We have extensive experience with RAC audits and appeals, working directly with healthcare entities subject to RAC audits.
We have represented Independent Diagnostic Testing Facilities (“IDTFs”), mobile leasing entities, radiology group practices, and other imaging providers.
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Articles Posted in Diagnostic Imaging

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The Patient Test Result Information Act – commonly referred to as Act 112 – now requires Pennsylvania imaging entities to directly communicate with patients if the entity finds “significant abnormalities” in the patient’s test results, as well as to continue to follow normal reporting procedure to inform the ordering physician. The catalyst for this legislation, signed by PA Governor Tom Wolf on October 24, 2018, was the perceived risk that the increased workload of health care providers increases the prospects that test results may be overlooked or misread. PA State Representative Marguerite Quinn, who introduced the bill, expressed worry over “two situations in which abnormal test results were not communicated to the patient, resulting in the unnecessary death of both people” in a February 20, 2015 memo. These circumstances caused her to press for better communication between imaging centers and any person who receives outpatient diagnostic imaging services.

A “significant abnormality” is defined by the Pennsylvania Medical Society (PAMED) as “a finding by a diagnostic imaging service of an abnormality which would cause a reasonably prudent person to seek additional or follow-up medical care within three months.”

Act 112 became effective on December 23, 2018 and will require imaging entities who provide outpatient services to notify their patients within 20 days of the date their results were sent to the ordering physician. The notification does not need to include a copy of the test results, but does need to include certain information, described below:

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On October 3, 2012, the OIG released its Work Plan for the FY of 2013. Throughout the week, we will be posting on various aspects of the Work Plan pertinent to our clients and our readers in the following areas:

• Hospitals • Home Health Agencies • Hospices • Evaluation and Management Services • Imaging Services • Diagnostic Testing • Sleep Testing
• Medical Equipment and Supplies
• Medicare Audits and the Appeals Processes
Check back every day for updates!
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The Office of Inspector General (“OIG”) recently released a report entitled Questionable Billing Patterns of Portable X-Ray Suppliers (“Report”) wherein it identified portable x-ray suppliers with billing patterns associated with inappropriate Medicare payments. As a result of its Report, the OIG made recommendations to the Centers for Medicare and Medicaid Services (“CMS”) to account for inefficiencies in its reimbursement of portable x-ray suppliers.

Reimbursement for Portable X-Ray Services
By way of brief background, the conditions of participation for portable x-ray services, at 42 CFR 486.106, provides, in its entirety, the following:

§ 486.106 Condition for coverage: Referral for service and preservation of records.
All portable X-ray services performed for Medicare beneficiaries are ordered by a doctor of medicine or doctor of osteopathy and records are properly preserved.
(a) Standard–referral by a physician. Portable X-ray examinations are performed only on the order of a doctor of medicine or doctor of osteopathy licensed to practice in the State. The supplier’s records show that:
(1) The X-ray test was ordered by a licensed doctor of medicine or doctor of osteopathy, and (2) Such physician’s written, signed order specifies the reason an X-ray test is required, the area of the body to be exposed, the number of radiographs to be obtained, and the views needed; it also includes a statement concerning the condition of the patient which indicates why portable X-ray services are necessary.
(b) Standard–records of examinations performed. The supplier makes for each patient a record of the date of the X-ray examination, the name of the patient, a description of the procedures ordered and performed, the referring physician, the operator(s) of the portable X-ray equipment who performed the examination, the physician to whom the radiograph was sent, and the date it was sent.
(c) Standard–preservation of records. Such reports are maintained for a period of at least 2 years, or for the period of time required by State law for such records (as distinguished from requirements as to the radiograph itself), whichever is longer.

Moreover, the Medicare Claims Processing Manual (Pub. 100-4, Ch. 13 Sec. 90) provides that Medicare reimburses portable suppliers separately for up to four (4) components of the portable x-ray services:

1. Transportation Component – Transporting the equipment to the beneficiary’s location,
2. Setup Component – Setting up the equipment for use,
3. Technical Component – Administering the test, and 4. Professional Component – Interpreting the results.

According to the Report, “[e]ighty percent of the amount Medicare paid to portable suppliers in 2009 reimbursed them for transporting and setting up the x-ray equipment.” When reimbursing for the Transportation Component, Medicare pays for the full Transportation Component once per each trip to a particular location. Therefore, if a supplier is furnishing x-ray services to three beneficiaries at one nursing home, on one trip, it will pay 1/3 of the Transportation Component for each beneficiary (totaling one full Transportation Component). On the other hand, if a supplier furnishes x-ray services to three beneficiaries at one nursing home on three separate trips, on the same day, Medicare will pay for the full Transportation Component for each return trip to a facility on a particular day.

