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CMS' New Year Gift: Anti-Mark-Up Rule Delayed


Email Alert

January 2, 2008

On Friday, December 28, 2007, the Centers for Medicare and Medicaid Services (CMS) placed a final rule on display at the Office of Federal Register that delays for a year the effective date of the broad-sweeping changes to the "anti-mark-up rule." The "anti-mark-up rule" was first promulgated in the final rule issued November 27, 2007 (72 Federal Register 66222) as a part of the annual Medicare Physician Fee Schedule rule. The rule prohibited a mark-up on any diagnostic test other than those performed in the same office as where physicians provided substantially the full range of their services.

Strong reactions from physician groups prompted CMS to "study the issues further" by delaying the effective date of the anti-mark-up provisions until January 1, 2009. CMS promised that at some point during 2008 it would "issue clarifying guidance as to what constitutes the 'office of the billing physician or other supplier' or propose additional rulemaking, or both." CMS indicated it was waiving the proposed rule-making process because the rule being issued was "clarifying" in nature.

The delayed effective date does not apply, however—meaning the anti-mark-up rule does apply—to anatomic pathology diagnostic testing services furnished in space that: (1) is utilized by a physician group practice as a "centralized building" (as defined in the Stark rule, 42 CFR 411.351) for purposes of complying with the Stark rules; and (2) does not qualify as a "same building" under the Stark rules (42 CFR 411.355(b)(2)(i)). This appears to capture the "pod labs" situations which were a stated target of CMS' rule-making initiative.

The rule is scheduled to appear in the January 3, 2008, Federal Register.

We would like to thank Jim Flynn (Bricker & Eckler LLP, Columbus, OH) for providing this email alert.

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