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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Currently, Medicare Part B pays for imaging services pursuant to the physician professional cost component, the malpractice costs, and the practice expenses. Practice expenses are resources used in furnishing the services (i.e., rent, personnel costs, equipment costs, etc.). The OIG will review whether the Medicare payments for practice expenses “reflect the expenses incurred and whether the utilization rates reflect industry practices.” Furthermore, the OIG will review providers of portable x-ray services with unusual claim patterns.
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On October 4, 2010, the OIG released its Work Plan for the FY of 2011. 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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On September 28, the Office of Inspector General (OIG) posted Advisory Opinion 10-20 in which it analyzed another pre-authorization arrangement. This is the OIG’s third Advisory Opinion issued this year that favorably reviews the provision of free pre-authorization services to referral sources (please visit our September 9 and May 14 blogs both of which address favorable pre-authorization arrangements).

Under the Proposed Arrangement, Requestor is a physician-owned provider of professional radiology services. When a patient comes to Requestor’s facility, Requestor proposes to contact the insurer to provide any necessary information to obtain preauthorization. According to the Proposed Arrangement, free preauthorization services would be made available on an equal basis to all patients and referring physicians without regard to any physician’s volume or value of expected of past referrals. Further, in cases when the Requestor’s contract with an insurer precludes it from performing the pre-authorization services, Requestor would not do so. Under the Proposed Arrangement, the Requestor would ensure transparency by providing each physician with a copy of the information submitted to obtain the pre-authorization services, and it would make such information available to the Secretary of health and Human Services upon request. Because Requestor, ultimately, bears the risk of not getting paid by the insurance company, it offers this service to ensure that it obtains reimbursement for the services that it furnishes.

The OIG analyzed the Proposed Arrangement under the Anti-Kickback Statute (AKS) and, reiterated many concerns it expressed in its prior preauthorization opinions. However, similar to its previous opinions addressing pre-authorization issues, the OIG again concluded that even though the Proposed Arrangement could potentially generate prohibited remuneration under the AKS, it would not impose administrative sanctions as there was a low level of risk under the AKS for the following reasons:

1. The Proposed Arrangement would not target any referring physicians;

2. There are no implicit or explicit arrangements with the referring physicians to reward them for their referrals;

3. Requestor would be transparent with the insurance company–identifying itself while obtaining pre-authorization–and would provide physicians with a copy of the information submitted to the insurance companies; and
4. Requestor has a legitimate business interest in offering pre-authorization services because its payments are at stake if pre-authorization is not obtained for the services.

Advisory Opinion 10-20, the third pre-authorization opinion in four months, continues to reinforce the OIG’s prevailing view that free pre-authorization services, when carefully implemented and without regard for the value or volume of referrals, pose low, limited risks under the AKS. This opinion, in particular, has particular significance insofar as the OIG analyzed a structure consistent with the common paradigm of pre-authorization arrangements among imaging providers.
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The OIG released Advisory Opinion 10-13 on August 31, 2010, concerning a proposed-arrangement where a hospital would be providing pre-authorization services for diagnostic imaging. Requestor, a non-profit hospital, provides diagnostic imaging services to patients. Because many commercial insurers have begun requiring pre-authorization prior to covering diagnostic imaging services, the hospital has proposed to provide free pre-authorization services for all patients. Under this proposed arrangement, when a patient comes to the hospital, if the patient’s imaging procedure requires pre-authorization, the hospital’s Pre-Access Department contacts the patient’s insurer, provides it with the necessary information, and obtains the pre-authorization. The patient is not charged for this service and it is provided to all patients and referring physicians without regard to the volume or value of referrals. No physicians are paid under this arrangement.

The OIG determined that the potential remuneration generated under this arrangement did not rise to the level of sanctioning the hospital for the following reasons. First, while this service may relieve a physician’s administrative duties of obtaining pre-authorization him/herself, the arrangement does “not target any particular referring physicians” and any relief of administrative duties would “occur by chance, not design.” Furthermore, this service is offered to all patients and physicians, without regard to referrals. Second, the hospital will “not make payments to physicians under the…[a]rrangement, and it has no ancillary agreements with referring physicians that would otherwise reward referrals” to the hospital. Third, the hospital’s Pre-Access Department is transparent with insurers and physicians. Finally, the hospital has a “legitimate business interest in offering uniform pre-authorization services” because it is the hospital’s payments that are at stake if pre-authorization is not obtained.

Thus, the OIG has determined that, under this particular proposed-arrangement, a hospital providing pre-authorization for imaging services for patients seeking diagnostic imaging procedures is permissible.

