77492 Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations DEPARTMENT OF HEALTH AND payable by Medicare to an entity with revisions to the physician self-referral HUMAN SERVICES which he or she (or an immediate family regulations, including: (1) Revisions to member) has a financial relationship, the ‘‘stand in the shoes’’ provisions; (2) Centers for Medicare & Medicaid unless an exception applies; and (2) establishment of provisions regarding Services prohibits the entity from filing claims the period of disallowance and with Medicare (or billing another temporary noncompliance with 42 CFR Part 411 individual, entity, or third party payor) signature requirements; (3) prohibitions [CMS–1720–F] for those referred services. A financial on per unit of service (‘‘per-click’’) and relationship is an ownership or percentage-based compensation RIN 0938–AT64 investment interest in the entity or a formulas for determining the rental compensation arrangement with the charges for office space and equipment Medicare Program; Modernizing and entity. The statute establishes a number lease arrangements; and (4) expansion of Clarifying the Physician Self-Referral of specific exceptions and grants the the definition of ‘‘entity.’’ Regulations Secretary of the Department of Health After passage of the Patient Protection AGENCY: Centers for Medicare & and Human Services (the Secretary) the and Affordable Care Act of 2010 (Pub. Medicaid Services (CMS), HHS. authority to create regulatory exceptions L. 111–148) (Affordable Care Act), we for financial relationships that do not issued final regulations on November ACTION: Final rule. pose a risk of program or patient abuse. 29, 2010 in the Calendar Year (CY) 2011 SUMMARY: This final rule addresses any Section 1903(s) of the Act extends Physician Fee Schedule (PFS) final rule undue regulatory impact and burden of aspects of the physician self-referral with comment period that codified a the physician self-referral law. This prohibitions to Medicaid. For additional disclosure requirement established by final rule is being issued in conjunction information about section 1903(s) of the the Affordable Care Act for the in-office with the Centers for Medicare & Act, see 66 FR 857 through 858. ancillary services exception (75 FR Medicaid Services’ (CMS) Patients over This rulemaking follows a history of 73443). We also issued final regulations Paperwork initiative and the rulemakings related to the physician on November 24, 2010 in the CY 2011 Department of Health and Human self-referral law. The following Outpatient Prospective Payment System Services’ (the Department or HHS) discussion provides a chronology of our (OPPS) final rule with comment period Regulatory Sprint to Coordinated Care. more significant and comprehensive (75 FR 71800), on November 30, 2011 in This final rule establishes exceptions to rulemakings; it is not an exhaustive list the CY 2012 OPPS final rule with the physician self-referral law for of all rulemakings related to the comment period (76 FR 74122), and on certain value-based compensation physician self-referral law. After the November 10, 2014 in the CY 2015 arrangements between or among passage of section 1877 of the Act, we OPPS final rule with comment period physicians, providers, and suppliers. It proposed rulemakings in 1992 (related (79 FR 66987) that established or revised certain regulatory provisions also establishes a new exception for only to referrals for clinical laboratory services) (57 FR 8588) (the 1992 concerning physician-owned hospitals certain arrangements under which a proposed rule) and 1998 (addressing to codify and interpret the Affordable physician receives limited remuneration referrals for all designated health Care Act’s revisions to section 1877 of for items or services actually provided services) (63 FR 1659) (the 1998 the Act. On November 16, 2015, in the by the physician; establishes a new proposed rule). We finalized the CY 2016 PFS final rule, we issued exception for donations of cybersecurity proposals from the 1992 proposed rule regulations to reduce burden and technology and related services; and in 1995 (60 FR 41914) (the 1995 final facilitate compliance (80 FR 71300 amends the existing exception for rule), and issued final rules following through 71341). In that rulemaking, we electronic health records (EHR) items the 1998 proposed rule in three stages. established two new exceptions, and services. This final rule also The first final rulemaking (Phase I) was clarified certain provisions of the provides critically necessary guidance published in the Federal Register on physician self-referral regulations, for physicians and health care providers January 4, 2001 as a final rule with updated regulations to