For the past twelve years, we represented, designed and provided legal and consulting services for the construction and integration of imaging facilities. We represent stand-alone imaging facilities with offices throughout the Metropolitan area, imaging facilities contained within medical arts buildings, independent diagnostic testing facilities that service clinical offices, skilled nursing facilities and mobile imaging practices.
While each enterprise is specific to the business model, client base, patient base and service to be provided, we rarely find a circumstance where we cannot find a legally compliant business model that can be used by the practice. Exploring the manner in which the fraud and abuse statutes impact the scope of a compliant business model is a big part of our job when a client comes to us to expand or commence any type of testing or designated health service.
However, it is sometimes important to think outside the box with some of these arrangements while simultaneously seeking a hypothetical and confidentiality-protected advisory opinion service from the Office of Inspector General at CMS. We have encountered multiple instances when a business model would theoretically violate some aspect of the Stark or Antikickback laws, but when presented on behalf of a confidential and anonymous client to the regulators at CMS, they have conceded that the essence and spirit of these fraud and abuse prohibitions is preserved by the business model. As such, while a technical violation is declared in the hypothetical, they also provide insurance that no action or recrimination will be sought if such a business model was actually deployed.
CMS is not as rigid or monolithic as one might be led to believe. Indeed, they themselves are interested in alternative mechanisms to prevent fraud and abuse. There are times when it can be demonstrated that moving certain parameters in our favor to create a viable business model under the circumstance, can nevertheless satisfy safe harbor or self referral prohibition interests with equal effectiveness. Here, we are sensitive to future business model maintenance that may seem desirable to our clients. If they, in any way, alter the underpinnings of the deal from a compliance point of view, then we prudently revisit the business model with CMS prior to making the change.
The IDTF is one of those rare cases where an unlicensed individual can operate a segment of the health care delivery system. While states typically take no position on the services provided through an IDTF entity, the federal government allows for many different types of technical services provided by companies that are owned by unlicensed professionals, so long as they limit the scope of their business to the delivery of technical testing services that only require certification or registration from a national credentialing organization. Mobile sonography, ultrasound, Doppler testing, duplex scan testing, functional capacity testing, certain EMG and NCV testing can be reimbursed by the Medicare program upon approval of the 855R and site inspection.
Mobile services can be provided through any number of arrangements, including the sublet of space at fair market value and in compliance with all of the other safe harbor requirements of the antikickback laws. There are multiple structural safeguards that must be put in place in order for an IDTF to properly function as a mobile unit, and our practice is resolute about educating and reinforcing compliance with our clients and each of their employees.
Recently, regulators at CMS considered imposing an IDTF registration and compliance requirements on every radiology practice which operates its practice using portable equipment at office sites that are not part of the primary radiology practice premises. Fortunately, this requirement was reevaluated and withdrawn prior to enactment of the 2011 Physician Fee Schedule.
A substantial financial motivation for a non-radiology practice to provide in-house diagnostic testing was found in the difference between the amount that would be reimbursed for Medicare and the fee to be paid to a radiologist under agreement for delivery of the test's professional component. CMS has effectively removed some of that incentive by invoking what is known as the "Anti-Markup Rule." The purpose of this rule is to essentially deincentivize the purchase of testing services from another specialist, unless the test is performed by somebody who is closely bound to a practice and provides at least 75% of his or her professional services as a member of the practice. Here, CMS acknowledges that an individual may not be completely tied to any one practice and may provide services on a more modest basis to one or two other practices outside of the main practice where he or she works. As such, 75%of the time a physician needs to be delivering services through the practice that is billing for the service and referring the patient for the test. CMS takes no position on what that physician does for the other 25 percent of his or her patient care services.
Alternatively, the Anti-Markup Rule does not apply when the "Site of Service" for a test is the same building where the billing physician maintains an office and provides his regular complement of patient care services, provided that the technical component and the professional component are performed within that building. In this instance, (i) the physician performing the test can be an employee or independent contractor of the physician or practice that has ordered and will bill for the test, and (ii) the physician performing the test must perform the technical and professional components of the test in the "office" of the billing physician. The definition of the word "office" is extremely important to note as including any medical office space where the ordering physician regularly furnishes his patient care including any building where the ordering physician maintains a practice and delivers his usual and customary complement of patient care services.
The Anti-Markup Rule is intended to remove the profit motivation from the test, and as such, the regulators, of course, purport to reduce unnecessary testing. Under the rule, Medicare will pay the lesser of the performing physician's actual charge to the billing physician, the billing physician’s actual charge or as prescribed under the Medicare fee schedule. If the Anti-Markup Rule is triggered, the billing physician does not have the ability to pass on any of the specific or general overhead costs associated with providing facilities or infrastructure to enable the test. No portion of the equipment, staff or space utilization can be included in the charge to Medicare. As such, the regulation is an effective means of reducing the attraction of certain mobile and/or joint venture possibilities.