Health Law Blog - Healthcare Legal Issues

Archive for the ‘Radiology and Imaging’ Category

Block Leasing of Group Practice Facilities – Anti-Kickback Statute Risks

Friday, October 18th, 2013

Block Leasing of Ancillary Services – Risks Under The Anti-Kickback Statute

Block Lease Anti-kickback StatutePhysician groups will often look for ways to share the expenses of excess capacity of high cost center ancillary services.  One approach that is sometimes considered is leasing the ancillary center to another physician group. 2009 changes to the Stark Regulations established new requirements for part-time leasing arrangements.  “Per use” arrangements are now prohibited under the Stark Law which applies when the ancillary service is categorized as a designated health service under the Stark Law.  Comments to the 2009 Stark Regulations maintained an opening to permit some  “block leasing” or “time sharing” arrangements.  CMS left open the parameters that must be met making compliance a bit tricky.  But block leasing arrangements are at least possible in theory under the Stark Law.  Until a few years back, block leasing arrangements were a relatively common way to permit separate physician groups to, in effect, share an ancillary service line. An OIG Advisory Opinion that was issued in 2010 cast a significant shadow on block leasing arrangements; including those arrangements that previously appeared to be legitimated under the Stark Law.  The 2010 Advisory Opinion refused to endorse a block leasing arrangement between two physician groups.

OIG Advisory Opinion 08-10, an oncology group asked the OIG to approve a block lease of  a radiation therapy facility to various different urology groups.  The block lease included all equipment, facility, and staff necessary for the urology group to provide radiation therapy services for their own patients.  The block leasing arrangements were structured in a manner suggested by CMS comments to be legitimate under the Stark Law.   Even though the arrangement likely complied with the Stark Law, the OIG raised concern and refused to endorse the arrangement under the Anti-Kickback Statute.  The OIG expressed concern that the block lease was nothing more than a  vehicle to permit the urology groups to profit from their referrals for radiation therapy services.  The OIG seemed to focus on many of the same factors that it had previously identified in joint venture arrangements.  For example, the OIG pointed to the fact that the oncology group was an existing provider of radiation therapy services and that the urology group was a natural referral source for those services.  Viewed from this angle, the OIG considered the block leasing arrangement to be nothing more than a cleaver way to compensate the urology group for its referrals.

The OIG noted that the opportunity for the urology groups to profit from radiation services amounted to “remuneration” under the anti-Kickback Statute.  The OIG looked past the fact that at least part of the arrangement complied with a safe harbor and instead focused on the overall “big picture” of the arrangement.

Advisory Opinion 08-10 related to a radiation therapy center.  The reasoning in 08-10 applies equally to all types of ancillary services.  Because the OIG’s concerns arise from the Anti-Kickback Statute, the concept is not limited to “designated health services” under the Stark Law.  Leasing any ancillary service and providing the opportunity for a physician group to profit from billings for that service are called into question by the opinion.

In Office Ancillary Service Exception to Stark – 2014 Budget Proposal

Friday, May 17th, 2013

Budget Would Limit “In-Office” Ancillary Service Exception to Stark Law 

radiology in office ancillary servicesPresident Obama’s 2014 proposed budget proposes to limit the types of ancillary services that physicians can provide in their offices.  Physician practices rely on the “in-office ancillary service” exception to the Stark Law to permit certain designated health services that are performed in their offices to be billed to governmental health programs.  The Obama budget proposes the possible elimination of certain types of services from protection under that exception, including physical therapy, radiation therapy, and advanced imaging services, from the list of services that can be provided in a physician’s office and billed without violating Stark Law.

The budget proposal suggests that physicians may be permitted to continue to provide these services in their offices if certain “accountability criteria” are met.  The contents of the accountability standards are not well defined.  Presumably, the standards would dictate standards for medical necessity or appropriateness.  Whatever the standards require, it appears that the judgment of physicians would be further regulated by these requirements if they are passed into law.

Physicians who provide these types of services in their offices should monitor the course of budget legislation as they plan the future of this line of their business.

