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Payment Matters
November 5, 2007
SPECIAL ALERT: Far Reaching Implications for Physician Diagnostic Testing Arrangements Under the 2008 Physician Fee Schedule Rule
By: Julie E. Kass
The recently published anti-markup provisions in the 2008 CMS Physician Fee Schedule Final Rule (Final Rule) will have far-reaching implications and the potential to produce major changes in the ways physicians provide diagnostic tests. On November 1, 2007, the Final Rule was displayed at the Federal Register and can be downloaded from the CMS website (www.cms.hhs.gov). Although the Final Rule does not finalize most of the proposed changes relating to the Stark regulations, CMS did finalize the anti-markup provisions. While the provisions of the anti-markup rule itself are fairly straight-forward, the effect that these provisions will have on the ways in which physician practices provide diagnostic tests cannot be overstated.
CMS originally proposed changes to the reassignment and anti-markup rules in the 2007 proposed physician fee schedule rule, but did not finalize them that year. Instead, based on comments CMS received on the 2007 proposed rule, this year CMS proposed the imposition of an anti-markup limitation to the technical (TC) and professional (PC) of diagnostic tests. CMS' stated reasons for imposing such restrictions include the concern that certain arrangements that on their face meet the in-office ancillary services exception to the Stark prohibitions are not within what CMS views as the intended purpose of that exception. Specifically, CMS was troubled with services provided in "centralized buildings" and those where physician practices purchased or contracted for the provision of diagnostic tests. The basis for this concern appears to be the potential for a physician to realize a profit on those tests, which might then lead to overutilization resulting in higher costs to the Medicare program.
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