Questionable Billing Patterns
In is evaluation, the OIG developed the following eight (8) characteristics that described questionable billing patterns:

1. Portable services ordered by nonphysicians
2. No recent contact between beneficiary and ordering provider
3. Same-day services in multiple settings 4. Billing for return trips 5. Portable x-rays per beneficiary 6. Beneficiary contact with multiple portable suppliers 7. Beneficiary use of stationary x-ray services 8. Beneficiary durable medical equipment (“DME”) utilization

The OIG found the following of the 352 portable x-ray suppliers in its population:

• 20 (5.7%) suppliers met the criteria for identifying questionable billing patterns where the suppliers exceeded thresholds for questionable billing on at least two (2) individual characteristics as well as the threshold on the combined score (describing the suppliers’ overall billing patterns)
• Medicare paid portable x-ray suppliers roughly $12.8 million for return trips to nursing facilities
• Medicare paid at least $6.6 million for portable x-ray services that were ordered by nonphysicians and, therefore, not covered

The OIG recommended the following to CMS in connection with its findings:

• Take appropriate action on the 20 portable x-ray suppliers referred by the OIG;
• Establish a process to periodically identify portable x-ray suppliers that merit greater scrutiny and follow up as appropriate;
• Determine what portion of the $12.8 million CMS paid for return trips in 2009 actually reimbursed suppliers for incorrectly billed Transportation Component claims and collect overpayments where appropriate;
• Collect the $6.6 million in overpayments for portable x-ray services rendered in 2009 that were ordered by nonphysicians; and • Implement procedures to ensure that CMS pays for portable x-ray services only when ordered by a physician and establish appropriate controls.

CMS concurred with the OIG’s recommendations and has taken action to address its reimbursement processes as they relate to portable x-ray suppliers. Portable x-ray suppliers should continue to monitor and assess their billing practices and claims submission to ensure compliance with the applicable laws and regulations.
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As we reported in previous blog entries regarding the 2012 Physician Fee Schedule, the Centers for Medicare and Medicaid Services (“CMS”) will be expanding its application of the Multiple Procedure Payment Reduction (“MPPR”) to the professional component (“PC”) of certain diagnostic imaging procedures. Currently, the MPPR only applies to the technical component (“TC”) of certain diagnostic imaging services where full payment is made for the service with the highest TC payment and payment is made at 50% for each subsequent service furnished by the same physician to the same patient in the same day. Under the new rule, full payment will be made for each PC and TC service with the highest payment with payment made at 75% for each subsequent PC service furnished by the same physician to the same patient on the same day. CMS will not be applying the imaging PC MPPR provided by group practices at this time.
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On July 19, 2011, the Centers for Medicare and Medicaid Services (“CMS”) published in the Federal Register its CY 2012 Physician Fee Schedule Proposed Rule (“Proposed Rule”). On November 1, 2011, CMS issued its CY 2012 Physician Fee Schedule Final Rule (“Final Rule”), in part, to “address changes to the physician fee schedule and other Medicare Part B payment policies to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services.” Most notably for providers and suppliers of radiology services, is the expansion of the multiple procedure payment reduction (“MPPR”) policy to the professional component (“PC”) of certain advanced diagnostic imaging services (e.g., CT, MRI and Ultrasound). For a more detailed explanation regarding the MPPR and the Proposed Rule, please see this article published by The HLP founding shareholders, Adrienne Dresevic, Esq. and Carey F. Kalmowitz, Esq.

In response to an overwhelming majority of negative feedback CMS received on the Proposed Rule with respect to the MPPR, CMS determined that a 25% reduction in the PC of second and subsequent advanced imaging services was appropriate (versus the proposed-50% reduction). Therefore, beginning January 1, 2012, the MPRR would apply to the PC of certain advanced imaging services.