False Claims Act and Medicare Conditions of Participation

Monday, April 29th, 2013

Sixth Circuit Finds Limits to False Claims Act 

False Claims Act LimitationsThe sixth circuit court of appeals has found that there are limits to how the False Claims Act can be used to attach health care providers.  The court ruled that the future of an Independent Diagnostic Testing Facility to assure appropriately qualified providers supervised diagnostic tests could not form the basis for a claim under the False Claims Act.

The suit has been in the courts since it was filed by a qui tam complainant in 2006.  The lower court had found that the failure of the facility to assure appropriate supervision made claims for services “false claims” to which the extreme penalties of the Federal False Claims Act could be applied?

The appellate court found that even though the provider’s activities may have violated the conditions of participation for IDTFs, they did not amount to a violation of a “condition of payment.”  Based on the distinction between conditions of participation and conditions of payment, the court refused to apply the False Claims Act.

The extent that other courts will adopt similar reasoning in other types of cases is yet to be determined.  For now, providers can take some assurance in the fact that courts may be willing to find some limitation on the ability of the government to use the rather extreme penalties under the False Claims Act to prosecute every failure to comply with a condition of participation.  Had the court upheld the lower court’s ruling, it could have resulted in significant potential exposure to health care providers who could have been subject to False Claims Act exposure for every nonconformity with conditions of participation.

Ambulatory Sugery Center Radiologist Rules – Proposed Simplified By CMS

Friday, February 15th, 2013

CMS Proposed Rule Would Simplify Ambulatory Surgery Center Radiologist Requirements 

Merging Physician Specialty PracticesOn February 7, 2013, the Center for Medicare/Medicaid Services (“CMS”) released a proposed rule that contains regulatory provisions to promote program efficiency, transparency and burden reduction.  The proposed rule proposes reforming certain Medicare regulations that CMS has identified as unnecessary, obsolete or excessively burdensome on health care providers and suppliers. 

One significant rule that CMS is proposing be abandoned is the requirement that Ambulatory Surgery Centers (“ASC”) meet the full hospital requirements for radiology services.  The full requirement must correctly be met by ASCs even though ASCs are only permitted to provide radiologic services that are integral to the performance of surgical services provided at the ASC. 

CMS concluded in the proposed regulations that some of the hospital conditions of participation requirements which are applicable to ASCs are unduly burdensome and create unnecessary costs.  Particularly, this CMS is proposing that the requirement to have a radiologist supervise the provision of radiologic services be deleted from the ASC conditions of participation.  CMS states that the requirement was overly aggressive since ASCs did not provide radiologic services that are required for interpretation or diagnosis.  CMS cites the cost of privileging radiologists and paying radiologist fees for oversight of radiology studies that are limited to services that are integral to surgical procedure.

The proposed revision would keep the governing body of the ASC responsible for determining if there are any procedures being performed at the ASC, which would require review by a radiologist.  The surgeon performing the procedure would be expected to be privileged and trained the use of imaging as an integral part of the procedure.  However, the use of radiology in connection with surgical procedures does not require the services of a radiologist in most cases.

The revised requirements would permit supervision of radiologic services used in an ASC by a doctor of medicine or osteopathy who is not a radiologist but is a general member of the ASC’s medical staff.  CMS welcomes comments on these proposed regulations.

The Ruder Ware Health Care Industry Focus Group has done a great deal of work structuring Ambulatory Surgery Centers to comply with regulatory requirements.  Please feel free to contact us with any questions regarding the structure or operation of your Ambulatory Surgery Center.

Telemedicine – States Look To Private Payment Mandates

Monday, February 11th, 2013

Telemedicine Private Reimbursement – More States Look at Private Payment Mandates

Telemedicine Telehealth Private PaymentMuch of the discussion surrounding telemedicine relates to factors that slow the implementation of its use.  One factor contributing to this is the lack of consistent and comprehensive reimbursement.  There is no systematic private payment across the country.  Many private payors refuse to cover telemedicine services.  Others do so on a limited basis.  The inconsistency makes the burden and costs high for providers who use telemedicine.

