The original proposed physician "Stand in Shoes" regulations provide that any physician would stand in the shoes of any other doctor in the following circumstances:

1.      Another physician who employs the referring physician;

2.      His or her wholly owned professional corporation;

3.      A physician’s medical practice that employs or contracts with the referring physician or in which the physician has an ownership interest; or

4.      A group practice of which the referring physician is a member or independent contractor.

Following these proposals, institutional providers, i.e. academic medical centers, integrated delivery systems, etc., were concerned that support payments to a physician organization, which previously might have satisfied the indirect compensation arrangement exceptions, would no longer be available because the support payments are typically not expressly linked or tied to fair market value for identifiable services. Because of this concern, CMS announced a 12 month delay on November 15, 2007.

CMS has stated that it believes the institutional concerns are justifiable, but they also do not wish to suggest that support payments are totally without risk. Therefore, they are proposing two alternatives for the former "Stand in Shoes" regulations. First will be a multifaceted approach to the "Stand in Shoes" regulations to provide specific guidance, and second will be a universal exception for non-abusive relationships. 

The first proposal would amend the "Stand in Shoes" regulations to provide that a physician does not stand in the shoes of a physician or entity that already meets an existing exception, i.e. bona fide employment, personal service arrangement, or fair market value compensation. The second component of that new exception would be to protect academic medical center payments that meet the graduate medical education requirements.

The second proposal is conceptual only; there are no specific proposals at this point. That global exception would be to protect mission support payments to physician components of integrated delivery systems. CMS is seeking comments on this concept because of the wide and non-specific scope of the term "integrated delivery system". CMS would like to define a sufficient degree of integration so that this exception will not simply be the universal escape hatch.

Coupled with the refinement of the physician "Stand in Shoes" regulations, CMS would like to clarify the entity "Stand in Shoes" regulations, so that Section 411.354(a) would be revised to provide that an entity that furnishes DHS would be deemed to stand in the shoes of an organization in which it has 100% ownership interest and would be deemed to have the same compensation arrangements with the same parties and on the same terms as does the organization that it owns. 

The text of the CMS proposal can be accessed through the 04/17/08 post or in the Healthcare Links section of the MedLaw Blog.