Radiology providers and suppliers are being called upon to urge their Representatives to support HR 3269, the “Diagnostic Imaging Services Access Protection Act of 2011,” which, if enacted, would prevent the MPPR from being applied to the PC of imaging services.
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CMS Issues 2012 Final Physician Fee Schedule. On July 19, 2011, the Centers for Medicare and Medicaid Services (“CMS”) published in the Federal Register its CY 2012 Physician Fee Schedule Proposed Rule (“Proposed Rule”). On November 1, 2011, CMS issued its 2012 Final Physician Fee Schedule (“Final Rule”), in part, to “address changes to the physician fee schedule and other Medicare Part B payment policies to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services.” Some key provisions of the Final Rule are set forth below:

  • Payment Reduction Pursuant to the Sustainable Growth Rate – Payments to providers under the Medicare Physician Fee Schedule is set to be reduced by 27.4%, as required by the Sustainable Growth Rate formula, beginning January 1, 2012 absent legislative measures to block to reduction.
  • Addition of Certain Telehealth Services – Generally speaking, CMS reimburses providers for telehealth services–located at a distant site–furnished to an eligible telehealth beneficiary in an originating site. In the Final Rule, CMS proposes adding smoking cessation services to the services to the list of Medicare telehealth services, but notably, chose not to include online evaluation and management (“E&M”) services (i.e., to add CPT code 99444) because “(1) these services are non-face-to-face; and (2) the code descriptor includes language that recognizes the provision of services to parties other than the beneficiary and for whom Medicare does not provide coverage (for example, a guardian).”
  • Expansion of the Multiple Procedure Payment Reduction (“MPPR”) – The MPPR has been expanded to include the professional component of certain advanced diagnostic imaging services. For a more detailed explanation of this change, please see this blog entry.
  • Anesthesia Fee Schedule Conversion Factor – For 2012, the anesthesia conversion factor is $24.6712 with the national average anesthesia conversion factor equal to $15.5264, a decrease of 26.2% from 2011.
  • Additions to the Physician Self-Referral List of CPT/HCPCS Codes – Beginning January 1, 2012, the following tables provide the codes will be added and removed as designated health services (“DHS”) for purposes of the physician self-referral law (a/k/a the Stark Law):

Table 82.jpg

Table 83.jpg
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The Medical Payment Advisory Commission (MedPAC) plans to release a recommendation calling for a reduction in the use of imaging services, including MRIs, CT scans and nuclear medicine. MedPAC’s advisory opinion would require some physicians and their patients to obtain pre-approval from Medicare for advanced imaging services. The proposal, if implemented without modification, would apply to physicians determined to have higher-than-average rates of inappropriate use of such imaging.

Imaging is one of the fastest-growing Medicare costs, rising from $6.5 billion to $11.7 between 2000 and 2009. CMS believes such restrictions “could add more front-end approaches to better ensure appropriate payments, such as requiring physicians to obtain prior authorization from Medicare before ordering an imaging service.”

Detractors of MedPAC’s recommendations argue that such restrictions on imaging services are premature on account of the regulations enacted in recent years to slow the growth of imaging expenditures. In response to the recommendation, a coalition of imaging manufactures, medical providers and patient groups urged MedPAC to reconsider, warning that implementation of the recommendation would limit access to life-saving diagnostic imaging services, which has the potential to impact the delivery of care to nearly 48 million Medicare beneficiaries.

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A Florida radiology clinic, Midtown Imaging LLC, and its former owners–Midtown Imaging PA and PBC Medical Imaging–have agreed to pay $3 million to settle allegations that Midtown Imaging LLC submitted false claims to Medicare between 2000 and 2008. The allegations arose from Midtown Imaging LLC’s lease and professional services agreements with referral sources that were in violation of the Anti-Kickback Statute (AKS) and Stark Law (Stark), according to a Department of Justice press release. The whistleblowers, Dr. Teresa M. Cortinas and Dr. Walter E. Wojcicki, will receive $600,000.

Since January 2009, the Justice Department has recovered over $7.3 billion in False Claims Act cases.
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CMS’s 2011 Final Physician Fee Schedule (the “Fee Schedule”) provides for over 2000 pages of new rules and regulations pertaining to physician reimbursement under Medicare for 2011. With the passing of the Patient Protection and Affordable Care Act (“PPACA”) and the Healthcare and Education Reconciliation Act (collectively referred to as the “Affordable Care Act”), physicians have found many new conditions tied to their reimbursement for rendering services to Medicare beneficiaries. Some of the notable changes are below:

• Sustainable Growth Rate (“SGR”) – The SGR is an annual growth rate that applies to physicians’ services paid by Medicare. According to the Fee Schedule, by January 1, 2011, the SGR for physicians will be cut by a total of 24.9%–once on December 1, 2010 and once on January 1, 2011. This SGR cut has been anticipated for physicians as it was to be in effect in June of 2010.

