On January 1, 2009, the Centers for Medicare & Medicaid Services (“CMS”) enacted a new rule, called the anti-markup rule, that applies to certain diagnostic tests ordered and billed by physicians or their group practices. Any physician group that orders and bills for diagnostic tests must comply with the new anti-markup rule. CMS published the Final Medicare Physician Fee Schedule for 2009 in the Federal register on November 19, 2009. Among other things addressed in the Fee Schedule regulations are clarifications of the diagnostic testing anti-markup rule.
Prior to the 2009 Fee Schedule changes, the anti-markup rule provided that if a physician or other supplier bills for the technical component (“TC”) or professional component (“PC”) of a diagnostic test that was ordered by the physician or other supplier and the diagnostic test was either purchased from an outside supplier or performed at a site other than the office of the billing physician or other supplier, the payment to the billing physician or other supplier (less the applicable deductibles and coinsurance paid by the beneficiary or on behalf of the beneficiary) for the TC or PC of the diagnostic test may not exceed the lowest of the following amounts:
- The performing supplier’s net charge to the billing physician or other supplier;
- The billing physician or other supplier’s actual charge; or
- The fee schedule amount for the test that would be allowed if the performing supplier billed directly.
In the 2009 Fee Schedule, CMS has now clarified that the anti-markup provisions will not apply to the TC or PC of a diagnostic test where the performing physician shares a practice with the billing physician or other supplier. With respect to a TC or PC of a diagnostic testing service, the performing physician is considered to share a practice with the billing physician or other supplier if either of the following is met:
- Alternative 1: He or she furnishes substantially all (at least 75 percent) of his or her professional services through the billing physician or other supplier; or
- Alternative 2: The TC is conducted and supervised, or the PC is performed, in the office of the billing physician or other supplier. For purposes of this alternative, the “office of the billing physician or other supplier” is defined as the same building where the ordering physician performs substantially the full range of patient care services that the ordering physician generally provides.
© 2009 Parsonage Vandenack Williams LLC
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