Medicare and Medicaid Programs; Physicians' Referrals to Health Care Entities With Which They Have Financial Relationships: Extension of Partial Delay of Effective Date

This final rule further delays for 6 months, until January 7, 2004, the effective date of the last sentence of 42 CFR 411.354(d)(1). This section was promulgated in the final rule entitled "Medicare and Medicaid Programs; Physicians' Referrals to Health Care Entities With Which They Have Financial Relationships," published in the Federal Register on January 4, 2001. A 1-year delay of the effective date of the last sentence in this section was published in the Federal Register on December 3, 2001. An additional 6-month delay, until July 7, 2003, was published on November 22, 2002. This further extension of the delay in the effective date of that sentence will give us additional time to reconsider the definition of compensation that is "set in advance" as it relates to percentage compensation methodologies in order to avoid unnecessarily disrupting existing contractual arrangements for physician services. Accordingly, the last sentence of Sec. 411.354(d)(1), which would have become effective July 7, 2003, will not become effective until January 7, 2004. We expect that the definition of "set in advance" will be addressed definitively before January 7, 2004 in a final rule with comment period, entitled "Medicare Program; Physicians' Referrals to Health Care Entities With Which They Have Financial Relationships" (Phase II).