Advisories

CMS Goes After Self-Referral with a Focus on Diagnostic Tests

July 13, 2007

On July 2, 2007, the Centers for Medicare & Medicaid Services issued the proposed 2008 Medicare Physician Fee Schedule (“MPFS”). As usual, a vast majority of the proposed rules pertain to changes in the MPFS that will go into effect January 1, 2008. But in what has also become a recent trend, CMS took the opportunity to issue other Medicare-related proposals. In particular, the agency proposes significant rule changes to the Stark Law self-referral prohibition and to standards and rules that apply to independent diagnostic testing facilities (so-called “IDTFs”). In addition, CMS proposes a new “antimarkup” rule for the professional component (the so-called “PC”) and the technical component (the so-called “TC”) of most diagnostic tests.

The agency’s stated rationale behind proposing many of these changes (consistent with some of its recent pronouncements) is to eliminate certain types of relationships that have developed over the years which are viewed by CMS as creating incentives to overutilize or as skirting the intent of the Stark Law (albeit in ways that are legal under current rules).