2020 list of Designated Service Codes Subject to Stark Law

Date: January 19, 2020

In a December, 2019, release, CMS published the codes subject to restrictions on Physician Self-Referral (aka, the Stark Law) for Designated Health Services (DHS) in CY 2020.  While the existence of a code list and DHS regulations are not new, it’s important to be aware of this and to check this list of codes each year to remain compliant.  There are multiple examples of providers running afoul of the Stark Law regulations and paying very large fines.

“Self-Referral” is prohibited unless an exception is in play.  The main regulatory issue with these DHS codes is that ophthalmologists and optometrists who are paid (base and/or bonus) on a productivity basis must exclude certain amounts from items that appear on the DHS list.  This applies to the technical component of certain diagnostic tests that are not “personally performed” by the physician.  In addition, lab tests are also affected even though they do not have a TC/26 split and the entire allowed amount is subject to Stark DHS if it appears on the list.  The most common lab tests that eye doctors do in their offices are for dry eye.

Practices should take the lab codes on the list and the amounts for the technical component (TC) of a code appearing on the list out of any productivity bonus calculations for providers.  Importantly, all 3 common OCT and most of our eye radiology codes (eg, A-scan and B-scan) appear on the list.  Most practices take the revenue from the lab codes and TC amounts under DHS provisions and put it into a general “operations” fund or another area that is not otherwise “productivity-bonused” in order to remain compliant.

CMS has noted the following on the DHS webpage:

Section 1877 of the Social Security Act (42 U.S.C. 1395nn) prohibits physicians from referring Medicare patients for certain designated health services (DHS) to an entity with which the physician or a member of the physician’s immediate family has a financial relationship unless an exception applies. It also prohibits an entity from presenting or causing to be presented a bill or claim to anyone for DHS furnished as a result of a prohibited referral …

The Department of Justice has a good webpage on Physician Self-Referral as well.

We are happy to assist you with general claims issues and other topics, which include: proper code selection, chart reviews and payer questions. Our new Practice Improvement Partnership (PIP) can assist with operations, practice optimization, and efficiency.  We provide training on all these subjects. You can download our “App”, Corcoran 24/7 via one of the links below.

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