This opinion is the second opinion the OIG has released regarding pre-authorization for imaging services. On May 14, 2010, we blogged on the first opinion, Opinion 10-04, in which the OIG approved a proposed-arrangement where an imaging center would provide free pre-authorization services under a similar arrangement as was proposed in Opinion 10-13.
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Founding partner, Adrienne Dresevic, Esq. was quoted in Kaiser Health News on August 23, 2010 in an article on the recent regulations pertaining to physician disclosure requirements involving imaging machines. Dresevic often writes articles and speaks across the nation about the laws and policies surrounding imaging arrangements.
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A bill introduced in the Senate on August 5, 2010 would set forth minimum credentialing standards for medical personnel who “perform or plan” medical imaging or radiation therapy procedures. The Consistency, Accuracy, Responsibility and Excellence (CARE) in Medical Imaging and Radiation Therapy Act, introduced by Sen. Harkin (D-IA) and Sen. Enzi (R-WY) responds to concerns that procedures like x-rays, CT scans, and MRIs are increasingly being performed by personnel without adequate training, and would go into effect in 2013. Currently, standards vary from state to state; the CARE Act isn’t meant to supplant or diminish more stringent standards that exist in some states. In addition, the Bill creates a grandfathering process for technicians who currently provide medical imaging or radiation therapy but don’t meet the new education standards. It also establishes alternative standards for rural and underserved populations.

Given broad-based support, according to a press release from Sen. Harkin, the Bill is expected to pass this year.
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Effective May 1, 2010, physicians, IDTFs and other Part B Suppliers furnishing Non-invasive Vascular Testing in Michigan must comply with new training and certification requirements. In part, the policy, as set forth in a new LCD, states:

A. Training and Certification

1. The accuracy of non-invasive vascular diagnostic studies depends on the knowledge, skill, and experience of the technologist and interpreter. Consequently, the physician performing and/or interpreting the study must be capable of demonstrating documented training and experience and maintain any applicable documentation. A vascular diagnostic study may be personally performed by a physician or a technologist.

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Effective March 15, 2010, pursuant to CMS’s update to the Medicare Claims Processing Manual addressing “Payment to Physician or Other Supplier for Diagnostic Tests Subject to the Anti-Markup Payment Limitation”, among other actions, The Centers for Medicare and Medicaid Services (“CMS”) has effectively eliminated an Independent Diagnostic Testing Facility’s (“IDTF’s”) or radiology group’s ability to bill its local carrier (the “MAC”) for interpretations performed by out-of-state physicians (the “CMS Change Request”). Rather, by operation of these Medicare changes and Medicare’s claims processing system, these imaging suppliers must now either take reassignment and bill the MAC in the interpreting physician’s jurisdiction (if and only if they are able to establish a practice location in that MAC jurisdiction for enrollment purposes), or have the interpreting physician bill directly for such services.

Unfortunately, for a substantial number of imaging suppliers (such as radiology groups and IDTFs, which are not subject to the anti-markup rule) that rely upon out-of-state teleradiology arrangements, according to our discussions with senior officials at CMS, until the agency publishes guidance to redress this issue, the only way to ensure payment by CMS of claims associated with these out-of-state interpretation services is to have the interpreting physician bill directly for his/her service. The only other option available for imaging suppliers is to accept reassignment from the out-of-state interpreting physician; however, this will require that the imaging supplier must be eligible to enroll in the out-of-state MAC jurisdiction. Notably, the issue remains unclear whether an imaging supplier will be able to enroll in the other jurisdiction if the supplier does not have a practice location in such jurisdiction. CMS has stated that a supplier without a practice location established in the jurisdiction will not be accepted during the enrollment process. During our discussions with CMS, agency officials indicated that they intend to issue further clarification on these issues. Imaging suppliers whose business operations are adversely affected by this recent CMS Change Request should remain alert for a future guidance on this issue by CMS in the form of another Change Request.
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Last week, the OIG released it’s Compendium of Unimplemented Recommendations that “consolidates significant unimplemented monetary and nonmonetary recommendations addressed to the Department of Health & Human Services (HHS) to provide information to interested parties about outstanding recommendations….” While these have not been implemented, it is something we want our clients and readers to be aware of. It shows the direction the OIG is going and where it is focusing its efforts. Some relevant recommendations are below:

1. Due to the high number of hospices that were overdue in their certifications and due to the almost 50% of hospices having health deficiencies, the OIG recommends that CMS adopt statutory or regulatory changes to establish requirements for the frequency of certifications for hospice performance and for enforcing the remedies for a hospice’s poor performance.
2. The OIG recommends that CMS strengthens its monitoring practices of hospice claims to ensure that they are properly submitted.

Home Health Agencies:
1. Due to the high levels of medically unnecessary care and fraudulent billing, the OIG recommends that CMS revise its regulations to require physicians to examine Medicare beneficiaries prior to ordering home health services.
2. For those HHAs performing poorly, the OIG recommends that CMS adopt and impose sanctions (besides termination from Medicare) to improve the quality of care.

Laboratory and Imaging Services:
1. To prevent over-utilization of laboratory testing, the OIG recommends that CMS reinstate beneficiary co-insurance and deductibles for lab tests.
2. The OIG recommends that CMS pursue legislation to set accurate and reasonable payment rates for lab tests as the carrier rates for nearly all lab tests varied.
3. Because few counties account for a large percentage of the Part B spending on ultrasound and because 20% of claims raised concern about whether or not they were appropriate, OIG recommends that CMS continue to monitor ultrasound claims to reduce Medicare’s vulnerability to questionable ultrasound claims.

Again, these are merely recommendations and have not been implemented. However, they are useful in seeing where the OIG is looking to make changes and what kinds of changes we can expect from CMS in the future. We will continue to keep you apprised of any updates and regulatory changes as they develop.
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