Some states have responded to this inconsistency by enacting laws.  As of the current date, 16 states have enacted some type of law mandating payment for health care services that are provided through use of telemedicine technologies.  Three states, Michigan, Maryland, and Vermont, added new laws to their books during 2012 that mandate some level of telemedicine reimbursement.

The American Telemedicine Association has reported that 8 additional states have introduced telemedicine reimbursement laws already in 2013.  Those states include Florida, District of Columbia, Connecticut, Mississippi, Nebraska, Indiana, South Carolina, and New Mexico.  Some of the listed states have introduced general requirements that telehealth be reimbursed without discrimination.  Others have addressed more limited coverage scope such as Indiana, which is considering coverage to home health agencies, federally qualified health centers and rural clinics.

It is uncertain what the final outcome of the recently introduced legislation will be.  It is also probable that more states will consider various forms of private payment requirements for telemedicine services.  We are likely to see more states address this issue over upcoming years as telemedicine gains more traction.

OIG Approves Free Insurance Authorization Services by Radiology Group

Tuesday, November 6th, 2012

OIG Advisory Opinion 12-10 – Radiology Insurance Pre Approval Service

A recent OIG advisory opinion addressed the legality, under the Medicare Anti-Kickback Statute, of a radiology group’s proposed program to provide free insurance pre-approval services when the treating physician orders a radiology service. The radiology group requested the advisory opinion out of concern that the potential value to the treating physician through reduction in administrative burden involved in gaining pre-approval could be considered to be “remuneration” that is intended to induce referrals to the radiology group.

In response to the advisory opinion request, the OIG stated that it believed the risk of fraud in the pre-authorization program to be minimal. The OIG reasoned that in the majority of cases, the treating physician is not likely to know who is responsible for obtaining pre-approval because the responsibility for obtaining pre-approval varies by insurance companies. The OIG also found it relevant that the program was made available to all patients without consideration for the source of referral or the identity of the payor. The OIG pointed to additional safeguards that were built into the proposed program.

Diagnostic or ancillary service providers who offer or wish to offer free pre-authorization services should reference the OIG Advisory Opinion No. 12-10. Although a favorable decision was reached in that opinion, the decision only protects the party who requested the opinion. Free pre-authorization services by diagnostic and ancillary providers can raise Anti-Kickback Statute concerns if a program is not structured to reduce risk.

For more information regarding this or other health law issues, contact John H. Fisher, II at Ruder Ware.

Diagnostic Imaging Radiology Test Coverage

Tuesday, January 17th, 2012

Diagnostic Imaging – Medicare Requirements Radiology Test Coverage

We often get questions regarding the conditions of coverage for non-hospital (radiology group) coverage of diagnostic radiology services.  Most questions involve the level of supervision that is required under Medicare rules and the requirements that a treating physician order the applicable test.  Oftentimes, these questions are tied to issues relative to the Stark Law exception for diagnostic radiology services that are performed following a consultation request from another health care provider. 

There are three core requirements for a radiology test to be covered under Medicare. The test must be properly ordered by a treating physician (with limited exceptions), the test must be performed by an authorized supplier, and the test must be performed under the proper level of physician supervision.  This article will briefly cover all three of the prerequisites to coverage of diagnostic radiology tests. The requirements described in this article applies to outpatient tests. Tests ordered in the hospital context are subject to slightly different rules and is beyond the scope of this article.

 Who may order diagnostic radiology tests?

The Medicare reimbursement rules have strict standards for determining who is authorized to order a diagnostic radiology test. The rules are different depending upon whether the provider is located in a hospital or in a non-hospital setting such as an independent diagnostic testing facility or physician’s office.

Generally, in a non-hospital setting, a diagnostic radiology test must be ordered by the treating physician. The treating physician rule is located in the Medicare regulations and requires that the diagnostic test be ordered by the physician (or in certain circumstances a non-physician practitioner) who furnishes a consultation or treats a beneficiary for a specific medical problem and who uses the results of the diagnostic radiology test in the management of the patient’s medical problem.

