Rules to Curb Doctors’ Abuse of Medicare Due

The government said Thursday it will issue regulations on what business arrangements are acceptable for doctors referring Medicare and Medicaid patients to other facilities.

Kickbacks and self-dealing abuses are part of the reason for soaring medical costs, the Department of Health and Human Services has said. It says many current arrangements result in overuse of medical services, a decrease in competition and restrictions in patients’ freedom of choice.

The new rules are to be published in Monday’s Federal Register. A key provision allows doctors to engage in joint ventures with such enterprises as laboratories if 60% of the capital and revenue of the venture came from sources that did not refer business to it.

To be acceptable, the financial return to the physician would have to be proportional to investment, and not related to referrals. The physician would have to be free of any obligation to refer business to the venture.

At least 25% of independent clinical and physiological laboratories are owned in whole or in part by referring physicians.