Notice: This CMS-approved document has been submitted - Philips ...

CMS-1403-FC
commenter supported adoption of the second alternative
proposed definition. The commenter expressed its view that
this definition provides sufficient flexibility to ensure
that the anti-markup provisions will not be applied unless
there is an inadequate relationship between the individual
who performs or supervises the test and the billing entity.
Response: As explained above at II.N.2., we are
deleting from §414.50 purchased tests and interpretations
from an “outside supplier” as separate bases for imposing
an anti-markup payment limitation. After reviewing the
comments, we have concluded that employing the concept of a
purchased TC or PC as a separate basis for imposing an
anti-markup payment limitation is unnecessary, redundant,
and potentially confusing in light of our decision to
finalize Alternative 1 and to allow arrangements that do
not meet the requirements of Alternative 1 to avoid
application of the anti-markup provisions if they meet, on
a case-by-case basis, the requirements of Alternative 2.
If we were to adopt any of our proposals for the definition
of “outside supplier,” it would mean we would effectively
impose an anti-markup payment limitation on some
arrangements that meet the “substantially all” services
requirement of Alternative 1. We believe that a physician
who performs “substantially all” of his services through a
495