The Centers for Medicare and Medicaid Services (CMS) announced Friday that it had issued a clarification of its "moratorium on physician investment in and referrals to certain specialty hospitals. Under the moratorium, a physician may not refer a patient to a specialty hospital in which he has an ownership or investment interest, and the hospital may not bill Medicare or any other entity for services provided as a result of a prohibited referral." The moratorium was required by last fall's Medicare reform act, "Medicare Prescription Drug, Improvement and Modernization Act of 2003" (MMA). (The moratorium provision begins on p. 230, sec. 507.)
For most transactional lawyers, the guidance probably comes a little too late to do their clients any real good, since the race was on last fall to get specialty hospitals "grandfathered" before the moratorium took effect on November 18, 2003. According to the press release, "The MMA also excludes from the moratorium (or grandfathers), hospitals that were in operation before or under development as of November 18, 2003. In determining whether a hospital was under development as of that date, the law instructs CMS to consider whether architectural plans were completed, funding was received, zoning requirements were met, and necessary approvals from appropriate State agencies were received. CMS can also consider additional evidence that would indicate whether a specialty hospital was under development."
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