Corporate Compliance

Q&A: Defective testing

Compliance Monitor, November 12, 2008

Q: If a radiology facility provides imaging studies below diagnostic quality in an office/imaging center, is that considered "defective testing?" If so, is that a form of fraud, or just a mistake? Is the insurance carrier (e.g., Medicare or a third party) entitled to receive money back on the claims?

A: In order for a service to be covered by Medicare, it must be reasonable and necessary.

The Medicare Program Integrity Manual (Chapter 13) states that a service is reasonable and necessary if it is:

  • Safe and effective.
  • Not experimental or investigational. (Exception: Routine costs of qualifying clinical trial services with dates of service on or after September 19, 2000, that meet the requirements of the Clinical Trials NCD, are considered reasonable and necessary)
  • Appropriate, including the duration and frequency that is considered appropriate for the service, in terms of whether it is:
    • Furnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient's condition or to improve the function of a malformed body member.
    • Furnished in a setting appropriate to the patient's medical needs and condition.
    • Ordered and furnished by qualified personnel.
    • One that meets, but does not exceed, the patient's medical need.
    • At least as beneficial as an existing and available medically appropriate alternative.

Any facility may have an occasional exam that is of poor quality due to inadequate prep, patient body habitus, patient movement during the exam, etc. However, if a facility consistently performs exams of poor quality, these services may not be considered reasonable and necessary, particularly when the poor result is a consequence of defective equipment, poorly trained personnel, or other avoidable factors. Certainly, any third party payer expects to reimburse only for those diagnostic tests that are of benefit in the patient’s care.

Fraud is a legal term with implications that can’t be discussed adequately in this column. However, when imaging quality issues are brought to the attention of management by employees, corrective action should always be taken promptly.

This reader submitted question was answered by Jackie Miller, RHIA, CPC, vice president of product development for Coding Metrix, Inc., in Dallas, TX.

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