[Federal Register Volume 73, Number 2 (Thursday, January 3, 2008)]
[Rules and Regulations]
[Pages 404-406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-6280]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 414
[CMS-1385-F2]
RIN 0938-AO65
Medicare Program; Revisions to Payment Policies Under the
Physician Fee Schedule, and Other Part B Payment Policies for CY 2008;
Delay of the Date of Applicability of the Revised Anti-Markup
Provisions for Certain Services Furnished in Certain Locations (Sec.
414.50)
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This final rule delays until January 1, 2009 the applicability
of the anti-markup provisions in Sec. 414.50, as revised at 72 FR
66222, except with respect to the technical component of a purchased
diagnostic test and with respect to any anatomic pathology diagnostic
testing services furnished in space that: Is utilized by a physician
group practice as a ``centralized building'' (as defined at Sec.
411.351 of this chapter) for purposes of complying with the physician
self-referral rules; and does not qualify as a ``same building'' under
Sec. 411.355(b)(2)(i) of this chapter.
DATES: The provisions of this final rule are effective January 1, 2008.
However,
[[Page 405]]
the date of applicability of the provisions of Sec. 414.50, as revised
at 72 FR 66222, with respect to certain services furnished in certain
locations, as described herein, are delayed until January 1, 2009.
FOR FURTHER INFORMATION CONTACT: Donald Romano, (410) 786-1401.
SUPPLEMENTARY INFORMATION:
I. Background
The final rule with comment period, entitled ``Medicare Program;
Revisions to Payment Policies Under the Physician Fee Schedule, and
Other Part B Payment Policies for CY 2008; Revisions to the Payment
Policies of Ambulance Services Under the Ambulance Fee Schedule for CY
2008; and the Amendment of the E-Prescribing Exemption for Computer
Generated Facsimile Transmissions,'' that appeared in the November 27,
2007 Federal Register (72 FR 66222), amended the anti-markup provisions
for certain diagnostic tests in Sec. 414.50.
II. Provisions of the Final Regulations
As amended, the anti-markup provisions in Sec. 414.50 will apply
to the technical and professional components of diagnostic tests
covered under section 1861(s)(3) of the Social Security Act (the Act)
and paid for under part 414 (other than clinical diagnostic laboratory
tests paid under section 1833(a)(2)(D) of the Act, which are subject to
the special billing rules set forth in section 1833(h)(5)(A) of the
Act). If a physician or other supplier bills for the technical
component or professional component of a diagnostic test that was
ordered by the physician or other supplier (or ordered by a party
related to such physician or other supplier through common ownership or
control) and the diagnostic test is 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 technical
component or professional component 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.
The fee schedule amount for the test that would be allowed
if the performing supplier billed directly.
In revised Sec. 414.50(a)(2)(iii), we define the ``office of the
billing physician or other supplier'' as medical office space where the
physician or other supplier regularly furnishes patient care. With
respect to a billing physician or other supplier that is a physician
organization (as defined at Sec. 411.351 of this chapter), the
``office of the billing physician or other supplier'' is space in which
the physician organization provides substantially the full range of
patient care services that the physician organization provides
generally.
Subsequent to the publication of the final rule with comment
period, we received informal comments from various stakeholders who
allege that the application of the rule is unclear with respect to
whether certain types of space arrangements meet the definition of the
``office of the billing physician or other supplier.'' Further, some of
these stakeholders assert that patient access may be significantly
disrupted due to the alleged inability of physician groups to render
services in a cost-effective manner if medical office space that
satisfies the ``same building'' test in Sec. 411.355(b)(2)(i) of this
chapter for purposes of the physician self-referral rules in Part 411,
Subpart J of this chapter and other medical office space in which
patients are seen and that complies with the physician self-referral
rules are subject to the anti-markup provisions in revised Sec.
414.50. That is, physician groups allege that, in situations in which
they are subject to the anti-markup provisions and are limited to
billing Medicare for the amount of the net charge imposed by the
performing supplier, because they will not be able to realize a profit
and will not be able to recoup their overhead costs, they will not be
able to continue to provide diagnostic testing services to the same
extent that they are currently providing such services.
