LEGISLATNE, LEGAL, AND REGULATORY ISSUES

Reimbursement Update: Looking Toward the 1990s

Joseph Kisslo, MD, and Diane S. Millman, JD,' Durham, N.C.

Some Medicare carriers have independendy decided to treat all billings for echocardiographic services as radiologic, whereas others have decided to treat billings from multispecialty practices that include a radiologist as radiologic services. The result is that the radiology fee schedules are being applied, even though the services were not supplied by radiologists. (JAM Soc EcHo 1990;3:154-7.)

The American Society of Echocardiography (ASE) continues to monitor and to interact, when­ever possible, in matters relating to the proper con­duct of echocardiographic procedures and the reim­bursement for such procedures. Several matters have recently come to attention of the Society that should be of interest to members.

RADIOLOGY FEE SCHEDULE

Group Practices

For many years, the American Society of Echocar­diology has contended that echocardiographic pro­cedures are principally conducted and interpreted by cardiologists and therefore are not logically "ra­diologic" procedures. The Physicians' Current Pro­cedural Tenninology (American Medical Association, Chicago, Illinois) describes identical (or nearly iden­tical) echocardiographic services under both the 70000 (radiology) and the 90000 (medicine) series codes.

As a result of Medicare reimbursement changes contained in the Omnibus Budget Reconciliation Act of 1987, the Health Care Financing Administration has established a special radiology fee schedule. The effects of this legislation on Medicare ·reimburse-

From the Department of Medicine, Duke University Medical Center. Reprint requests: Joseph Kisslo, MD, Box 3818, Duke University Medical Center, Durham, NC 27710. 'Ms. Millman is legal counsel for the American Society of Echo­cardiography and is a partner in McDermott, Will & Emery, Washington, DC. 27/l/17976

ment for echocardiographic procedures were previ­ously discussed in the JOURNAL OF THE AMERICAN SOCIETY OF ECHOCARDIOGRAPHY,1 and members were encouraged to use the 90000 series codes (if appropriate) when billing for these procedures.

Continued monitoring ofthis new fee schedule has highlighted certain problem areas. The problems ap­pear to be of two types: ( 1) some Medicare carriers have independently decided to treat all billings as though they have been submitted under the 70000 series codes, even if they have been properly sub­mitted under the 90000 series codes and (2) the same carriers and other carriers have independently de­cided to process billings submitted by multispecialty groups that include a radiologist (who bill under the 90000 series codes) under the radiology fee schedule applicable to the 70000 series codes, even though the procedures were performed and interpreted by nonradiologists. These problems have occurred in Pennsylvania and in other states.

In reference to a specific case in Pennsylvania, the American Society of Echocardiography requested clarification and a ruling from the Health Care Fi­nancing Administration earlier this year. Although a final ruling is still pending, we were recently notified by an official in the Division of Medical Services Payment, Bureau of Policy Development, Health Care Financing Administration, that the carrier was incorrect. The response includes the following (Patashnik BJ. Written communication. August 1989):

... we believe that the situation in question can be resolved based on our carrier guidelines on the schedules (section 5262 of the Medicare Carriers Manual). Section 5262.A.1.a. makes the presump­tion that services billed by a multispecialty clinic are payable under the fee schedules, and section

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5262.A.l.b requires carriers to establish a process under which an entity can rebut this presumption. The instructions go on to require the carrier to determine whether the billed radiological service was rendered or supervised by a physician who meets one of the three criteria specifically cited in the statutory definition of"radiologist services." In the situation in question, there does not seem to be any dispute over the fact that the echocardi­ography services are rendered or supervised by car­diologists who do not fall into any of the three physician categories contained in the definition. Further, the background material indicates that the clinic had been billing for echocardiography services using 90000-series codes for over lO years, and, except for the carrier's internal practice of processing all echocardiography claims under radiological codes, there never would have been any question of applying the fee schedules for ra­diologist services to those services that are fur­nished by cardiologists. The dual nature of the coding for echocardiography services precludes a blanket application of the fee schedules to the ser­vices of a multispecialty clinic. Unfortunately, this communication will not pre­

clude this, or similar, problems from occurring with other Medicare carriers. The American Society of Echocardiography continues to monitor case-by-case situations as they are brought to our attention by the membership of the Society.

Pending 1989 Budget Reconciliation

Near the end of each summer, Congress deliberates and acts on budget reduction legislation. Almost every year, such legislation has an impact on the methods by which the Health Care Financing Ad­ministration regulates Medicare reimbursements for echocardiographic procedures.

This year's budget reconciliation legislation pro­posed by the House contains a proposal with the provision that amounts reimbursed for radiology ser­vices that are not covered by the radiology fee sched­ule "may not exceed" the radiology fee schedule amounts. Thus if ultrasound services continue to be considered "radiology services," according to the proposed provision, reimbursement for these ser­vices would be "capped" by the radiology fee schedule.

The American Society of Echocardiography is concerned about the potential impact of this pend­ing legislation. We are maintaining a dialogue with legislative and other authorities to again clarify that echocardiographic services are, as a general rule, not

Reimbursement update 155

rendered by radiologists. Laws or regulations that affect purely radiologic services are generally imple­mented because of economic, educational, proce­dural, or other factors pertinent to radiologists. In many settings, the same reasoning or rationale may not apply to those with primarily cardiology or med­icine backgrounds. For example, the capital expen­diture for an ultrasound system located in a radiology department may represent only a small portion ofthe overall capital equipment budget. A similar system used for echocardiography but located in a medical department may represent the largest portion of the capital equipment budget for that given department.