Generally, the Radiologist performing the test is not permitted to order a diagnostic radiology test.  There are certain exceptions to the treating physician rule which were described in Medicare Transmittal 80. Transmittal 80 describes limited circumstances where a radiologist is permitted to order a diagnostic test and still receive payment for the technical component under Medicare rules.

A radiologist is authorized to order a diagnostic mammography test based upon the results of an initial screening examination.  Where the treating physician cannot be reached and this is documented in the patient’s chart , the testing facility may furnish additional Diagnostic tests if the interpreting radiologist at the testing facility documents that there are abnormal results with the test originally ordered by the treating physician and that an additional test is medically necessary. In order to rely on this exception, the fact that the treating physician was not available and that additional tests were medically necessary should be well documented in the chart.  This exception requires the results of the test to be communicated to the treating physician and used by the treating physician in treating the patient’s medical condition.

Where medically appropriate, the interpreting radiologists is also permitted to make determinations regarding the parameters of the diagnostic test contained in the initial order from the treating physician. In cases where there is a clear and obvious error in the initial order, the interpreting physician may make appropriate modifications. The intervening physician may also cancel orders based upon the patient’s medical condition at the time of the diagnostic tests.

Except for the limited circumstances described above and included in Transmittal 8, the radiologist must always rely upon the order that is made by the treating physician and may not independently order diagnostic radiology test.

Who Is Qualified To Perform the Radiology Test?

The second major requirement for the coverage radiology services in a non-hospital setting is that only a qualified provider of the services may be reimbursed. Qualified providers include physicians, group practices of physicians, approved portable x-ray suppliers, independent diagnostic test testing facilities, nurse practitioners or clinical nurse specialist as authorized under state law, FDA certified mammography facilities, clinical psychologists for certain types tests, qualified audiologists, pathology slide preparation facilities, clinical laboratories for certain tests, and radiation therapy centers.

 Level of Physician Supervision For Diagnostic Imaging Tests

The last of the major requirements for coverage of radiology services is the level of physician supervision that is required given the specific test being performed. Radiology services must be provided under at least a general level physician supervision. Additionally, certain tests must be provided under direct or personal supervision, which require higher levels of physician presence and involvement. Failure to provide the appropriate level of physician supervision and to document the supervision in the chart will result in loss of coverage under Medicare and Medicaid. Any claims submitted in spite of not meeting the supervision requirements will be considered to be not reasonable or necessary by CMS.

There are a few exception from the physician supervision requirements for certain limited types of tests. It must be kept in mind however that these exceptions are Medicare only exceptions and there may be other federal or state laws that apply to require physician supervision. Tests that are excepted from physician supervision requirements include diagnostic mammography procedures, diagnostic tests performed by a qualified audiologist and certain psychological tests.

You must determine whether general, direct or personal supervision is required in order to bill the applicable diagnostic radiology procedure. Failure to meet the appropriate supervision requirement will lead to loss of reimbursement. This can also be an area of potential civil money penalty exposure if billings are made in spite of there not having been appropriate supervision. Thus, the supervision requirement is a significant compliance issue for medical practices who must establish and maintain appropriate policies and procedures regarding supervision of various levels of radiology diagnostic test.

Each level of supervision has very specific requirements that must be met. For this reason it is important to know which level of supervision is required for the specific test being performed. General supervision requires that the procedure be furnished under the physicians overall direction in control. Physician presence is not necessarily required during the performance of procedures that require general supervision.  Under general supervision the physician is responsible for general supervision and training of support personnel who are actually performing the test services. The physician is also responsible for maintaining the necessary equipment and supplies for the safe operation of the diagnostic test.

Direct and  personal supervision each require higher levels of physician involvement and generally require some level of physician presence throughout the performance of the test.  Direct supervision in the office setting requires that the physician be present in the office suite and immediately available to furnish assistance. Physical presence in the office suite must be maintained throughout the entire performance of the procedure. The physician is not required to be physically present in the room where the procedure is performed unless there is a need for the physician’s presence due to some problem that arises during the course of performing the test.

