CMS Proposes Expanding the Purchased Diagnostics Rule to Cover the Professional and Technical Components of Diagnostic Services

In its proposed update to the Medicare Physician Fee Schedule for Fiscal Year 2008 (the “Proposed 2008 MPFS Update”), the Centers for Medicare and Medicaid Services (CMS) has revisited the issue of the appropriate scope of the purchased diagnostics rule (42 U.S.C. § 1395u(n)(1); 42 C.F.R. § 414.50) and its interplay with Medicare’s reassignment rules and the Stark law to address what CMS characterizes as “revenue-driven arrangements that may be facilitating over utilization of diagnostic services.” 71 Fed. Reg. 69,624, 69,688 (Dec. 1, 2006). CMS, however, has approached the issue in a different, and more intellectually consistent, manner in the Proposed 2008 MPFS Update than it did in last year’s proposed update.

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