CMS 2009 Physician Fee Schedule - The Revised Anti-Markup Rules are Here
CMS has submitted its 2009 Physician Fee Schedule Final Rule to the Officer of the Federal Register for publication and the document should be published some time in November. As is usually the case, CMS has loaded the Physician Fee Schedule Final Rule with lots of interesting information. In addition to an updated list of the CPT codes that constitute "designated health services" under the Stark Law, and a re-opening of the comment period for the proposed Stark exceptions on gain sharing arrangements, this Final Rule contains a set of newly revised Anti-Markup Rules relative to the reassignment of billing for diagnostic testing services.
Originally, 42 CFR 414.50 contained a rule that prohibited a physician, who intended to bill for the technical component (TC) of a diagnostic test that was performed by someone other than the physician, from "marking up" the charge for the TC component of the diagnostic test above the actual cost of the test. In other words, if a physician wanted to purchase certain TCs of diagnostic tests from a hospital and then bill globally for the test (billing the hospital's TC and his own professional interpretation (PC) of the same test) the physician was prohibited from billing more for the TC of the test than what the hospital charged the physician to perform the test. This rule was generally known as the "Anti-Markup Rule."
In 2008, CMS revised the Anti-Markup Rule so that if a physician or other supplier bills for the TC or PC of a diagnostic test that was ordered by the physician or other supplier (or ordered by someone related to that physician or supplier through common ownership or control) and if the diagnostic test is either purchased from an outside supplier (such as a hospital) or performed at a site other than the office of the billing physician or supplier, the payment to the billing physician or supplier for the TC or PC of that diagnostic test cannot exceed the lowest of :
- the performing supplier's net charge to the physician;
- the billing physician or supplier's actual charge; or
- the fee schedule amount for the test that would be allowed if billed by the performing supplier directly.
Needless to say, this 2008 Final Rule was a mess! So much so that application of that Rule was delayed until January 1, 2009 due to the complexity of the Rule and the number of existing arrangements that needed to be unwound. And then, in the mean time, CMS has decided to further revise the Rule altogether.
Thankfully, and perhaps as evidence that CMS does listen to the provider communities concerns, CMS has adopted a revised Anti-Markup Rule that provides two different alternative ways to avoid the general prohibitions set forth in the 2008 Rule. Specifically, under Alternative 1, if the physician or supplier performing the test (i.e. the physician supervising the TC or a diagnostic test or performing the PC of a test, or both) performs "substantially all" (at least 75 percent) of their services for the billing physician or supplier, then none of the services provided by the performing physician or supplier on behalf of the billing physician or supplier are subject to the Anti-Markup Rule, irrespective of where (in terms of location) those services are performed. If the performing physician/supplier does not meet this "substantially all" test, but the TCs conducted or supervised or the PCs performed are done in the office of the billing physician or other supplier by an employee or independent contractor physician of the billing physician or supplier, then the services can still avoid application of the Anti-Markup Rule limitations. Under this Alternative 2, the focus is on where the performing physician or supplier provides that service rather than on for whom substantially all of his or their services are provided.
Unfortunately, CMS has not, despite these new amendments to the 2008 Rule, seen the need to delay application of the Anti-Markup Rule and all of its changes. So, providers for whom the Anti-Markup Rule is applicable ... particularly physician groups and other suppliers who purchase diagnostic testing services or any component of such services need to be in full compliance with these billing rules as of January 1, 2009.
