To offer better services to their patients and also to address continuing reductions in reimbursement for basic medical practice procedures, many medical group practices have established diagnostic testing procedures in their offices. By doing so they hope to capture revenue previously received by outside providers such as hospitals and independent diagnostic testing facilities (IDTFs). We have discovered that often, in creating these new businesses, the group practices do not generally understand the massively complex laws, rules and regulations that effect how and when they can legally bill for these services. The following sets forth some of those rules. They may surprise you.
Medicare Diagnostic imaging is a “designated health service” under the Federal “Stark” law. A physician in a group practice may only refer a Medicare patient for diagnostic imaging in his or her office if an exception to the Stark law can be utilized. Typically, that exception is the one known as the In-Office Ancillary Services Exception. For the exception to be met, the services must be provided either in the “same building” or in a “centralized building” of the group practice. These exceptions are very detailed, but can currently be satisfied if one is careful. Under Stark, if a self-referral is made and an outside physician (such as a radiologist) interprets diagnostic images for a Medicare patient on a site other than the group practices facilities, the group may not bill globally for those services. For those services the group (we are assuming that the supervision and other requirements are met) must bill separately for the technical component of the services, and the outside physician must bill separately for the professional component. In November 2007 The Centers for Medicare and Medicaid Services (CMS) attempted to significantly limit the ability of a medical practice to operate imaging facilities (particularly shared facilities) through the issuance of the 2008 Physician Fee Schedule final rule. Due to the chaos it produced, the effective date of the rule has for the most part been postponed until 2009, and is expected to be modified. The rule is not being discussed here but could have a further chilling effect once finalized and effective. Physicians must keep their eyes open as to future developments. Florida Patient Self-Referral Act Under the Florida Patient Self-Referral Act (the “Act”) diagnostic imaging is a designated health service. For a group practice to allow its physicians to refer imaging patients for ancillary services within the group the Acts group practice exception must be satisfied, as the other exceptions can rarely be satisfied. Among other things, the group practice exception only allows 15% of the patients seen by the group for imaging services to be from referrals by physicians not in the group. The group may bill globally for imaging services where the exception is met. Under the Act, however, any outside imaging referrals accepted by the group must be billed globally. Florida Fee-Splitting Laws If a group practice bills globally and pays an interpreting independent contractor physician only a portion of the professional component, as a reading fee, this manner of payment may, as to the interpreting physician, violate Floridas fee-splitting law. However, the medical practice may clearly retain a portion of the professional component reimbursement reasonably necessary to pay for its billing and collection services.
