Phase III of CMS' Physician Self-referral Rule to Go into Effect December 4, 2007

September 21, 2007


The Phase III final rule is the third phase of a final rulemaking amending the CMS regulations regarding the physician self-referral prohibition as part of the Social Security Act. This rule finalizes and addresses public comments regarding the Phase II interim final rule, published in March 2004.

CMS says that it added no new exceptions to the prohibition on self referrals, but rather refined certain areas of the regulation. CMS encourages providers to consult all three phases to get a full understanding of the physician self-referral prohibition and the exceptions to the prohibition. CMS is allowing a grace period for providers to restructure arrangements that no longer meet the requirements.

Some neurologists that are providing physical therapy services may be affected by portions of the rule stating that physicians can receive direct credit or compensation for "incident to" therapy services, but not for therapy services billed under the therapist's provider number. View the final rule for more information on all of the changes.

The final rule goes into effect December 4, 2007. For more information, visit the self-referral page on the CMS website.