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In recent years, Medicare and the insurance industry have pushed for fewer numbers of medical imaging tests such as MRIs and CT scans. They consider some tests unnecessary and would prefer to reduce the costs.
A fallout for imaging diagnostic testing facilities (IDTFs) under these circumstances is being targeted for improper billing based on these new regulations.
Understanding the Medicare Anti-Markup Rule
IDTFs must follow the Medicare Anti-Markup Rule that went into effect on January 1, 2009. Essentially, this rule establishes certain principles to use when determining whether an arrangement for diagnostic imaging is subject to the payment limitation set forth in the rule:
1. Alternative 1 is considered the Substantially All Test where arrangements are analyzed based on where the physician performs “substantially all” of his or her professional medical services. This is for the billing physician or supplier and the percentage has to be at least 75 percent. Services under these circumstances are not subject to the limitations under the anti-markup rule payment. If this service requirement is not met, a different analysis under Alternative 2, can be applied.
2. Alternative 2 is the Site of Service Test to determine whether payment limitations apply. Under this alternative, the billing physician’s office is the only acceptable place where tests conducted by an employee or independent contractor physician is acceptable. These will not undergo the application of using the anti-markup rule for payment limitation.
Although the Stark law typically applies to Medicare coverage and regulations for payments for supervised tests, providers who rely solely on Alternative 2 for approval must meet the same office requirement. This applies even if this supervision requirement is stricter than the requirements under Medicare coverage.
Restrictive Payment Limitations
Arrangements that are applicable within the sphere of provision through the anti-markup rule are also subject to restrictive payment limitations. What this means is anti-markup provisions require payments to the billing entity will be limited to one of the following, whichever is lowest:
• Net charge to the billing entity, which is either a supplier or performing physician
• Actual charge from the billing entity
• Test that would be allowed if the supplier or performing directly billed for the test based on a fee schedule
One thing to note about the net charge amount is this must be determined without referring to any other charge intended to reflect equipment cost or leased space to the performing supplier. This also applies if it is through the billing physician.
When the net charge approach is used, the billing physician or supplier will be limited to recovering salary and benefits costs it paid to a performing supplier.
Other Legal Issues Facing IDTFs
Radiology providers and diagnostic testing facilities have many other legal and regulatory challenges. They must be mindful of these on a daily basis as they conduct tests for patients. Some of the common legal issues include:
• Contractual and transactional arrangements
• HIPAA compliance
• Requirements for Medicare enrollment
• Requirements for patient notifications
• Stark Law and Anti-Kickback statute
Widespread fraud and abuse activities in healthcare makes it necessary for IDTFs to secure legal representation from experienced lawyers to help them navigate these issues.
Changing and Complex Rules Require the Help of Lawyers for Radiology Providers IDTFs
Rules affecting diagnostic centers when performing tests are complex and subject to change. If your office or IDTF provides any testing services, you need the help of lawyers who stay abreast of the changes that can affect your practice.
Raiser & Kenniff, PC is the type of law firm that not only is aware of how laws and regulations can affect your imaging business, but we also know how to make sure you are compliant. We will also defend your position if there is ever is a question about whether you are committing fraud or abuse.
Failing to be compliant could lead to losing your provider number and enduring an audit that results in a judgement to make a significant repayment of overpayment of services. Other adverse consequences may apply. Call us today so we can begin building either a compliance program or strong defense.