Last week, CMS made available a redacted advisory opinion regarding the Medicare Modernization Act's ("MMA's") 18-month moratorium on physician referrals to specialty hospitals in which the physician (or his immediate family member) has an ownership or investment interest. The opinion focuses on the Stark law which prohibits such physician referrals unless an exception applies. CMS acknowledged that the provider in question may qualify for one of these exceptions known as the "whole hospital" exception. A physician satisfies this exception if: (1) he or she is authorized to perform services at the hospital; (2) his or her ownership or investment interest is in the entire hospital and not a subdivision of the hospital; and (3) the hospital is not a specialty hospital for the 18 month period beginning on December 8, 2003 and ending on June 8, 2005, as per the MMA. The MMA defines a "specialty hospital," in part, as one that is primarily or exclusively engaged in the care and treatment of patients with cardiac or orthopedic conditions, or patients that are receiving surgical procedures. However, "specialty hospital" does not include hospitals "under development" as of November 18, 2003. CMS agreed with the provider that its hospital was indeed under development as of November 18, 2003 because certain events had occurred as of that date, including completion of architectural plans, receiving necessary funding, satisfying zoning requirements, and receiving approvals from appropriate state agencies. Accordingly, CMS concluded that the specialty hospital moratorium did not apply to the provider in this case. The complete advisory opinion is available on the CMS website at http://www.cms.hhs.gov/medlearn/ao-sh-2004-06-01.pdf.
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