Enrollment of Independent Diagnostic Testing Facilities (IDTFs)

Program Memorandum (Carriers), HCFA Pub. 60B, Transmittal No. O98-45, Nov. 1, 1998. Medicare: Private Contracts

Part B payments¬Physician fee schedule Private physician contracts.¬A new regulation (42 CFR 410.33) establishes that for diagnostic procedures performed on and after July 1, 1998, payment will be made only where the services are performed by a physician, physician group, an approved supplier of portable X-ray services, or an independent diagnostic testing facility (IDTF). The qualifying criteria that an IDTF must meet are also specified in the regulation. The regulation eventually eliminates the category of Independent Physician Laboratory. Because of administrative problems that have delayed implementation of the regulation, HCFA will not enforce the denial of payment provision for diagnostic procedures otherwise in compliance, if performed before January 15, 1999.

Text of Transmittal

SUBJECT: ENROLLMENT OF INDEPENDENT DIAGNOSTIC TESTING FACILITIES (IDTFs)

A new regulation (42 CFR § 410.33) entitled, "independent diagnostic testing facility," was published in the Federal Register on Friday October 31, 1997, on page numbers 59099 and 59100. This regulation establishes that for diagnostic procedures performed on or after July 1, 1998, payment will be made only where the service is performed by a physician, a physician group, an approved supplier of portable x-ray services, or an IDTF, except in the case of certain specified exceptions. Detailed criteria that an IDTF must meet are specified in the regulation. This regulation will eventually eliminate the provider category of Independent Physiological Laboratory (IPL), since an IPL is not granted an exception for billing of diagnostic procedures beyond the specified implementation date. This regulation has generated many enrollment questions concerning enrollment of IDTFs and IPLs.

This Program Memorandum (PM) advises carriers how to process new enrollment applications and voluntary conversions to IDTF status as well as addressing certain specialty code and billing issues for IPLs and IDTFs. In the future, a second PM will be issued on how to ensure that enrolled IPLs and IDTFs are in compliance with all aspects of the regulations. It will also provide further instructions on procedures to be used with IPLs who do not voluntarily convert to IDTFs.

We are currently reviewing the supervision level requirements for specific diagnostic tests. We expect changes to those already published. We do not currently have a national policy regarding credentialling of IDTF personnel. Therefore, at the current time, each carrier should use their own knowledge and judgement in this area.

IMPLEMENTATION DATE

The current regulation cites a date of July 1 1998, as the first date that an IPL could no longer receive payment for diagnostic tests. Due to administrative problems concerning implementation of the regulation, we are not enforcing this provision until January 15, 1999. Therefore, entities enrolled as and only meeting the regulation standards for an IPL, or other provider type, can continue to bill for IPL allowed, or other provider type allowed, diagnostic procedures performed before January 15, 1999. Claims for diagnostic testing services performed as of Jan. 15, 1999, shall be rejected unless the provider meets the requirements specified in 42 CFR §410.33. This requires rejection of IPL claims and permits acceptance of IDTF claims.

Providers may desire to become an IDTF as soon as possible based upon the difference in coverage rules between an IDTF and an IPL. The regulation establishes the category of IDTF as of January 1, 1998. This date has not been extended. Therefore, providers can be enrolled and paid as an IDTF as of January 1, 1998. Payments as an IDTF for any period between January 1, 1998 and the date that an IPL converts its enrollment to an IDTF are allowable. However, the carrier may request and review information from the IDTF that it actually was functioning as an IDTF for any retroactive period. Payments as an IDTF for the retroactive period shall be made under IDTF rules, unless in the judgement of the carrier the current IDTF was clearly not functioning as an IDTF for the retroactive period.

INITIAL ENROLLMENT OF IDTFs NEWLY ENROLLING ENTITIES

An entity applying to become an IDTF shall submit a completed January 1998 version of Form HCFA-855. The IDTF applicant shall report the type of facility (see page 1 of the General Application, section 1, "Applicant Identification," block B. "Organizations ONLY," line 3) as a laboratory or IDTF and they shall complete the ATTACHMENT 2 section for an IDTF. The carrier should review the application in accordance with the carrier manual review/validation procedures cited in Medicare Carriers Manual, Part 4, § 1030.

