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Intra-family rural referrals exception

Exception for intra-family referrals in rural areas

42 CFR 411.355(j) provides a narrow exception that allows providers to furnish services pursuant to a referral from a physician to an immediate family member.  The provision was adopted after commentators noted that many rural areas will have only a limited number of physicians to whom referrals for services may be made, and further, that often the physicians are immediate family members of each other (e.g., spouses, siblings, parent/child). Therefore, in the absence of a specific exception, the Stark law would prohibit the referrals from one physician to another; it would bar the billing for designated health services as a result of such referrals.

The final rule makes a narrow exception for services provided pursuant to a referral from a referring physician to his or her immediate family member, or to an entity furnishing DHS with which the immediate family member has a financial relationship. To meet the requirements of this exception, all of the following conditions must met:
  • The patient who is referred must reside in a “rural area” as defined in Sec. 411.351;
  • Except as provided in the following sentence, no other person or entity is available to furnish the services in a timely manner in light of the patient's condition within 25 miles of the patient's residence or 45 minutes transportation time from the patient’s residence. This provision does not apply, however, to services furnished to patients where they reside (for example, home health services or in-home DME), when no other person or entity is available to furnish the services in a timely manner in light of the patient's condition;
  • The financial relationship does not violate the antikickback statute, or any federal or state law or regulation governing billing or claims submission; and
  • The referring physician or the immediate family member must make reasonable inquiries as to the availability of other persons or entities to furnish the DHS. However, neither the referring physician nor the immediate family member has any obligation to inquire about the availability of persons or entities located farther than 25 miles or 45 minutes transportation time from the patient's residence.
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