The highest level of physician supervision is personal supervision. Personal supervision requires a physician to actually be present in the room during the performance of the procedure. Personal supervision generally involves diagnostic tests with invasive or otherwise dangerous aspects.  One significant example of a test that requires personal supervision are contrast studies.

It is important to know what level of supervision is required for the test that is being performed. The level of supervision that is required for each test is included in the Physician Relative Value Fee Schedule.  The CMS web site includes a spreadsheet that designates the level of supervision that is required for a variety of services including diagnostic imaging services.  The spreadsheet includes a column for “physician supervision.”  The column indicates a numerical value with “1” indicating general supervision, “2” indicating direct supervision and “3” indicating personal supervision.

 Physician practices and compliance officers should be certain that their policies are in line with CMS requirements for coverage of diagnostic radiology test. Radiology groups must be certain that the tests that they are charged with performing meet each of the requirements stated above. Radiology groups need to be certain that the test is ordered by the treating physician unless inapplicable exception is present, and that the appropriate level of physician supervision is met for the type of test that is being performed.

 For more information regarding the requirements for radiology services and other legal issues that affect radiology practices and providers, please contact John Fisher at the Ruder Ware Health Care Industry Practice Group.

Accreditation Requirements – Advanced Diagnostic Imaging Services

Wednesday, August 17th, 2011

Advanced Diagnostic Imaging Service Accreditation Requirement

Providers of the technical component of advanced diagnostic imaging procedures will be subject to new accreditation requirements starting January 1, 2012.  Advanced diagnostic imaging procedures include diagnostic magnetic resonance imaging (MRI), computed tomography (CT), and nuclear medicine imaging such as positron emission tomography (PET).  X-ray, ultrasound, fluoroscopy procedures, and diagnostic and screening mammography are excluded from the accreditation requirement.

The 2008 law that created the accreditation requirement also required CMS to designate accrediting organizations.  CMS has approved three national accreditation organizations – the American College of Radiology, the Intersocietal Accreditation Commission, and The Joint Commission – to provide accreditation services for suppliers of the technical component of advanced diagnostic imaging procedures.

The accreditation requirement applies to all providers of advanced diagnostic imaging services, including physician offices that provide these services.  However, the accreditation applies only to the provision of the technical component and not the physician interpretation component of the procedures.

 There is also a potential billing implication to the new accreditation requirement.  It appears that the end result of requiring accreditation may be that the technical and professional component will not be able to be billed globally following the effective date of the accreditation requirement.  It appears that separate billing would be required due to the fact that the technical component will need to be billed with a “code 95” indicator while the professional component will not.  This billing issues has not been clarified by CMS.  Providers should seek guidance prior to the January 1, 2012 effective date.

The takeaway is that providers should not only deal with the accreditation requirement but must also re-examine how the services are billed.  This is particularly true in a physician practice that provides both the technical and professional component of advanced diagnostic imaging tests.

John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
500 First Street, Suite 8000
P.O. Box 8050
Wausau, WI 54402-8050

Tel 715.845.4336
Fax 715.845.2718

Ruder Ware is a member of Meritas Law Firms Worldwide

Search
Disclaimer
The Health Care Law Blog is made available by Ruder Ware for educational purposes and to provide a general understanding of some of the legal issues relating to the health care industry. This site does not provide specific legal advice and you should not use the information contained on this site to address your specific situation without consulting with legal counsel that is well versed in health care law and regulation. By using the Health Care Law Blog site you understand that there is no attorney client relationship between you and Ruder Ware or any individual attorney. Postings on this site do not represent the views of our clients. This site links to other information resources on the Internet; these sites are not endorsed or supported by Ruder Ware, and Ruder Ware does not vouch for the accuracy or reliability of any information provided therein. For further information regarding the articles on this blog, contact Ruder Ware through our primary website.