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CMS-1403-FC
particular billing physician or other supplier “shares a
practice” not only within the meaning of Alternative 1, but
also within the meaning of section 1842(n)(1) of the Act.
Moreover, although we considered adopting the second
proposed alternative definition of “outside supplier” so
that a TC would not be a purchased test if the supervising
physician is an employee or independent contractor of the
billing physician or other supplier and performs the
supervision in the office of the billing physician or other
supplier (regardless of the employment status of the
technician or where the technician conducts the test), this
too would be problematic in light of our decision to adopt
Alternative 1 but also allow arrangements that do not meet
the requirements of Alternative 1 to avoid application of
the anti-markup provisions by meeting, on a case-by-case
basis, the site-of-service criteria of Alternative 2. That
is, with respect to arrangements that do not meet the
requirements of Alternative 1 and thus must meet the site-
of-service requirements of Alternative 2, adopting our
second alternative definition of “outside supplier” would
have been superfluous because, under Alternative 2, the TC
must be both conducted and supervised within the office of
the billing physician or other supplier. We retain the
requirement, present in all of the proposed definitions of
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