The health reform law (PPACA) requires referring physicians who provide in-office MRI, CT or PET services to inform a patient in writing at the time of the referral that the patient may obtain the service from an alternative source and provide a list of suppliers who furnish the service in the area in which the patient resides. In the 2011 Medicare Fee Schedule, CMS has clarified what a physician must do to meet this requirement, which will begin on January 1, 2011. Some highlights: 

• The rule will only apply to MRI, CT and PET services. Some commenters wanted it to apply to all imaging or all designated health services, but CMS declined to expand it.

• The notice should be written in a manner sufficient to be reasonably understood by all patients and be given to the patient at the time of the referral.

• The list must include 5 alternative suppliers (reduced from 10 in the proposed rule). These alternative sources must be within a 25-mile radius of the physician’s office location at the time of the referral. Any reasonable method for measuring distance will be acceptable.

• The information about these suppliers must include name, address, and phone number, but there is no need to include the distance from the referring physician’s office;

• As long as the requisite number of "suppliers"  (as technically defined in the Medicare law) are included in the alternate list, the physician may also list "providers", (i.e. hospitals), on the notice, but is not required to do so — CMS concluded that Congress did not authorize them to broaden the list of substitute sources to include hospitals;

• CMS removed the proposed requirement that the physician obtain the patient’s signature on the notice and retain a copy of the disclosure in the patient’s medical record.
• CMS declined to prescribe standard disclosure language. 
• The disclosure requirement does not apply to any service that is integral to the performance of a nonradiological medical procedure and is performed either during the nonradiological procedure or immediately after the procedure to confirm placement of an item.
• A physician may include a statement that the list is not intended as an endorsement or recommendation of those suppliers.
• If there are fewer than 5 other suppliers located within a 25-mile radius of the physician’s office location at the time of the referral, the physician must list all of the other suppliers of the imaging service that are present within a 25-mile radius of the referring physician’s office location. Provision of the written list of alternate suppliers will not be required if no other suppliers provide the services for which the individual is being referred within the 25-mile radius.  

Note that Pennsylvania’s Act 66 already includes a similar disclosure requirement, although it does not require a list of alternative sources. Act 66 states:

Any practitioner of the healing arts shall, prior to referral of a patient to any facility or entity engaged in providing health-related services, tests, pharmaceuticals, appliances or devices, disclose to the patient any financial interest of the practitioner or ownership by the practitioner in the facility or entity. In making any referral, the practitioner of the healing arts may render any recommendations he considers appropriate, but shall advise the patient of his freedom of choice in the selection of a facility or entity.