Senate Finance Committee Targets Physician-Owned Imaging and Physical Therapy

Section 1877 of the Social Security Act (42 U.S.C. 1395nn), commonly known as the Stark Law, governs physician self-referral for Medicare and Medicaid beneficiaries and generally bans a physician from referring a patient to receive designated health services, such as imaging, clinical laboratory services, and physical therapy, among others, from an entity in which the physician (or the physician’s immediate family member) has a financial interest, unless an exception applies. One such exception, the In-Office Ancillary Services (IOAS) exception, permits physicians and group practices to provide designated health services in the physician’s own office or the group practice location, as long as certain requirements related to supervision, location, and billing are met. The exception permits physicians to self-refer ancillary services such as diagnostic imaging and physical therapy.

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