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CMS-1403-FC
physician self-referral exception for in-office ancillary
services.
c. Alternative 1 (“substantially all” professional
services)
Comment: Under Alternative 1 as proposed, which we
referred to in the proposed rule as the “shares a practice”
approach (although the second alternative was also designed
to ensure, through a site-of-service methodology, that
performing physicians “share a practice” with the billing
physician or other group), the anti-markup payment
limitation would not apply if a service is provided or
supervised by a physician who “shares a practice” with the
billing physician or other supplier by virtue of working
exclusively with that physician or other supplier. Several
commenters noted that this alternative mirrors the
statutory language, but contended that the definition of
“shares a practice” suggested by the preamble of the
proposed rule (that is, if a physician contracts with more
than one group, he or she does not “share a practice” with
any group) is inconsistent with a common sense
interpretation of that term. A commenter stressed that
even a physician who spends 1 percent of his or her time
interpreting echocardiograms for an area hospital but
spends the remainder of his or her time working for his or
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