1. Structuring. Mr. Schirg says it's
important to understand, first and foremost, what the
hospital's goals and needs are with respect to patient care and
outcomes, reimbursement and physician involvement. These elements
determine the type of structure a radiation oncology center or
department could take: a freestanding center or a hospital-based
facility. All rules within the Centers for Medicare and Medicaid
Services, such as the Medicare program's reimbursement as well
as provider-based and physician self-referral regulations, need to
be thoroughly combed, he adds. The center or department must
satisfy all applicable legal requirements.
2. Compensation/reimbursement. All radiation oncology
centers and hospital departments must comply with the applicable
federal and state fraud and abuse statutes. As a result, any
compensatory agreements between a physician and the hospital or
center need to be at fair market value and should be vetted and
reviewed legally. In many cases, a fair market value appraisal or
analysis will need to be done to ensure that an oncology department
or center is not paying above market rates for the services it is
obtaining from physicians, Mr. Hill says. In terms of
reimbursement, the hospital needs to understand the impact that the
structure of the radiation oncology center will have on its
reimbursement. For example, some services are only reimbursed when
they are provided in a hospital setting, and hospital-based
radiation oncology centers are paid at higher rates than
non-hospital based facilities for some procedures. Mr. Schirg says
the government and other third-party payors realize hospitals
typically treat sicker patients and have greater overhead costs, so
there's usually a bump in their reimbursements.
3. Stark Law. Establishing or expanding a
radiation oncology department or center requires full knowledge and
awareness of the Stark Law. Under the Stark Law, radiation
oncologists are generally the only type of physicians who are
permitted to have ownership in a radiation oncology center. As a
result, medical oncologists, neurosurgeons and general surgeons
cannot participate as equity owners. However, Mr. Schirg adds that
while radiation oncologists are treated differently under the Stark
Law, the hospital or center must still take every precaution to
ensure that the radiation oncologists' ownership interests and
referral practices are within the confines of the law.
"Overall we're seeing a heightened sense of
scrutiny," Mr. Hill says. "It doesn't mean you
can't do it. It just means you have to be more on the
up-and-up."
4. Certificate of Need. Depending on the state, a
prospective radiation oncology center or department might require a
certificate of need. Generally, the need for a CON is typically
based on two items:
- The establishment or initiation of the provision of radiation therapy services, or
- The cost of the equipment and/or facility that will be needed to provide the services.
If equipment costs a lot or if the entity itself will cost more
than expected, a prospective oncology department or center might
need to obtain a CON, Mr. Schrig says, when it otherwise would
not.
5. Utilization. Before even setting up a radiation
oncology department or center, the likely utilization must be
known, Mr. Schrig says. The expected utilization or volume is
needed to determine whether the facility will cover its operating
costs and, most importantly, whether it will be able to develop the
proficiency, experience and skill needed to provide quality
services to its patients. If there are several other cancer centers
in a city, an entity should analyze whether it could be financially
viable and provide the desired quality of care before actually
sinking money into a joint venture or freestanding radiation
oncology center.
6. Physician/oncologist reputation. The volume of
a cancer center or department directly correlates to the reputation
of the physicians and radiation oncologists who treat the cancer
patients, Mr. Hill says. With so much information available on the
Internet, finding the right physicians will bolster the quality,
reputation and sustainability of the facility. "Cancer
patients are generally smart consumers," Mr. Hill says.
"Cancer is a disease that is treated for a long period of
time, and they are drawn to physicians that are leaders in the
field."
7. Accreditation and licensure. Mr. Schirg says
working with licensing and accreditation bodies about the
expectations for the facility is essential. The licensure and
accreditation requirements for freestanding radiation therapy
centers and off-campus, hospital-based radiation oncology
departments is not always clear, so a hospital or facility may need
to jump through some additional hoops in order to make its vision a
reality, he says.
8. Requisite supervision. Mr. Schirg says this is a
commonly overlooked step, but all radiation oncology centers must
ensure they meet the physician supervision requirements for the
procedures they perform. This is typically a bigger issue for
freestanding or off-campus, hospital-based radiation oncology
centers. Mr. Hill adds that these locations generally must have a
physician present during regular business hours, so the
administration must figure out how to have some staff there.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.