Preparing for the 2008 OIG Work Plan

Each of these areas offers some insight into CMS’ thinking [about] these matters, and radiologists will be affected by most of these areas. Of course, not everyone in the imaging world will be concerned with everything mentioned in the plan, but each of these areas touches on radiology practices.

RACRI: In the item “payments for diagnostic x-rays in hospital ER department,” what is CMS looking for when it mentions an increase in utilization of ER department x-rays with resultant payments?

Balmer: I can only assume that CMS is concerned that [it is] overpaying or paying twice for x-rays taken and read in ER departments during patient encounters. In this item, CMS may be looking at how each contractor pays for the “formal” read, and if that read is the actual one they are paying for.

In an ER encounter when an x-ray is taken, the ER physician will often take an initial look at the film to try and identify a problem and treat it expeditiously. The study is then read later by a radiologist, who confirms or expands on the finding and dictates a report. CMS wants to pay only once for the read. It says that the physician who dictates the report and formalizes the study is the one to be paid.

CMS states in the Medicare Claims Processing Manual that the first claim received for the service will be the one paid. So, if the ER physician bills the service before the radiologist, the ER physician will be paid. The radiologist then redoes the study and bills a second read, usually on a later date.

This results in CMS paying for the read twice, when it may not be necessary. I can only assume that CMS expects radiology groups to have firm agreements in place with their hospital partners that prevent this form of overbilling. This OIG Work Plan item will address that concern.

RACRI: Regarding the item “SNF consolidated billing,” how do diagnostic services break down as far as billing between the nursing facility and the service provider?

Balmer: CMS mandated that certain diagnostic services, such as radiology diagnostic services, provided to residents of SNFs be made under arrangement. The SNF is paid for the technical portion of the diagnostic study under Part A of Medicare, included in the inpatient SNF DRG [diagnosis-related group].

As such, the agreement between diagnostic service providers and the SNF must specify that the SNF will be billed for the technical portion of the test and that the service provider may bill the professional component under the MPFS (Part B). Should the diagnostic physician bill both components, CMS will have effectively paid twice for the technical component. My presumption is that CMS will be evaluating the arrangements in place, and evaluate when and under what circumstances double billing occurs.

RACRI: What should radiology departments watch for in terms of “place of service” errors?

Balmer: As [it] state[s] in the Work Plan, CMS is concerned that certain hospital departments may bill for services at the higher office rate instead of the lower facility rate. Although CMS specifies in this topic that [it] will look at ambulatory surgical centers, this should nonetheless be of concern to radiology groups [that] operate departments in conjunction with hospitals. If those departments are true facility departments, they should be billed with the appropriate place of service, resulting in the proper facility payment being made.

In some cases, though the radiology group may indeed be operating in independent office locations adjacent to hospital campuses, the services should be billed out as place of service “office,” which carries a higher reimbursement rate. It will be interesting to see how this turns out, and [whether] CMS determines in the future that different arrangements are in order.

RACRI: What will CMS look for in terms of “assignment rules” by Medicare physicians?

Balmer: CMS will hit one of the oldest rules in the book: don’t balance bill. When you accept an assignment, you agree to accept the Medicare payment, plus any applicable deductible and copays, as payment in full. This Work Plan item may be quite extensive by [the] time [CMS] get[s] done with it. It could result in the examination of every aspect of billing and payment consolidation that a group engages in.

RACRI: OIG states that it will examine business relationships and the use of MRI under the MPFS. What does this mean?

Balmer: This looks to me to be a plan to evaluate Stark II provisions and their applicability to utilization patterns in diagnostic MRI. It seems clear there is concern that certain relationships between referring physicians, MRI service providers, and billing service operators may be suspect to a degree that cause higher utilization rates.

RACRI: Any final thoughts about the OIG’s Work Plan?

Balmer: Most of the other areas are pretty self-explanatory, and I don’t read much into them. I do want to add that I think the Medicare Secondary Payer issue, also self-explanatory, is of concern to radiologists as well.

Editor’s note: The OIG Work Plan says, under the Medicare Secondary Payer issue, that it will review Medicare payments for beneficiaries who have other insurance. The payments are required to be secondary to certain types of insurance coverage. “We will assess the effectiveness of current procedures in preventing inappropriate Medicare payments for beneficiaries with other insurance coverage,” the Plan says. “For example, we will evaluate procedures for identifying and resolving credit balance situations, which occur when payments from Medicare and other insurers exceed the providers’ charges or the allowed amount.”

Insider sources

Larry W. Balmer, CCP, compliance officer, HIPAA privacy and security, Radiology Incorporated, Mishawaka, IN, 574/258-1100, Ext. 284; lbalmer@rad-inc.com.

Ramy Fayed, Esq., associate, healthcare, Sonnenschein Nath & Rosenthal, LLP, 202/408-6193; rfayed@sonnenschein.com, www.sonnenschein.com.

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