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Note from Hugh

Medicare Weekly Update, June 12, 2007

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This week, I'd like to respond to the following question we received from a reader regarding change request 5427, "Services not provided within the United States:"

"Here is the scenario: A hospital contracts with a radiology group to interpret radiology services. The hospital bills the technical portion and the radiology group bills the professional services. The radiology group subcontracts with a service who employs radiologist overseas to do a preliminary read for radiology exams performed by the hospital after hours. The radiology group then overreads the film and bills the professional fee.

"Question: Does this arrangement between the radiologist and overseas provider make both the pro fee billed by the radiology group and technical fee billed by the hospital not payable by Medicare, or does it only apply to the services that the radiologist is providing because that's the portion that involves overseas services?"

Change request 5427 is Medicare Benefit Policy Manual, Transmittal 66. The transmittal amends Chapter 16, Section 60 of the Medicare Benefit Policy Manual to add the following paragraph:

"Payment may not be made for a medical service (or a portion of it) that was subcontracted to another provider or supplier located outside the United States. For example, if a radiologist who practices in India analyzes imaging tests that were performed on a beneficiary in the United States, Medicare would not pay the radiologist or the U.S. facility that performed the imaging test for any of the services that were performed by the radiologist in India."

I recently discussed this change with Fred Grabau at CMS. Mr. Grabau clarified that the payment limitation only applies to the portion of a service furnished outside the United States. He explained that the payment limitation would therefore not apply to technical component radiology services furnished entirely within the United States, even if some portion of the professional component was performed outside the United States, so long as the hospital billed separately for the technical component only. On a related note, Mr. Grabau commented that CMS had received several inquiries regarding whether a radiologist furnishing professional interpretations in the United States could bill Medicare for the interpretation if a preliminary read was performed outside the United States. According to Mr. Grabau, CMS has not yet decided whether it will issue any guidance or clarification on this issue.

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