CMS makes it specific: You can't send images to India

June 1, 2007

Well-paid U.S. radiologists have long worried about foreign competition, particularly from radiologists in India, who U.S. radiologists fear would read images for "pennies on the dollar." Although Indian radiologists have begun international image reading operations, their access to the U.S. market to date has proved to be more mythical than real.

Well-paid U.S. radiologists have long worried about foreign competition, particularly from radiologists in India, who U.S. radiologists fear would read images for "pennies on the dollar." Although Indian radiologists have begun international image reading operations, their access to the U.S. market to date has proved to be more mythical than real. Some images are shipped to India for interpretations, but the volume is probably small, involving commercial and "preliminary" reads. As for Medicare, rules have long barred final interpretations of images beyond U.S. borders.

All these facts didn't stop the Centers for Medicare and Medicaid Services from recognizing the worry and speaking out on it. A recent revision to the Medicare Program Manual contains the following language:

Payment may not be made for a medical service (or a portion of it) that was subcontracted to another provider or supplier located outside the United States. For example, if a radiologist who practices in India analyzes imaging tests that were performed on a beneficiary in the United States, Medicare would not pay the radiologist or the U.S. facility that performed the imaging test for any of the services that were performed by the radiologist in India.

The restriction would also seem to prevent Nighthawk Radiology Services, the dominant U.S. teleradiology firm, from shipping Medicare images to its Sydney and Zurich offices for final official interpretations. Nighthawk, however, has moved aggressively to acquire U.S.-based operations, culminating most recently in its $53 million purchase of the Radlinx Group, the third-largest U.S. teleradiology company.

Radlinx doctors are located solely in the U.S., which "should help alleviate concerns the industry may have about Medicare interpretations being performed outside the U.S.," said Tim Mayleben, Nighthawk executive vice president and chief executive officer, during an April 9 teleconference to discuss the purchase. (For more on this purchase, see the Tech Watch article on page 47 of this issue.)