refer patients for [major procedures] in order to profit from unnecessary radiology procedures." 63 Fed. Reg. 1659, 1676 (Jan. 9 1998). As a result, radiology services that were peripheral, incidental, or secondary to a non-designated health service would have been excluded from the operation of the Stark Law. Despite the practical logic of this proposal, HCFA modified this position in the Phase I Final Rule. Now, only those radiology procedures that are integral to the performance of, and performed during, a non-radiology medical procedure are excluded. 66 Fed. Reg. 856, 956 (Jan. 4. 2001).

Based on experience, SVT and SDMS members strongly agreed with HCFA's original proposal. Both organizations believe it accurately described the reality of medical practice, and therefore, urges the agency to reconsider its position in the final rule. Moreover, the Final Rule includes a number of exceptions and exclusions to the "integral" standard. For example, x-ray, fluoroscopy, and ultrasound services that are part of invasive procedures requiring the insertion of a needle, catheter, tube, or probe have been specifically excluded from this category (i.e., cardiac catheterizations and endoscopies). Nuclear medicine has been excluded as a designated health service and certain covered preventive screening procedures, such as screening mammography, that are subject to HCFA-imposed frequency limits, also have been excluded. We believe the need for such exceptions is indicative that the standard is drawn far too narrowly, and that the "incidental" standard set forth in the proposed rule is more appropriate.

B. Resolution of the Problem

SVT and SDMS urge HCFA either to: (1) revise the "performed during a major procedure" standard in the definition of covered designated health services to more appropriately except services integral to the larger procedure, or, at a minium, (2) expand the lists of specific exclusions from the list of designated health services to include services that are not performed but in relationship to another larger procedure. As we explain below, there are a number of other procedures, such as A-scans and B-scans, that should be exempt from the self-referral prohibition based on the same rationale articulated by HCFA for excluding the procedures it believes to be integral.

V. Eliminate Ophthalmic A-Scans and B-Scans from the List of DHS

A. Summary of the Issue

Ophthalmic A-scans and B-scans should be exempt from the list of DHS. Neither A-scans nor B-scans are concurrent services, and therefore, they do not meet the "performed during" standard articulated in the Final Rule in order to be excepted from the self-referral prohibition. In practice, however, A-scans and B-scans are ultrasound procedures that are integral and vital parts of a larger procedure (cataract surgery) ordered by a physician, and thus, not subject to the potential for self-referral abuse.

An A-scan, in particular CPT 76519 (A-scan with intraocular lens power calculation), is an inseparable part of a cataract removal and intraocular lens (IOL) insertion procedure. In all but very rare cases, an IOL is inserted following removal of a cataract. An A-scan must be performed prior to the cataract surgery to measure the axial length of the eye in order to determine the appropriate power of the IOL to be implanted. A-scans are not performed to determine whether the major procedure is necessary; instead, a patient undergoes this study only after the decision for surgery has been made. There is no need to perform the A-scan unless surgery is planned, consequently, the two procedures are inextricably tied together. Arguably, if technically reasonable, the A-scan equipment could be moved into the operating room, and the study deemed part of the surgical procedure.

B-scans also should be exempt from classification as a designated health service. Like A-scans, B-scans are performed only in support of another service or procedure. For example, the B-scan procedures described by CPT codes 76512 and 76513 are used in a minority of cataract surgery cases where the denseness or opaqueness of the cataract is so great that the ophthalmic surgeon cannot use traditional examination techniques in order to view the posterior segment or retina of the eye. Just as in the case of the A-scan, and as is the case for the other tests already exempted from the DHS list by HCFA, no surgeon would perform cataract surgery to justify the improper B-scan testing. B-scans also may be performed in conjunction with an evaluation and management service where ultrasonic visualization of the posterior segment or retina of the eye is necessary to document that there is no structural pathology present.

Thus, neither A-scans nor B-scans performed in conjunction with cataract surgery should be considered a "diagnostic" radiology service, but, rather, an integral part of the cataract removal procedure. Just as HCFA concluded that erythropoetin is not a DHS because dialysis could not be provided effectively without it, an A-scan/B-scan prior to cataract surgery should not be a designated service because cataract surgery cannot be performed without the results of one or the other of these ultrasound tests. Moreover, even though B-scans may be performed in conjunction with or as part of a limited number of other services, it is irrational that (assuming A-scans are eliminated from the list of applicable DHS) the entire speciality of ophthalmology should be subject to the limitations of the Stark Law, and the costs associated with restructuring to adhere to the limitations of a particular exception over the negligible impact of B-scans.

B. Resloution of the Problem

SVT and SDMS reiterate our strong belief that the "performed during" standard for is far too narrow, and should be modified as suggested above. Failing that, however, we urge HCFA to create a separate exception for A-scan or B-scan services. There is little or no risk of over utilization of these services. A-scans are an integral part of a major procedure that the physician has ordered, and therefore the ordering of this services does not present a risk of abuse to the Medicare program. It is simply irrational to conclude that a physician would perform cataract surgery in order to receive remuneration for performing an A-scan. Similarly, the B-scan is used only in very particular instances, and therefore, overutilization is simply not a concern. These services should not be considered designated health services subject to the Stark Law.

V. Outside Referrals to a Group Practice for Ultrasound Services

A. Summary of the Issue

The Phase I Final Rule prohibits the receipt of the DHS (whether covered by private or a government payor) from being the "primary reason" a patient comes in contact with the referring physician or group practice under the in-office ancillary services exception. Specifically, HCFA states this requirement is imposed to "preclude single service DHS enterprises from the in-office ancillary services exception," and to ensure that the exception protects only those services related to the referring physician's practice. In light of this provision, we would like clarification that it is not meant to obviate protection of ultrasound services or other DHS that are not the result of a "self-referral."

We believe is the Stark Law is not implicated, nor was it meant to be implicated, when a group practice operates an ultrasound laboratory as part of its practice, and other physicians, without a financial relationship in the group or the laboratory, refer patients to the group solely for an ultrasound study (both the technical and professional components). Any interpretation other than this, would make it impossible, for example, for a primary care physician to refer a patient to a single speciality practice that provides ultrasound for purposes of obtaining a diagnostic ultrasound study in connection with his or her treatment of the patient. Consequently, we would appreciate clarification of this issue.

We thank you for this opportunity to comment on Phase I of the Stark II final regulations. Please do not hesitate to contact us or our counsel, Bill Sarraille at 202/857-6359.

Sincerely,

Suzanne Stone, Esq., Executive Director, SVT

Donald Haydon, Executive Director, SDMS