The U.S. Department of Health and Human Services (“HHS”) will be heading back to District Court—and likely the drawing board altogether—to grapple with a recent federal court holding that the Medicare equipment lease rule is probably illegal.
The final rule, issued in 2008, effectively prohibits physicians who lease medical equipment to hospitals from referring their Medicare patients to these same hospitals for outpatient care involving that equipment. It is designed to prevent doctors from profiting from self-referrals.
Under the rule, a physician may lease medical equipment to a hospital and may refer patients to that hospital for tests using that equipment, but the physician must then accept payment for the equipment lease on a monthly or yearly basis, instead of on a “per click” or “per use” basis.
The Council of Urological Interests—a not-for-profit association of physicians who participate...