reflect changes in and suppliers whose financial comment period (66 FR 856). The terminology, and revised definitions relationships are governed by the second final rulemaking (Phase II) was related to physician-owned hospitals. physician self-referral statute and published in the Federal Register on On November 15, 2016, we included in regulations. March 26, 2004 as an interim final rule the CY 2017 PFS final rule, at DATES: These regulations are effective with comment period (69 FR 16054). § 411.357(a)(5)(ii)(B), (b)(4)(ii)(B), on January 19, 2021, except for Due to a printing error, a portion of the (l)(3)(ii), and (p)(1)(ii)(B), requirements amendment number 3, which further Phase II preamble was omitted from the identical to regulations that have been amends section 411.352(i), which is March 26, 2004 Federal Register in effect since October 1, 2009 that the effective January 1, 2022. publication. That portion of the rental charges for the lease of office FOR FURTHER INFORMATION CONTACT: preamble, which addressed reporting space or equipment are not determined Lisa O. Wilson, (410) 786–8852. requirements and sanctions, was using a formula based on per-unit of Matthew Edgar, (410) 786–0698. published on April 6, 2004 (69 FR service rental charges, to the extent that Catherine Martin, (410) 786–8382. 17933). The third final rulemaking such charges reflect services provided to (Phase III) was published in the Federal patients referred by the lessor to the SUPPLEMENTARY INFORMATION: Register on September 5, 2007 as a final lessee (81 FR 80533 through 80534). I. Background rule (72 FR 51012). On November 23, 2018, in our most In addition to Phase I, Phase II, and recent substantive update, the CY 2019 A. Statutory and Regulatory History Phase III, we issued final regulations on PFS final rule (83 FR 59715 through Section 1877 of the Social Security August 19, 2008 in the Fiscal Year (FY) 59717), we incorporated into our Act (the Act), also known as the 2009 Inpatient Prospective Payment regulations provisions at sections physician self-referral law: (1) Prohibits System final rule with comment period 1877(h)(1)(D) and (E) of the Act that a physician from making referrals for (73 FR 48434) (the FY 2009 IPPS final were added by section 50404 of the certain designated health services rule). That rulemaking made various Bipartisan Budget Act of 2018 (Pub. L. VerDate Sep<11>2014 18:07 Dec 01, 2020 Jkt 253001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\02DER2.SGM 02DER2 Federal Register / Vol. 85, No. 232 / Wednesday, December 2, 2020 / Rules and Regulations 77493 115–123). Specifically, we codified in • A patient’s ability to understand As described in this final rule, the regulations our longstanding policy that treatment plans and make empowered physician self-referral statute was the writing requirement in various decisions; enacted to address concerns that arose compensation arrangement exceptions • Providers’ alignment on an end-to- in Medicare’s volume-based in § 411.357 may be satisfied by a end treatment approach (that is, reimbursement system where the more collection of documents, including coordination among providers along the designated health services that a contemporaneous documents patient’s full care journey); physician ordered, the more payments evidencing the course of conduct • Incentives for providers to Medicare would make to the entity that between the parties. We also amended coordinate, collaborate, and provide furnished the designated health the special rule for temporary patients with tools to be more involved; services. If the referring physician had noncompliance with signature and an ownership or investment interest in • requirements at § 411.353(g), removing Information-sharing among the entity furnishing the designated the limitation on the use of the rule to providers, facilities, and other health services, he or she could increase once every 3 years with respect to the stakeholders in a manner that facilitates the entity’s revenue by referring patients same physician and making other efficient care while preserving and for more or higher value services, changes to conform the regulatory protecting patient access to data. potentially increasing the profit provision to section 1877(h)(1)(E) of the The Department believes that the distributions tied to the physician’s Act. realization of these goals would ownership interest. Similarly, a meaningfully improve the quality of physician who had a service or other B. Health Care Delivery and Payment care received by all American patients. compensation arrangement with an Reform: Transition to Value-Based Care As part of the Regulatory Sprint, CMS, entity might increase his or her the HHS Office of Inspector General aggregate