We are concerned that the definition of ``office of the billing
physician or other supplier'' may not be entirely clear and could have
unintended consequences. Accordingly, in order for us to study the
issues further, we are delaying until January 1, 2009, the
applicability of the revised anti-markup provisions in Sec. 414.50,
except for anatomic pathology diagnostic testing services furnished in
space that: (1) Is utilized by a physician group practice as a
``centralized building'' (as defined at Sec. 411.351 of this chapter)
for purposes of complying with the physician self-referral rules; and
(2) does not qualify as a ``same building'' under Sec.
411.355(b)(2)(i) of this chapter. During the next 12 months, we plan to
issue clarifying guidance as to what constitutes the ``office of the
billing physician or other supplier'' or propose additional rulemaking,
or both. Because anatomic pathology diagnostic testing arrangements
precipitated our proposal for revision of the anti-markup provisions
and remain our core concern, we are not delaying the date of
applicability with respect to anatomic pathology diagnostic testing
services furnished in space that: (1) Is utilized by a physician group
practice as a ``centralized building'' (as defined at Sec. 411.351 of
this chapter) for purposes of complying with the physician self-
referral rules; and (2) does not qualify as a ``same building'' under
Sec. 411.355(b)(2)(i) of this chapter. In addition, we are not
delaying the applicability of the revised anti-markup rule with respect
to the technical component of any purchased diagnostic test. The anti-
markup prohibition with respect to the technical component of purchased
diagnostic tests is longstanding and was incorporated into the expanded
and revised provision of Sec. 414.50. Accordingly, it will remain
applicable to the technical component of any purchased diagnostic test.
III. Waiver of Proposed Rulemaking
We ordinarily publish a notice of proposed rulemaking and invite
public comment on the proposed rule. The notice and comment rulemaking
procedure is not required, however, if the rule is interpretive or
procedural in nature, and it may be waived if there is good cause that
it is impracticable, unnecessary, or contrary to the public interest
and we incorporate in the rule a statement of such a finding and the
reasons supporting that finding. Likewise, we ordinarily provide for a
delayed effective date of a final rule, but we are not required to do
so if the rule is procedural or interpretive. Where a delayed effective
date is required, this requirement may be waived for good cause. We set
forth below our finding of good cause for the waiver of notice and
comment rulemaking and the waiver of a delayed effective date.
Our implementation of this action without opportunity for public
comment and without a delayed effective date is based on the good cause
exceptions in 5 U.S.C. 553(b)(3)(B) and (d), respectively. We find that
seeking public comment on this action is impracticable and contrary to
the public interest. We are implementing this delay of effective date
as a result of our review of the informal comments on the final rule
with comment period from various stakeholders. As discussed above, we
understand from those comments that patient access for common
diagnostic tests may be significantly disrupted
[[Page 406]]
unless we delay the effective date of revised Sec. 414.50 with respect
to anatomic pathology diagnostic testing services furnished in space
that: (1) Is utilized by a physician group practice as a ``centralized
building'' (as defined at Sec. 411.351 of this chapter) for purposes
of complying with the physician self-referral rules; and (2) does not
qualify as a ``same building'' under Sec. 411.355(b)(2)(i) of this
chapter. Likewise, if we do not make this final rule effective upon
publication, patient care may be significantly disrupted during the
interim period between the issuance of the rule and a delayed effective
date.
IV. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 35).
V. Regulatory Impact Statement
We do not believe that this delay in the date of applicability will
result in any significant economic impact on any small entity. Until
January 1, 2009, the majority of billing suppliers affected by the
revised Sec. 414.50 do not have to comply with the revised
requirements in Sec. 414.50.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: December 18, 2007.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: December 27, 2007.
Michael O. Leavitt,
Secretary.
[FR Doc. 07-6280 Filed 12-28-07; 1:17 pm]
BILLING CODE 4120-01-P