Medicare Proposes New IDTF Rules

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The Centers for Medicare and Medicaid Services (CMS) published on July 2, 2007, its 2008 physician fee schedule rule.  The advanced copy of the rule is available on CMS’ website, and it reveals that the physician fee schedule rule contains modifications to certain Stark regulations, the anti-markup rule, and, buried deep within, several changes to independent diagnostic testing facility (IDTF) performance standards.  This bulletin highlights the changes to the IDTF rules, which are as follows:

  • No sharing!  The proposed changes include a requirement that an IDTF must not “share space, equipment or staff or sublease its operations to another individual or organization.”  This change is designed to put an end to the practice of selling blocks of time to outside third parties, such as referring physician groups.  While CMS proposes that this change will only apply to fixed-base IDTFs, it is seeking comments on establishing similar requirements for mobile IDTFs.
  • Supervision.  CMS has retreated from its recent position that a supervising physician must be responsible for the “overall administration and operation of the IDTF.”  “Overall administration and operation” included a duty to assure compliance with regulatory requirements.
  • Effective date for billing.  CMS had proposed, and subsequently withdrawn, the requirement that an IDTF could only bill for Medicare services from and after the date the IDTF’s enrollment application was approved.  CMS is now proposing a more lenient requirement.  The proposal provides that the effective date of billing privileges for a newly enrolled IDTF is the later of the filing date of the application or the date the IDTF first furnished services at its location.  The rule provides that the filing date is “the date that the Medicare fee-for-service contractor receives a signed provider enrollment application that [it] is able to process for approval.”  Therefore, should this change become effective, an IDTF will face the risk that its initial enrollment application will be rejected on a technicality, and that its effective billing date is much later than had been anticipated.  However, CMS has relented on its much more controversial proposal to not allow IDTFs to bill for any services rendered before its enrollment application had been fully processed.
  • Liability Insurance.  CMS has proposed that IDTFs maintain a comprehensive liability insurance policy in the amount of $300,000 per incident (the current rule requires $300,000 per location).  The IDTFs would be required to list the Medicare contractor as a certificate holder on the policy, and to promptly notify the Medicare contractor in writing of any changes to the policy.  The new changes do not preclude IDTFs from using self-insurance, provided that CMS can verify the policy and its coverage provisions with an independent underwriter.
  • Enrollment.  CMS has relaxed its requirement that any changes on an enrollment application be reported within thirty (30) days.  The proposal limits changes that must be reported in such a tight timeframe to changes in ownership, location, general supervision and adverse legal action.  Any other changes can be reported within ninety (90) days.
  • Beneficiary Interactions.  Currently IDTFs are required to answer beneficiaries’ questions and to respond to their complaints.  CMS is proposing to require IDTFs to document the complaint process and maintain the documentation on-site.

CMS will publish later in the year (perhaps in November) a final version of these new rules, after taking into account the comments that will no doubt come flooding in during the comment period, which will end on August 31, 2007 for the IDTF portions of the rule.

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