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CMS announces guidelines for specialty hospital moratorium

Compliance Monitor, March 24, 2004

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CMS announced March 19 guidelines for physician referrals to specialty hospitals under the new Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA). Under the moratorium, physicians may not refer patients to specialty hospitals in which they have an ownership or investment interest, and hospitals may not bill Medicare or any other entity for services provided as a result of a prohibited referral.

The moratorium became effective when the MMA was signed on December 8, 2003, and it will expire June 8, 2005. The rule applies to hospitals that are primarily or exclusively engaged in the care and treatment of patients with cardiac or orthopedic conditions, patients receiving surgical procedures, and patients receiving any other specialized type of services that CMS may designate.

Some types of hospitals are not subject to the moratorium, including psychiatric hospitals, rehabilitation hospitals, children's hospitals, long-term care hospitals, and cancer hospitals that are not paid under the inpatient hospital prospective payment system.

The MMA also excludes from the rule hospitals that were in operation before or under development as of November 18, 2003.

To read the full CMS release, click here .

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