An IDTF applicant may cite that they cannot currently meet the IDTF credentialling criteria, especially for technicians. In particular, they may advise that the technician has met the educational requirements but has not yet passed the test, since the test is only scheduled periodically. Carefully evaluate the given reason for not meeting a criterion. If the reason makes sense based upon your knowledge and any explanations and/or documentation submitted by the applicant, the applicant should be enrolled as an IDTF. However, the carrier must later follow up with the applicant, no later than three months after the applicant should have submitted evidence of clearing up the exception. An example would be if a technician meeting the educational requirements can first take a test in October. The applicant should submit documentation that the technician passed the test shortly after October. The carrier should follow up with the applicant no later than January, if the applicant has not yet provided passing test results.

An enrolled IDTF may immediately bill for diagnostic services as an IDTF. They do not have to wait until January 15, 1999.

ENROLLMENT AS AN IPL FOR APPLICANTS WHO HAVE ALREADY SUBMITTED A FORM HCFA-855

Upon receipt of this program memorandum carriers shall no longer accept new Form HCFA-855 applications for enrollment as an IPL. However, carriers may continue to process and enroll IPL applications which they have already received and are in the process of reviewing. Carriers shall advise those applicants that for diagnostic services performed on and after January 15, 1999, IPL claims will be rejected. You may also advise the IPL of the ability to enroll as an IDTF if a credentialling issue will be corrected by the entity. This shall be performed in accordance with the guidance shown in the second paragraph of the section of this program memorandum entitled, INITIAL ENROLLMENT OF IDTFs - NEWLY ENROLLING ENTITIES. However, if the applicant still desires to be enrolled as an IPL (e.g., they cannot meet some other regulation requirement at the time of enrollment), they can still be enrolled as an IPL through Jan. 14, 1999, subject to passing the enrollment review protocol in the carrier manual.

SUPERVISING PHYSICIANS FOR AN IDTF OR AN IPL

42 CFR §410.33, paragraph (b)(1) cites that an IDTF must have one or more supervising physicians who are responsible for the direct and ongoing oversight of the quality of the testing performed, the proper operation and calibration of equipment used to perform tests, and the qualification of nonphysician personnel who use the equipment. Each supervising physician, who must be enrolled with Medicare, does not have to be responsible for all of these functions. One supervising physician could be responsible for operation and calibration while other physicians are responsible for the test supervision and assuring qualifications of the nonphysician personnel. The basic requirement is that all the supervisory physician functions be properly met at each location, regardless of the number of physicians involved. This is particularly applicable to mobile IDTF units who are allowed to use different supervisory physicians at differing locations. They may have a different physician supervise the test at each location. The physicians used have to meet only the proficiency standards for the tests they are supervising. Supervisory physicians do not have to be employees of the IDTF. They can be contracted physicians for each location serviced by an IDTF. In some instances, IDTFs may have a problem concerning violation of the prohibition on physician referral laws (Stark Laws) in the use of a contracted physician who is also a physician of the patient. However, most diagnostic tests, with the notable exception of radiological tests, are not under the purview of the Stark Law prohibition. Carriers should not provide the applicant/enrollee with Stark Law opinions. They will have to make their own judgements, preferably based upon the opinion of their own attorney. We will not question the Stark Law implications of an applicant/enrollee decision to use specific physicians unless there is an obvious violation of the Stark Law. That is, we will not routinely investigate or review these applicant/enrollee decisions. All supervisory physicians shall be reported on Attachment 2 of Form HCFA-855. When an IDTF adds a new supervisory physician they shall be reported on Form HCFA-855 within 30 days (this is the same time period for all required changed information). However, the supervisory physician is still required to meet the regulation requirements at the time the test(s) was performed.

Note: The supervisory physician for the IDTF, whether or not for a mobile unit, may not order tests to be performed by the IDTF, unless the supervising physician in question had a relationship with the beneficiary prior to the performance of the testing and is treating the beneficiary for a specific medical problem.

