Inspector general targets ER imaging payment rates

The risks for individual imaging services are low, but radiologists should not be surprised by a visit from a representative of Medicare’s inspector general’s office to investigate the medical necessity of emergency room scans or their imaging center billing patterns.

These two issues will come under review as part of the OIG's fiscal year 2010 work plan.

Every year the Department of Health and Human Services OIG lists healthcare arrangements it believes cost too much or could violate federal fraud and abuse laws. An investigation into the appropriateness of payments for x-rays performed in emergency departments is part of the 2010 review.

OIG will also look at whether Medicare Part B payments reflect the actual expenses incurred by physicians and whether the utilization rate reflects current industry practices.

The Radiology Business Manage-ment Association recently published a study confirming actual equipment utilization is 54%, which is below the 75% called for in healthcare reform legislation from the House of Representatives and the 65% rate in the reform package voted out of the Senate Finance Committee in mid-October.

Other projects include an ongoing examination of services and billing patterns in locations with a high density of independent diagnostic testing facilities.

The American College of Radiology advised members who render patient care in the areas listed in the work plan that they should not expect an immediate knock on their office door from the OIG. But radiologists and their business managers should properly document the medical necessity of individual scans and properly code billings for Medicare and Medicaid services.

For selected imaging services, the OIG will focus on the practice expense components, including the equipment utilization rate. It will determine whether Medicare payment reflects the actual expenses incurred and whether the utilization rate reflects current industry practices.

Under “Payments for Diagnostic X Rays in Hospital Emergency Depart-ments,” the plan calls for review of a sample of paid Medicare Part B claims and medical records for diagnostic x-rays performed in hospital emergency departments in order to determine the appropriateness of payments.

The Medicare Payment Advisory Commission (MedPAC), in its March 2005 testimony before Congress, reported concerns regarding the increasing cost of imaging services for Medicare beneficiaries and potential overuse of diagnostic imaging services. In 2007, Medicare reimbursed physicians approximately $207 million for imaging interpretations performed in emergency departments. The OIG plans to determine the appropriateness of payments for diagnostic x-rays and interpretations.