CMS to Delay Launching Most Anti-Markup Provisions Until 2009
ACR members who interpret diagnostic studies for clinicians, independent diagnostic testing facilities (IDTFs) and other providers should heed Medicare’s decision to delay implementing most of its tighter “anti-markup” provisions until Jan. 1, 2009. Under intense pressure from various groups to delay the controversial new rules, CMS has agreed to “study the issues further” and issue either more guidance or a new regulation later in 2008.
Medicare rules currently prohibit profiting from, or marking up, the technical component (TC) of certain diagnostic tests that outside suppliers perform but which a different individual or entity bills to Medicare. The ACR has learned of arrangements where the TC (e.g., MRI procedures performed under a lease agreement) is billed to Medicare at a significant markup to the supplier’s actual charge to the billing entity.
The more restrictive “anti-markup” provisions that CMS had proposed and decided to adopt as of November 2007 would have prevented billing physicians from marking up either the technical or professional component of diagnostic radiology services. The ACR urged CMS to adopt these provisions to restrict financial influence on patient care decisions and curb inappropriate imaging utilization.
However, CMS expressed concern in a Dec. 28, 2007 rule that it had failed to clearly define the key term “office of the billing physician or other supplier.” That is a crucial term because diagnostic studies performed at a site other than the biller’s office, or purchased from an outside supplier (e.g., clinician), would have been subject to the anti-markup provisions. Many health care groups protested to CMS that current space arrangements might fall short of complying with the definition. Additionally, some groups claimed that the tighter anti-markup rules would have “significantly disrupted” patient access to diagnostic services since physician groups supposedly could not provide such services cost-effectively under the new compliance landscape. CMS delayed implementing its anti-markup rules until Jan. 1, 2009 except for:
(1) The TC of a purchased diagnostic test and
(2) Any anatomic pathology diagnostic testing services furnished in space that (i) is utilized by a physician group practice as a "centralized building" (as defined by the Stark self-referral regulations) for purposes of complying with the physician self-referral rules and (ii) does not qualify as a "same building" under Stark
Thus, the only radiology-related service that cannot be marked up at all is the TC of a purchased diagnostic test. However, the professional component (PC) of such tests remains outside the anti-markup zone.
Equally important, CMS’s anti-markup delay also nullifies its decision to waive the Stark requirement of an “on-site” read for independent contractor radiologists. Therefore, where an ordering physician refers their own patient for radiology services, and contracts with an outside radiologist to interpret studies, the radiologist must do so at the ordering physician’s site for the ordering physician to bill Medicare for the PC service — and comply with Stark. Otherwise, the interpreting radiologist or their own group should bill Medicare separately for the PC. Radiology groups that interpret on a contractual basis for teleradiology companies to augment those companies’ interpretation capacity may continue to read studies off-site because those entities are not a ‘group practice’ under the Stark exception. This option only works if the radiology groups bill for their contracted PC services. If a clinician group bills under its Medicare number for interpretations rendered on its own patients, however, the arrangement between the radiology groups and the teleradiology companies would be subject to Stark and the off-site option could not exist.
The ACR soon will offer for members more guidance on the interplay between the current anti-markup rules, Medicare reassignment provisions and the Stark self-referral regulations.