• CMS Issues Final Rule Prohibiting Physician Self-Referral
• ISU Receives Grant to Develop ‘Smart’ Prosthetic Hand

CMS Issues Final Rule Prohibiting Physician Self-Referral

CMS recently issued final regulations prohibiting physicians from referring Medicare patients for certain items, services and tests provided by businesses in which they or their immediate family members have a financial interest. This regulation is the third phase of the final regulations implementing the Stark law.

“These rules protect beneficiaries from receiving services they may not need and the Medicare program from paying potentially unnecessary costs,” said Herb Kuhn, CMS acting deputy administrator, in a press release.

This third phase of rulemaking responds to public comments on the phase II interim final rule published in March 2004 in the Federal Register. The rule does not establish any new exceptions to the self-referral prohibition, but rather makes certain refinements that could permit or, in some cases, require restructuring of some existing arrangements, CMS officials explained.

“We believe this final rule is consistent with the statute’s goals and directives, and protects our beneficiaries,” Kuhn said.

Based on public comments on the phase II rule, this final regulation includes the following actions:

• Provides enhanced flexibility in structuring non-abusive compensation arrangements. For example, the rules regarding physician recruitment and retention payments are expanded to permit recruitment of more physicians into extended areas when needed.
• Provides relief for inadvertent violations of the self-referral prohibition under certain circumstances. For example, the rules permit parties that inadvertently exceed the limit on non-monetary compensation to continue to satisfy the requirements of the exception if the excess non-monetary compensation did not exceed 50% of the permitted amount and is repaid within 180 days of its receipt or the end of the calendar year, whichever is earlier.
• Reduces the regulatory burden for compliance with certain exceptions. For example, the phase III final rule eliminates the requirement that entities providing professional courtesy provide written notice to an insurer of a reduction of any coinsurance obligation.
• Clarifies the agency’s interpretation of existing regulations. For example, the rule clarifies which provisions in office space and equipment lease agreements may be amended during the initial and subsequent terms of the agreements.

“As guardians of the Medicare program, we must be mindful of the potential impact that physician conflicts of interest can have on the Medicare program and its beneficiaries,” Kuhn said. “The rule we released strikes the proper balance between protecting patients and the program, and providing needed flexibility to health care entities to ensure the provision of quality care to our beneficiaries without unnecessarily impeding non abusive arrangements.”

ISU Receives Grant to Develop ‘Smart’ Prosthetic Hand

Engineers, a biomedical researcher and a physical and occupational therapist at Idaho State University (ISU) are collaborating to develop a “smart” prosthetic hand that will use nerve signals to fully simulate natural grasping, lifting and twisting hand motions. They hope the artificial hand will also respond to sensory and visual feedback.

The United States Army Medical Research and Material Command of the Department of Defense funded the first phase of this three-phase project, providing an $842,000 grant to ISU for the proposal titled “Smart Prosthetic Hand Technology Phase I” under the project “Combat Casualty Research Program, Telemedicine and Advanced Technology Program – Biotechnology.”

“The existing commercial technology for arm and hand amputees hasn’t changed significantly in the past six decades,” said Subbaram Naidu, PhD, ISU professor of Electrical Engineering. He is the grant’s principal investigator. “The Department of Defense is embarking on a research program to fund prosthetic research to revolutionize upper body prosthetics and to develop artificial arms that will feel, look and perform like a real human arm guided by the central nervous system. We are taking a unique approach to helping achieve these goals.”

The first phase of the project, theoretical development, is scheduled to take 18 months followed by the building and testing phases of the project. ISU researchers will use skin sensors for electromyographic signal extraction – recording the electrical activity in skeletal muscle. The scientists then will try to determine which electromyographic signals correspond to intended hand motions. Next, they will try to develop an “intelligent” control for prostheses using a variety of sophisticated computing techniques, including practices such as utilizing “neural networks, fuzzy logic, genetic algorithms and evolutionary computing.” After developing a robotic hand, the group will test its sensing and transmission systems. The researchers will test the biocompatibility of the hand and its ability to transfer signals.

“We will examine how to bypass the tissue rejection problem that has occurred when trying to attach a prosthetic device,” James Lai, PhD, in the College of Pharamacy, said. “We’ll use this study as a potential springboard to other possible research in tissue engineering and the creation of artificial organs.”