ACR warns technologists, IDTFs about Medicare anti-markup cutbacks

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Technologists, ITFs cautioned by ACR about cutbacks. Source: Air Force Link

The ACR is advising members who interpret diagnostic studies for clinicians, independent diagnostic testing facilities (IDTFs) and other providers to pay heed to 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 said it has learned of arrangements in which the TCs, such as MRI procedures performed under a lease agreement, are billed to Medicare at a significant markup to the supplier’s actual charge to the billing entity.

The college said 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. At the time, the ACR said it urged CMS to adopt the 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 define the key term “office of the billing physician or other supplier.” The ACR said 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 healthcare groups protested to CMS that current space arrangements might fall short of complying with the definition, according to the ACR. 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:

  • The TC of a purchased diagnostic test; and
  • Any anatomic pathology diagnostic testing services furnished in space that 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 does not qualify as a "same building" under  Stark. 

Thus, the only radiology-related service that cannot be marked up is the TC of a purchased diagnostic test, according to the ACR. However, the professional component of such tests remains outside the anti-markup zone.

CMS’s delay also nullifies its decision to waive the Stark requirement of an onsite read for independent contractor radiologists, according to the college.