Relevant surveys indicate that echocardiographic services are provided by cardiologists and internists in the vast majority of cases. Likewise, the vast ma­jority of equipment used for such services is located in medical departments, not in radiology depart­ments. In matters of education, training, and re­search, it is cardiologists and internists who have established leadership and dominance in the proper clinical use ofechocardiographic and cardiac Doppler procedures.

Given these factors and the marked differences in economic factors that differentiate cardiology (med­icine) from radiology, it is the continued position of the American Society of Echocardiology that echo­cardiography is not, and should not be considered, a "radiologic service." These facts notwithstanding, much confusion has been encountered since the inception of Medicare and has been perpetuated through various amendments to the original law.

For these reasons, the American Society of Echo­cardiography is urging Congress to clarify the budget reconciliation provisions to clarify that echocardi­ography services are not to be considered "radiology" services and that reimbursement is not to be limited to the radiology fee schedule amounts.

PHYSICIAN SELF-REFERRALS

Ethics in Patient Referrals Act

A revised version of the Ethics in Patient Referrals Act, originally proposed by Fortney "Pete" Stark, the subcommittee chairman of the House Ways and Means Committee, has been incorporated into the House Ways and Means Committee budget recon­ciliation package (H.R. 3150). Introduction of the Ethics in Patient Referrals Act was triggered by a report from the office of the Inspector General, De­partment of Health and Human Services, which re­

156 Kisslo and Millman

vealed that some physicians were referring patients for diagnostic testing to laboratories in which the physicians had specific financial interests. Such refer­ral patterns were deemed to constitute a conflict of interest.

The physician self-referral legislation, as modified by the House Ways and Means Committee, includes a "grandfather" clause that would provide limited protection to most existing facilities (as of March 1, 1989), provided no new referring physicians are added. In addition, any new facility that seeks to use physician capital would need to obtain individual approval from the Department ofHealth and Human Services. Approval would be based on the ability of the facility to meet certain access, convenience, and cost criteria. The legislation also exempts such refer­rals within group practices and in certain rural set­tings.

A major problem with the legislation is that it does not cover all specialties or interest groups in which such conflicts of interest may arise. For example, the legislation specifically exempts radiologists and pa­thologists. One possible scenario would be a case in which radiologists provide services in a given hospital with limited facilities and also have a financial interest in an outside laboratory where specialized services, such as magnetic resonance imaging or computed tomographic scanning services, are available. Such scenarios are also possible among pathologists who have an outside interest in laboratories (or proce­dures) in which specialized diagnostic testing is pro­vided. The American Society of Echocardiography contends that no specialty or subspecialty is free from potential self-referral abuses.

Independent Physiologic Testing

The office of Inspector General is currently conclud­ing an investigation of independent physiologic lab­oratories, many ofwhich perform echocardiographic services. Such laboratories are independent in the sense that they are not covered by the normal ac­creditation review process conducted by the Joint Commission for Accreditation ofHealthcare Organ­izations. The investigation of the Inspector General focuses on whether independent physiologic labo­ratories, which may not be state licensed or regulated, should be subject to inspection and utilization as a condition of participation in the Medicare program. The American Society of Echocardiography has met with officials from the office ofthe Inspector General to discuss the advantages and disadvantages of cer­tification for independent physiologic laboratories. The Society is monitoring this issue closely.

Journal of the American Society of

Echocardiography

OTHER MATTERS

Variable Standards for Reimbursement

Various discussions with Medicare carriers and of­ficials at the Health Care Financing Administration regarding reimbursement issues have revealed that indications for echocardiography and Doppler pro­cedures vary widely from state to state. While pro­viding the means to reimburse for necessary proce­dures, carriers are constantly attempting to curtail reimbursement for services that are deemed inappro­priate.

Our experience indicates that there are many prob­lems in this "pay'' or "not pay'' situation. In some instances the physician fails to clearly indicate the clinical necessity for a study in his or her clinical request. For example, a physician may request a crit­ically needed evaluation for a patient with suspected obstructive hypertrophic cardiomyopathy (reimburs­able in some areas). The physician, however, requests the study because of "syncope" or ''weakness" (not reimbursable). The echocardiographic and Doppler study may assist in the establishment of a difficult diagnosis, may result in a radical change in therapy, and may cause a subsequent reduction in patient mor­bidity and cost savings. However, given the lack of thoughtful interaction during the original request, reimbursement may be denied.

Doppler at a Different Time

In some regions, Doppler studies are being denied reimbursement ifthey are performed at the same time as the echocardiographic procedure. We are currently attempting to uncover the rationale for such reim­bursement policies.

Causing a patient to return at a different time, on a different day, for a necessary evaluation only adds to patient annoyance. Such requirements are also likely to increase the cost ofa procedure because they require a repeat in patient preparation that is un­warranted and because they increase the time spent on the review and report preparation process.

CONCLUSION

The American Society of Echocardiography contin­ues to take an active and proactive role in resolving reimbursment disputes on behalfof individual mem­bers and in representing the echocardiographic com­munity on Capitol Hill. The reimbursement and reg­ulation of these services continues to be plagued by

Volume 3 Number 2 March-Aprill990 Reimbursement update 157

historic confusion between echocardiography and ra­ REFERENCEdiology services. The Society continues to work to ensure that health policyrnakers gain a better under­ l. Kisslo J, Millman DS, Michnich ME, Popp R. Changes in

Medicare Reimbursement for Echocardiographic Procedures. standing of the nature and importance of echocar­JAM Soc EcHo 1989;2:75-8. diographic services in the treatment of patients

throughout the country.