December 31, 2007 “Intelligence: Late Breaking Lab News”

There’s late-breaking news affecting new federal rules for the anti-markup provisions scheduled to become effective on January 1, 2008. Just days ago, the federal Centers for Medicare & Medicaid Services (CMS) issued a final rule that generally delays, until January 1, 2009, some of the anti-markup provisions in the 2008 Medicare physician fee schedule which were to take effect on January 1, 2008. However, Attorney Rick Hindmand of McDonald Hopkins observes that pathologists will want to note this fact: CMS specifically identified anatomic pathology diagnostic testing arrangements as its “core concern.” Therefore, CMS did not delay the rule with respect to anatomic pathology diagnostic testing services furnished in a centralized building that does not qualify as the “same building” under the Stark regulations.

MORE ON: Anti-Markup

 CMS said it would delay until next year the applicability of the anti-markup provisions in the 2008 Medicare physician fee schedule—except for the technical component of purchased diagnostic tests and any anatomic pathology diagnostic testing services furnished in space a physician group uses as: 1) a “centralized building” for purposes of complying with the physician self-referral rules; and, 2) does not qualify as a “same building.” The rule will be published in the Federal Register on January 3, 2008. It is notable that federal healthcare regulators are making this distinction. It indicates that interest remains keen to curb certain arrangements that allow specialist physicians to mark up anatomic pathology services.


Earlier in December, Resurrection Health Care of Chicago, Illinois, entered into an agreement to become an equal partner in the Alverno Clinical Laboratories venture, based in Gary, Indiana. Existing partners are the Sisters of St. Francis Health Servicesand Provena Health. Alverno CEO Cheryl Vance will be integrating the laboratory services at Resurrection’s eight hospitals with Alverno’s regional laboratory organization, including a central laboratory in Gary, Indiana, and 18 hospitals in Indiana and Illinois. The combined network of 26 hospital laboratories will become one of the nation’s largest integrated laboratory operations, both in size and geography served.

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Bio-Reference Laboratory, Inc. finished its fiscal year ending October 31, 2007, with a 30% gain in revenue, to $250.4 million. Average revenue per requisition was $71.06, up 6% for the year.

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