Kusserow on Compliance: OIG Advisory Opinion okays hospital billing of radiology

The HHS Office of Inspector General (OIG) issued Advisory Opinion No. 15-15 regarding a hospital’s proposal to bill a radiology group. Under the proposed arrangement, the hospital would bill for transcription of the radiology group’s reports as a professional component of a radiology service. The reports are for individuals who are not hospital patients, but patients of a separate third-party clinic providing the technical component of the radiology exams. The clinic bills payors such as Medicare and Medicaid for the technical component of the radiology services, while the radiology practice bills the same payors for the professional component. The requesting entities inquired whether the billing arrangement would constitute grounds for sanctions under the Civil Monetary Penalty (CMP) provisions as they relate to the federal Anti-Kickback Statute (AKS). The OIG responded, noting the following:

  • The clinic and the radiology practice are possible referral sources for the hospital, and the clinic is a referral source for the radiology practice.
  • Absent an express agreement from a third party to be billed for these services, it would be logical for the hospital to bill the radiology practice.
  • The clinic would not pay for any transcription costs that the hospital bills to the radiology practice.
  • The CMS payment rules state that Medicare covers indirect expenses for technical and professional components of radiology exams including transcription costs.
  • CMS has further indicated that when different parties perform the technical and professional components, the parties may determine who pays the transcription costs.

Based upon the above, the OIG determined that remuneration would not pass between the radiology practice and the clinic because: (1) a condition of payment for the professional component of a radiology exam is preparing a written report; and (2) the radiology practice pays for the transcription of its own reports. The OIG concluded that the proposed arrangement would not generate prohibited remuneration under the AKS, and that it would not impose administrative sanctions in connection with the arrangement.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2016 Strategic Management Services, LLC. Published with permission.