On December 28, 2007, the Centers for Medicare and Medicaid Services (CMS) displayed a final rule announcing that it was delaying the effective date of the majority of the newly revised anti-markup rule until January 1, 2009. CMS’ announcement came just a few days before the newly revised rule was set to take effect on January 1, 2008. There are two provisions of the anti-markup rule that were not delayed: (1) the technical component of purchased tests; and (2) anatomic pathology diagnostic testing services furnished in certain spaces.
As part of the 2008 Medicare Physician Fee Schedule, CMS issued significant changes to the anti-markup rule. The revised anti-markup rule prohibits a mark-up on both the technical component (TC) and professional component (PC) of diagnostic tests ordered by a billing physician or other supplier (or related party) if: (1) the TC or PC is outright purchased or (2) if the TC or PC is performed at a site other than “the office of the billing physician or other supplier”.
The one year delay applies to the revised anti-markup rule, except for the following two exceptions:
The TC of Purchased Tests. CMS did not delay the applicability of the expanded anti-markup rule with respect to the technical component of any purchased diagnostic test, as this has been the longstanding rule and was merely incorporated into the revised anti-markup provisions.
Certain Anatomic Pathology Diagnostic Testing Arrangements. CMS states that because anatomic pathology diagnostic testing arrangements precipitated its proposal to expand the anti-markup rule and remain the core concern, it would not delay the effective date for these services furnished in space that: (1) is utilized by a physician group practice as a “centralized building” (as defined by Stark) for purposes of complying with the physician self-referral rules; and (2) does not qualify as a “same building” (as defined by Stark). These pathology arrangements are subject to the expanded anti-markup rule effective January 1, 2008.
Soon after the new anti-markup rule was published in 2007, industry stakeholders raised concerns that the new rule was unclear and would reduce the amount of diagnostic tests that could be provided to patients. In response, CMS decided to study the issues further and issued the one-year delay. CMS states that during the next twelve months it plans to issue clarifying guidance as to what constitutes “the office of the billing physician or other supplier” or propose additional rulemaking, or both. CMS admits that the current definition may not be clear and could have unintended consequences.
Conclusion
Although CMS appears to have issued the delay in implementation of the revised anti-markup rule in an effort to avoid confusion and provide further clarity, there still remain many unanswered questions. For example, what qualifies as the “office of the billing physician or other supplier”, how is “anatomical pathology” defined, and what is the definition of a “purchased test”? Hopefully, CMS will issue future guidance and clarification that will answer these questions. Imaging and other in-office ancillary service providers must stay tuned for future interpretive guidance and rulemakings regarding the anti-markup provisions.
Responding to RAC Audits in the Tampa Bay Area
