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2009 MPFS offers imaging implications

Radiology Administrator's Compliance and Reimbursement Insider, October 1, 2008

On June 30, CMS posted its proposed updates to the Medicare Physician Fee Schedule (MPFS) for 2009. The updates, in addition to proposing a 5.4% payment decrease, include a proposal to require IDTF enrollment of physician office–based imaging providers and sig-nificant revisions to the purchased diagnostic test rule.

With the help of Thomas W. Greeson, Esq., health-care attorney at Reed Smith, LLP, in Falls Church, VA, we summarize the proposed updates and rules and their potential effect on diagnostic imaging arrangements.

If adopted, these changes could be effective as early as January 1, 2009. The CMS comment period ended August 29.

Physician offices required to enroll as IDTFs

Physicians and nonphysician practitioners (NPP) who perform diagnostic testing services for their patients—known as physician entities—are currently not required to enroll with Medicare as an IDTF, Greeson says. As a result, Medicare maintains a dual standard with re-spect to imaging services provided to its beneficiaries, he explains. IDTFs must perform imaging services in accordance with certain recently expanded performance standards, where-as physician entities are not subject to any of the quality standards.

CMS expressed concern in the 2009 MPFS proposal that such physician entities might be providing diagnostic testing services without the benefit of qualified nonphysician personnel.

In an attempt to address its concerns regarding the quality of services provided by physician entities, CMS proposed adding a new provision to the IDTF performance standards. It would require any phy-sician or NPP organization furnishing diagnostic testing services (with the exception of diagnostic mammography services) to enroll as an IDTF and be subject to most of the enrollment requirements for IDTFs. (See “Requirements and exceptions for IDTF enrollment” on p. 3.)

CMS wants to define a physician or NPP organization as any physician entity that enrolls in the Medicare pro-gram as a sole proprietorship or organizational entity, such as a clinic or group practice, Greeson says.

Further, the rule would apply to radiologist- and nonradiologist-owned imaging offices.

“The rule, as currently proposed, would have the sweeping effect of requiring essentially any physician or NPP office that performs diagnostic imaging services” to enroll in Medicare as an IDTF, Greeson says.

“Bluntly, this proposal is a frontal attack on self-referral,” he adds.

If this rule is adopted, it could result in a significant decline in the number of physician entities that offer diagnostic imaging services to their patients because it could be difficult for nonradiologist-owned offices to secure properly qualified nonphysician personnel, Greeson says.

In addition, if Medicare contractors continue to interpret the proficiency requirements to essentially require radiologist supervision of diagnostic imaging services, it could be difficult for other specialty practices to satisfy the proficiency requirements, Greeson says.

Finally, the proposed rule could result in a demise of leasing arrangements in which two or more physician groups lease an imaging center on a part-time basis in order to bill third-party payers for imaging services provided to their patients at the facility, he adds.

This proposed rule will undoubtedly generate con-troversy, Greeson says, noting “it could significantly limit the ability of nonradiologist specialty groups to bill for imaging services provided to their own patients.”

If adopted, the rule would become effective Sep-tember 30, 2009, for physician entities already enrolled in Medicare. Any newly enrolling entities would be subject to the rule effective January 1, 2009.

Other revisions

Greeson says to clarify the language of the provisions and address public concerns and comments, CMS sought public comment on the following two alternative pro-posals for revising the anti-markup provisions:

Under one approach, the anti-markup provision would apply if the professional or technical component of a diagnostic test is ordered by a billing physician and is either:

  • Purchased from an outside supplier
  • Performed or supervised by a physician who does not share a practice with the billing physician or physician organization

A performing or supervising physician can be considered to share a practice if that physician is employed by, or contracts with, a single physician or physician organization on a full- or part-time basis. However, a performing or supervising physician does not share a practice with the billing physician or organization if that physician is an employee of an independent contractor with more than one billing physician or organization.

Thus, supervising or interpreting radiologists who provide supervision or interpretation services to more than one physician or physician organization cannot share in that practice. Their services could trigger the anti-markup restriction, Greeson says. (See “Anti-markup provisions and the 2008 final rule” on p. 4.)

Greeson says he is concerned this first proposal, if adopted, could have the unintended consequence of decreasing the quality of diagnostic imaging services provided to Medicare beneficiaries.

This would happen by precluding nonradiology practices from contracting with radiologists to provide supervision services, he explains. Instead, nonradiology practices would use one or more of their own physicians to provide such supervision services. Whether the supervising physician provides quality services would likely depend on whether the proposed IDTF enrollment requirements are adopted and, if so, how CMS determines whether a supervising physician satisfies the proficiency requirements, Greeson says.

Under a second approach, CMS would maintain the current regulatory text that applies the anti-markup provisions to the technical and professional components of diagnostic tests performed outside the office of the billing physician or other supplier, Greeson says.

However, CMS is proposing to more broadly define the office of the billing physician or other supplier to include space in which diagnostic testing is performed, provided it is located in the same building in which the billing physician or other supplier regularly furnishes patient care. The term “same building” does not include services provided in vehicles, vans, or trailers in the parking lot of a medical office building.

“The above change in definition,” Greeson says, “would address concerns expressed by physicians who had previously structured diagnostic testing arrangements in reliance on the same building requirements of the in-office ancillary services’ exception to the Stark Law that those physicians would now be forced to terminate the arrangements because they would no longer be financially feasible.” If this change is adopted, it could significantly decrease the expansive scope of the anti-markup provisions, he explains.

Thus, it would have little, if any, effect on the proliferation of imaging services billed by ordering physicians, since such physicians tend to structure their imaging arrangements to meet the same building requirements of the Stark Law, Greeson says.

Insider source

Thomas W. Greeson, Esq., Reed Smith, LLP, 3110 Fairview Park Drive, Suite 1400, Falls Church, VA 22042-4503, 703/641-4200; tgreeson@reedsmith.com.

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