CMS has specific guidelines on how to meet the in-office ancillary exception if group practices have a formal arrangement to share office space.
Q: We are confused about the restrictions on referrals for ancillary services that fall within the Designated Health Services list-in particular, the "stand in shoes" provision of the Phase III legislation. We are a group practice, and we share space and equipment with another group practice. We have contractual obligations to each other for payment of the rent, utilities, equipment, etc., and each group employs its own staff. In the preamble to Phase III, it looks as if we don't fit into any definition of group practice or physician organization. Does this mean we no longer meet the definition for the in-office ancillary services exception?
A: The Centers for Medicare & Medicaid Services clarified this issue on its website earlier this year. If you are a group practice and have formal arrangements to share space and equipment, you meet the in-office ancillary exception, as long as the service is furnished personally by the referring physician or a physician who is a member of the same group practice as the referring physician, or if the service is supervised by the referring physician or another physician in the same group practice. As long as those conditions are met, you may bill for your ancillary services.
The safe harbor would be eliminated if a doctor in the group you share space with, and who is not a member of your group practice (ie, same tax ID), supervised one of your staff members, who rendered the service. Then it would fall outside of the in-office ancillary services exception, and it would be inappropriate to bill for the service.
The author, vice president of operations for Reed Medical Systems in Monroe, Michigan, has more than 30 years of experience as a practice management consultant and is also a certified coding specialist, certified compliance officer, and a certified medical assistant.