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ALS SUCCESSFUL IN LEGAL CHALLENGE OF CMS STARK II REGULATIONS

ALS Member Update: July 16, 2002

The American Lithotripsy Society (ALS) and the Urology Society of America (USA) today announced their successful challenge of CMS' Final Rule holding lithotripsy, when performed under arrangement with a hospital, to be a "designated health service" and thus covered under the Stark II ban on physician referrals. The United States District Court for the District of Columbia, the Honorable Henry H. Kennedy, Jr., granted the ALS/USA Motion for Summary Judgment, and denied the similar motion of the Centers for Medicare and Medicaid Services, in a 25-page decision dated July 16, 2002.

In a final rule dated January 4, 2001, with an effective date of January 4, 2002, CMS found lithotripsy to be subject to the Stark II ban because Medicare will only pay for lithotripsy when provided "under arrangement" with a hospital. Thus, concluded CMS, any service provided under arrangement, specifically including lithotripsy, was a hospital inpatient and outpatient service and subject to the Stark II ban on physician referrals to any entity in which the physician had a financial interest.

The Federal Court agreed with ALS/USA and held that lithotripsy services provided by physician-owned facilities were not intended by Congress to be encompassed within the term "hospital inpatient and outpatient services". Therefore, lithotripsy is not intended to be a "designated health service" subject to the Stark II ban. In so holding, the Federal Court also disagreed with CMS' position that the District Court had no jurisdiction under the Supreme Court's recent Shalala v. Illinois Council on Long Term Care, Inc. decision. CMS argued that Illinois Council required all challenges to the Stark II regulations to be brought through the lengthy four-level administrative process at CMS before a challenge could be brought in Federal District Court.

The Court's decision in ALS and USA v. Thompson is believed to be the first and only successful challenge of CMS' final Stark regulations. This is the second successful Federal Court challenge of Medicare rules adversely affecting lithotripsy providers: the first was American Lithotripsy Society v. Sullivan, decided in 1991, overturned then-HCFA's proposed ambulatory surgery center rate."

CLICK HERE to obtain the full text of Judge Kennedy's ruling. For additional information, contact Wesley E. Harrington, CAE, ALS' Executive Director, at the Society's headquarters in Waltham, Massachusetts.

American Lithotripsy Society
305 Second Avenue – Suite 200
Waltham, Massachusetts 02451
Telephone: 781-895-9098
Fax: 781-895-9088

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While the ALS will continue to monitor this critical issue and pursue clarification of Stark regulations through its lawsuit against the government, WE DESPERATELY NEED YOUR FINANCIAL SUPPORT NOW to be certain that your interests are protected. Scarce resources are available to take on this important issue.

Everyone in the lithotripsy industry, individuals and sites, owe their current success to ALS's efforts to support them in the past. Yet the ALS's ability to impact the future can only happen if contributions are made to the Society's Lithotripsy Education and Awareness Fund [LEAF] today! For those who have contributed to LEAF in the past, ALS says "Thank you for recognizing the importance of your support, but please keep giving." For those who have not given, we can only ask "Why?" and suggest that unless your support is forthcoming, your future financial prospects will be dismal and deserved. Whether it is $1000 from every Urologist who has made money from a lithotripsy venture or $50,000 from every site or something in between, now is the time to step forward to support your Society in its efforts on your behalf!

Please send your contributions to:

AMERICAN LITHOTRIPSY SOCIETY
C/0 Wesley E. Harrington, CAE
Executive Director
305 Second Avenue, Suite 200
Waltham, Massachusetts 02451
Telephone: 781-895-9098
Fax: 781-895-9088

[Please make your checks payable to "ALS-LEAF" or
"ALS Lithotripsy Education and Awareness Fund"
.]


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Visit us again to receive up-to-the-minute reports on major issues such as the Health Care Finance Administration's (HCFA) proposed implementation of the Stark II (Physician Ownership) regulations and HCFA's proposed rates for lithotripsy performed in/out patient and ambulatory surgical center settings.

For additional information contact, Wesley E. Harrington, CAE, Executive Director of ALS at:
American Lithotripsy Society, 305 Second Avenue, Suite 200
Waltham, Massachusetts 02451
Telephone: (781) 895-9098
Fax: (781) 895-9088

E-mail: als@lithotripsy.org


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American Lithotripsy Society
305 Second Avenue, Suite 200
Waltham, Massachusetts 02451
Telephone: (781) 895-9098
Fax: (781) 895-9088
email:
als@lithotripsy.org


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