Feds ease teleradiology requirements, clearing way for Medicare payments

February 7, 2005

In a move likely to help teleradiology services and the companies that provide their equipment, the Centers for Medicare and Medicaid Services will soon implement a policy that permanently relaxes billing requirements for offsite readers. The shift, which is expected to take place by April, could create business opportunities for teleradiology and nighttime interpretation companies, as well as for hospitals and radiology groups across the nation.

In a move likely to help teleradiology services and the companies that provide their equipment, the Centers for Medicare and Medicaid Services will soon implement a policy that permanently relaxes billing requirements for offsite readers. The shift, which is expected to take place by April, could create business opportunities for teleradiology and nighttime interpretation companies, as well as for hospitals and radiology groups across the nation.

The new CMS rules will allow physicians to bill their local Medicare carriers globally for diagnostic interpretation services, even when radiologists in another state perform the professional component of the study. CMS previously required healthcare providers to bill the Medicare carrier in the same state as the interpretation of a study.

The shift in Medicare reimbursement policy will eliminate the biggest obstacle to interstate teleradiology interpretations, said lawyer Thomas W. Greeson, a partner in the healthcare group of Reed Smith LLP in Falls Church, VA.

"It is also a positive move in the direction of a much more efficient billing process," Greeson said.

With the change, teleradiology companies might expand their ability to provide these services. Nighttime services, which typically are located in places far from the contracting sites, have been paid mostly for preliminary interpretations that don't involve Medicare payments. This could change under the new policy rules, as nighthawks could be paid by Medicare for providing official reads, Greeson said.

Interstate teleradiology expansion may especially benefit underserved areas in the country. Teleradiology firms currently serve hospitals in areas where radiologists are scarce. The new CMS provisions could prove a boon to those facilities.

"Rural and underserved facilities would get access to people with subspecialty training whom they normally wouldn't have access to," said Dr. Eric T. Trefelner, president of Nightshift Radiology in Montara, CA.

Outside competition may upset imaging groups that serve hospitals and imaging centers in their own communities, however. Even though the new rules pertain specifically to U.S.-based radiology, many U.S. radiologists fear that these policies, coupled with ongoing lobbying for more aggressive outsourcing in areas unrelated to healthcare, may allow unfair competition from radiologists abroad.

"This is the thin edge of the wedge," Trefelner said.

The new rules do not apply to all, however. Healthcare providers who must comply with the self-referral prohibitions in the Stark laws will still have to contract locally with radiologists who are required to perform their services on the premises.