Changes in Patients’ Right to Freedom of Choice

December 8th, 2020
freedom of choice: home health, hospice, physical therapy

Special Guest Author: Elizabeth E. Hogue, Esq.

Recent changes to the federal anti-kickback and Stark requirements include a special rule for directing patient referrals, but limits apply! Under a new special rule for directed referrals, providers are permitted to require physicians who are bona fide employees, independent contractors, or parties to managed care contracts to refer patients to specific providers, practitioners, or suppliers.

However . . .

These compensation arrangements must meet specified conditions designed to:

  • Preserve patient choice
  • Comply with insurers’ determinations
  • Protect physicians’ professional medical judgement

These requirements were added to the following exceptions:

  • Academic medical centers
  • Bona fide employment relationships
  • Personal service arrangements
  • Physician incentive plans
  • Group practice arrangements with hospitals
  • Fair market value compensation
  • Indirect compensation arrangements

In addition, the Centers for Medicare & Medicaid Services (CMS) added a condition to the special rule that is also intended to protect patients’ rights. Specifically, the rule says that the existence of compensation arrangements and the amount of compensation paid may not be based on the volume or value of referrals to particular providers, practitioners, or suppliers.

CMS seems determined to protect patients’ right to freedom of choice. Providers have certainly “cried foul” over directed referrals in the past and will continue to do so. But recent lawsuits also make it clear that physicians may also be a significant source of opposition to these arrangements and may not hesitate to challenge them. Stay tuned to see how these latest developments regarding patient choice will play out!


©2020 Elizabeth E. Hogue, Esq. All rights reserved. No portion of this material may be reproduced in any form without the advance written permission of the author.