2009 Physician Fee Schedule Rule Addresses Anti-Markup, Stark, IDTF, And Other Issues
On October 30, 2008, the Centers for Medicare & Medicaid
Services (CMS) put on display a copy of its 2009 Final Physician
Fee Schedule Rule for Calendar Year 2009 (Final Rule), which is
scheduled for publication in the Federal Register on November 19,
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In addition to adjustments in the amounts to be paid under
it, the Final Rule addresses significant Medicare payment policy
changes in a number of areas. These include, but are not limited
to, the Anti-Markup rule applicable to diagnostic tests;
independent diagnostic testing facilities (IDTF); the Stark Law;
the enrollment rules applicable to physicians and non-physician
practitioners; end-stage renal disease (ESRD) payment policies;
incentives for electronic prescribing; the calculation of physician
practice expense; and the beneficiary signature rule for ambulance
services. The following summarizes some of the most significant
parts of the Final Rule.
The Anti-Markup Rule for Diagnostic Tests
Perhaps the most closely watched regulatory change resolved in
the Final Rule relates to the so-called Anti-Markup rule applicable
to certain diagnostic tests. Historically, Medicare has limited
payments to physicians and other suppliers for "purchased
diagnostic tests" (other than clinical laboratory tests) if
the physician purchased the technical component (TC) from an
outside vendor. This was known as the "purchased diagnostic
test rule" and limited the amount the purchasing physician
could charge Medicare for such tests to the physician's
acquisition cost. In addition, the agency placed limitations on
when a physician or other supplier could purchase the professional
interpretation of such tests (PC) under the "purchased
interpretation rule."
In the 2008 Physician Fee Schedule Final Rule (2008 Rule), CMS
amended these rules to impose revised Anti-Markup restrictions on
both the TC and the PC of purchased tests or interpretations, and
placed new challenging limitations on which TCs and PCs could be
billed to Medicare at the full-fee schedule amounts, without
reduction to the "net charge" to the physician. CMS then
postponed the effective date of these changes until January 1, 2009
and indicated it would consider changes.
In the 2009 Final Rule, CMS made changes that moved away from
the concern regarding whether a test was "purchased" from
an "outside supplier" entirely. Instead, CMS is offering
two alternatives for complying with the new Anti-Markup rule that
focus on the underlying principle that there is no anti-markup
prohibition if the performing or supervising physician "shares
a practice" with the ordering physician.
Under the new Anti-Markup rule, CMS permits two alternative
approaches to demonstrate practice sharing, thereby permitting
a physician or other supplier to bill Medicare for the TC or PC of
a diagnostic test without the limitations of the Anti-Markup
restrictions. The Anti-Markup restrictions will not apply
if physician/supplier can meet either of the following two
alternatives:
Alternative 1: The "substantially all" test. The
physician supervising the TC or performing the PC performs
"substantially all" (at least 75 percent) of his or her
professional services for the billing physician or other
supplier.
OR
Alternative 2: The "site of service" test. The TC or
PC is performed by an employee or independent contractor physician
in the same building where the office of the billing (ordering)
physician or other supplier is located.
Alternative 1, the substantially all test, permits the
supervising or interpreting physician to engage in some part-time
outside work without sacrificing the ability to perform off-site
services for his or her main physician group. The 75-percent
standard may be inconvenient for some arrangements, but does track
the Stark regulation's "group practice" definition.
If a physician cannot meet the 75-percent substantially all test,
the physician's services may still meet Alternative 2, the site
of service test. CMS also clarified that locum tenens physicians
may substitute for a physician who meets Alternative 1 and provide
services to the permanent physician's group without triggering
the Anti-Markup restrictions.
Alternative 2, the site of service test, permits billing without
Anti-Markup restrictions if the TC or PC is conducted and
supervised or performed in the "same building" in which
the "office of the billing physician or other supplier"
is located. Moreover, the ordering physician may have multiple
offices, thus permitting compliance if the TC or PC is furnished in
any of those offices, so long as the ordering physician regularly
furnishes patient care in that location.
If neither alternative can be met, then the billing physician or
other supplier must bill Medicare the lowest of:
The performing supplier's net charge to the billing
physician or other supplier
The billing physician or other supplier's actual
charge
The Medicare fee schedule amount
Despite industry objections, CMS refused to modify its
definition of the net charge limitation as originally set forth in
the 2009 Physician Fee Schedule Proposed Rule (Proposed Rule). In
the case of the purchase of a test or interpretation for a fixed
fee, the net charge is easy to calculate. Greater challenges arise
in those cases where the TC or PC is performed by a component of
the group practice or compensation is otherwise based on the actual
costs of the performing physician. In these latter cases, the net
charge is likely limited to the salary and benefits paid
? and other overhead costs for the space or the equipment
may not be included.
The revised Anti-Markup rule will go into effect on January 1,
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Physician Self-Referral (Stark Law)
CMS has decided to delay finalizing its incentive payment and
shared saving programs exception to the Stark Law as proposed in
the Proposed Rule. CMS concluded it had not received sufficient
information or agreement through the public comment process to
allow it to finalize the exception. CMS is reopening the public
comment process for an additional 90 days following publication of
the Final Rule in the Federal Register. In doing so, CMS hopes to
obtain public comments providing specific details and practical
examples enabling CMS to craft one or more exceptions to the Stark
Law that will encourage the development of beneficial programs and
ensure transparency, accountability, quality of care, and the
prevention of disguised payments for referrals.
Additionally, CMS revised the definition of designated health
services (DHS) in 42 C.F.R.§ 411.351 of the Stark regulations
by adding the word "outpatient" before the phrase
"speech-language pathology services" in order to conform
with Section 143 of The Medicare Improvements for Patients and
Providers Act of 2008 (MIPPA). MIPPA had previously amended the
Stark Law to specify that, effective July 1, 2009, "outpatient
speech-language pathology services" are DHS. CMS also has
added a definition of outpatient speech-language pathology services
to 42 C.F.R....
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