• Annual Wellness Visit (“AWV”) – Beginning January 1, 2011, Medicare will reimburse physicians for performing an AWV. An AWV takes into account a health risk assessment and creates a personalized prevention plan for beneficiaries. Certain elements must be identified in the beneficiary’s first visit that include: establishing or updating the beneficiary’s family and medical history, a list of the individual’s current providers and suppliers and medications prescribed, height, weight, and body-mass index, blood pressure, detection of any cognitive impairment, establishing a screening schedule for the next 5-10 years, establishing a list of risk actors and conditions for which interventions are recommended or underway, furnishing personalized health advice and referral to health education or preventive counseling services or programs.

• Elimination of Deductible and Coinsurance for most Preventive Services – Beginning January 1, 2011, the Part B deductible and 20% coinsurance will be waived for preventive services that have been either “strongly recommended” or “recommended” by the US Preventive Services Task Force.

• Incentive Payments to Primary Care Physicians – Primary care physicians are eligible for incentive payments of 10% of the primary care practitioner’s allowed charges for primacy care services under Part B. According to the Fee Schedule, a primary care practitioner is defined as:

1. A physician who has a primary specialty designation of family medicine internal medicine, geriatric medicine, pediatric medicine, nurse practitioner, clinical nurse specialist, or physician assistant; and
2. For whom primary care services accounted for at least 60% of the allowed charges under Part B for the practitioner in a prior period as determined by the Secretary.
Primary care services are defined as those services identified by the HCPCS codes of 99201-99215, 99304-99340, and 99341-99350. The incentive payments will be made on a quarterly basis based on the primary care services furnished and any other physician bonus payments for services that are furnished in Health Professional Shortage Areas.

• In Office Ancillary Services – for MRI, CT, and PET scans, physicians must disclose to patients, in writing, at the time of the referral that a patient may obtain the services from another provider. At the time of the referral, the referring physician must provide the patient with a list of five alternative suppliers (who supply the same service) within a 25-mile radius of the physician’s office location (please check back for a more detailed entry regarding this change).

• Modification of Multiple Procedure Payment Policy for Advanced Imaging Services – Effective January 1, 2011, CMS will reduce the payment rates for procedures associated with expensive diagnostic equipment assigning a 75% equipment utilization rate assumption to expensive diagnostic imaging equipment used in CT and MRI services.

• Maximum Period for Submitting Medicare Claims – For services furnished after January 1, 2010, the maximum period for submitting Medicare fee-for-service claims has decreased to 12-months from the date of service. However, there are four exceptions to this rule:

1. If CMS or one of its contractors determines that the failure to meet the 12-month deadline was due to a CMS or CMS contractor error or misrepresentation;

2. If CMS or one of its contractors determines that the failure to meet the 12-month deadline was due to the fact that a beneficiary was retroactively entitled to Medicare;

3. If CMS or one of its contractors determines that the failure to meet the 12-month deadline was due to a beneficiary being retroactively entitled to Medicare, but a state Medicaid agency recovered the Medicaid payment for the furnished service 6 months after the service was furnished; or
4.CMS or one of its contractors determines that the failure to meet the 12-month deadline was because, at the time the service was furnished, the beneficiary was enrolled, and subsequently disenrolled, in a Medicare Advantage plan or a PACE provider organization and the Medicare Advantage plan or PACE provider organization recovered its payment for the furnished service 6 months or more after the service was furnished.

The final rule will appear in the November 29, 2010 Federal Register. Except as otherwise specified, the policies and payment rates adopted in the final rule will be effective for services furnished on or after January 1, 2011. As is evident from these select provisions from the Fee Schedule (oftentimes driven by the provisions in the Affordable Care Act), physicians’ reimbursement for services rendered to Medicare beneficiaries is becoming increasingly more difficult for physicians to receive, especially with the significant decrease in the SGR. If the decrease in SGR is not postponed (or even eliminated), senior citizens will experience difficulty in accessing medical care–one of the evils the Affordable Care Act sought to address.
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The OIG will review the high-cost diagnostic tests to ensure that they were medically necessary by looking at the same diagnostic tests ordered by the primary care physician as well as the specialist. With respect to independent diagnostic testing facilities (IDTFs), federal regulations require compliance with 17 standards. The OIG will look at IDTFs to ensure compliance with all standards in addition to identifying billing patterns of non-compliant IDTFs.
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