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CMS-1403-FC
service” approach because, in the commenter’s view, it
would better protect against physicians who wish to profit
from their own referrals by preventing a multi-specialty
physician organization with several practice locations from
benefiting from its referrals to one central anatomic
pathology laboratory. The commenter acknowledged that
these “hub-and-spoke” arrangements may offer the advantage
of patient convenience where diagnostic testing occurs
following an office visit with the patient present (for
example, an x-ray), but, in the context of anatomic
pathology services, these arrangements do not benefit the
patient and may result in overutilization and the provision
of lower quality, less specialized services.
Response: We received support for both alternatives
regarding when to apply the anti-markup provision to the TC
and PC of diagnostic tests. After reviewing all the
comments, we have decided to finalize, with some
modification, both approaches. (As explained elsewhere in
this preamble, we have modified the Alternative 1 approach
so that the performing physician shares a practice with the
billing physician or other supplier if the performing
physician furnished “substantially all” (that is, at least
75 percent) of his or her professional services through the
billing physician or other supplier, and we have modified
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