Section 1842(n)(1) of the Social Security Act (the Act) establishes payment rules for certain diagnostic tests (other than clinical diagnostic laboratory tests) where the physician performing or supervising the test does not share a practice with the billing physician or other supplier. Examples of tests covered under this rule include, but are not limited to: x-rays, EKGs, EEGs, cardiac monitoring, and ultrasound services furnished on or after January 1, 1994. (Note that screening mammography services are covered under another provision of the Act and are not subject to the anti-markup payment limitation.) The anti-markup payment limitation applies to the technical component or “TC” of certain diagnostic tests that are payable on the Medicare Physician Fee Schedule (MPFS). Effective January 1, 2009, the anti-markup payment limitation also applies to the professional component or (“PC”) of diagnostic tests (other than clinical diagnostic tests). The anti-markup payment limitation only applies when a physician (or other supplier) orders and bills for a diagnostic test in which the TC or PC is performed by a physician who does not “share a practice” with the ordering/billing physician (or other supplier).

C. Sanctions

Physicians who knowingly and willfully, in repeated cases, bill Medicare beneficiaries amounts beyond those outlined in this chapter are subject to the penalties contained under §1842(j)(2)