CONVERSION OF ALREADY ENROLLED ENTITIES WHO REQUIRE IDTF STATUS

Carriers shall expeditiously review their provider files to identify all IPLs and other provider types that need to obtain IDTF status to continue to bill for diagnostic tests. These providers should be advised by letter of the need to obtain IDTF status to bill for diagnostic tests performed as of Jan. 15, 1999. They shall be provided a Form HCFA-855 for submission for IDTF provider status and advised that claims requiring IDTF status may be rejected, if the Form HCFA-855 completed for an IDTF is not received by the carrier by Dec. 1, 1998. Carriers shall review the Form HCFA-855 submitted by these applicants on a priority basis. Processing of these applications on a priority basis may result in delays in processing other applications. This may be considered an extenuating circumstance, if the processing of the other applications is substantially delayed. If final processing of any IPL to IDTF application (including those received after Dec. 1, 1998) is delayed beyond 45 days after your receipt (due to incomplete applicant submission or carrier workload constraints), then after the 45 day waiting period, permit a temporary exemption for IDTF billings, prior to the determination if the applicant shall be approved or denied. This is applicable only when the applicant has signed the block 18, Certification Statement, of Form HCFA-855. If there is an extended delay in approval or denial caused by the applicant, then the carrier shall give resolution of the Form HCFA-855 top priority. If there continue to be problems in resolution, then the carrier shall contact HCFA regional office. Actual approval or denial of the applicant shall be determined by following the carrier manual procedures (see Medicare Carriers Manual, Part 4, § 1030) and the procedures cited in the above section, INITIAL ENROLLMENT OF IDTFs - NEWLY ENROLLING ENTITIES.

NOTE: The temporary exemption provision cited above for an IPL converting to become an IDTF does not apply to a new entity applying to become an IDTF.

Claims for diagnostic services performed as of Jan. 15, 1999, which require IDTF status for proper payment, shall be rejected if the provider does not have IDTF status or has not been granted a temporary exemption pending final processing of its application. The claim disposition status for rejected claims shall be considered as a "Return as Unprocessable" in accordance with Medicare Carrier Manual, Part 3, § 3005, which will be updated to include this provision.

Carriers are authorized to publish details of the above procedures in their provider bulletins. In particular you should emphasize the need to be enrolled as an IDTF to receive payment for diagnostic tests that require IDTF status and are performed as of Jan. 15, 1999.

SPECIALTY CODING, PROVIDER NUMBERS, PAYMENT AND REPORTING REQUIREMENTS

To implement the claims rejection requirements of this PM, carriers are required to distinguish between an IPL and an IDTF. The preferred method of doing this is through use of a separate code for IDTFs. Therefore, we are assigning the specialty code 47 for use only by IDTFs. Carriers whose systems can accept the specialty code 47 for claims processing, without a systems change, are authorized to use code 47 as soon as possible. However, to the extent that use of the specialty code 47 for claims processing requires systems changes, we are not requiring use of the new specialty code at this time. In the future, we shall advise all carriers of the required implementation of the new specialty code based upon a prioritization of other programming efforts. The registry for Unique Physician Identification Numbers accepts the new specialty code as of October 1, 1998.

Carriers whose systems require a systems change to accommodate the use of a separate code 47 for IDTFs shall initially implement the rejection of improper IPL submitted claims through use of the following procedure. These carriers shall promptly review their provider files on an individual provider basis and implement procedures to assure rejection of provider claims that require IDTF status but have not obtained that status as of Jan. 15, 1999. The providers who have obtained IDTF provider status can be paid under the current specialty code 95. Once the code 47 is available, all IDTF billing shall promptly stop using code 95 and use code 47.

The following applies to all carriers. IPLs converting to an IDTF status can be given a new provider number as soon as code 47 is available for their billing. This is optional and dependent upon the carrier's system and procedures. The notification of the new provider number can be made separately of the letter notification that they have been converted to an IDTF, if code 47 is not available at the time an IDTF notification letter is sent. We shall continue use of code 95, the IPL code, for all providers who remain in a status as an IPL (they have not successfully submitted an application to obtain conversion to an IDTF).

For any reporting requirements, and in particular for those submitted via the Contractor Reporting of Operational and Workload Data (CROWD) system, carriers shall include IDTF data on the IPL line if it is possible to do so without making systems changes. If systems changes are not possible, carriers are waived, until further notice, from reporting the IDTF data to the CROWD system.

These instructions should be implemented within your current operating budget.

NOTE: This Program Memorandum may be discarded after October 1, 1999.

Contact Person for this Program Memorandum is Barry Bromberg (410) 78S9953.