Teleradiology opens some doors, closes others

September 22, 2005
Thomas W. Greeson

Advances in electronic image transmission have the potential to change the face of radiology. Using technology supported by PACS and radiology information systems, interpreting radiologists can provide timely services to multiple facilities while practicing "virtually" from almost any location. This capability has allowed entry of international teleradiology into the U.S. market, and it has opened the door to increased competition for interpretation contracts, even across state lines.

Advances in electronic image transmission have the potential to change the face of radiology. Using technology supported by PACS and radiology information systems, interpreting radiologists can provide timely services to multiple facilities while practicing "virtually" from almost any location. This capability has allowed entry of international teleradiology into the U.S. market, and it has opened the door to increased competition for interpretation contracts, even across state lines.

Those who wish to take advantage of these opportunities, however, must thread their way through a thicket of legal and regulatory issues, including state licensure and Medicare reimbursement and billing rules. Supervision requirements appear to put independent diagnostic testing facilities (IDTFs) at a disadvantage, particularly when compared with radiology group/hospital imaging center joint ventures. While liberalization of some rules has helped promote out-of-state teleradiology contracting, other rules remain in force that compel imaging centers, especially those enrolled in Medicare as IDTFs, to meet stringent requirements while nevertheless permitting offsite image interpretation.

- Licensure. Most states require physicians who regularly provide physician services to state residents, even if electronically from another state, to obtain state medical licenses with the local board of medicine. Some telemedicine advocacy groups are working to remove state licensing requirements, but most medical boards view the radiologist who interprets images from outside the state to have traveled electronically into the state and thus to be subject to the patient's state licensing laws.

How long the multistate licensure requirement will be in place is unknown, but I don't see it going away any time soon. Although bureaucratic and cumbersome, state licensure has not actually proven to be a significant barrier to interstate teleradiology. Today scores of radiologists hold licenses in dozens of states.

- Reimbursement and billing. Medicare, under its "telehealth" coverage rules, has special provisions for the performance and payment of medical service provided via electronic means. There is limited Medicare coverage for certain physician consultations via interactive videoconferencing. These limitations largely do not apply to radiology services, which are paid under the Medicare physician fee schedule, even if provided via teleradiology.

But meeting the coverage requirements is only part of the answer. The Centers for Medicare and Medicaid Services considers the location of the site of service to be the location where the professional service was provided. Medicare law prohibits payment for items and services furnished outside the U.S., except for certain limited services in Canada or Mexico.

- Reassignment. Section 952 of the Medicare Modernization Act did away with many of the restrictions on reassignment of benefits. CMS has advised carriers that it will pay a person, group, or facility enrolled in the Medicare program for services provided by a physician under contract, regardless of where the service is furnished. Thus, the service may be furnished on or off the premises of the entity submitting the bill. This is a big change that opens the door to the use of remote electronic interpretation services.

- Stark rules. CMS advises a physician who orders a diagnostic test that is interpreted by a contract radiologist to have the interpretation provided at the group practice's facility, so the group practice can refer and bill for the professional services. Thus, even though the reassignment rules now permit services to be furnished off the premises of the entity submitting the bill, the parties to the agreement must still comply with the Stark rules.

In the 2005 Medicare Physician Fee Schedule Rules, CMS reminded referring physicians that compliance with the physician's services exception and the in-office ancillary services exception to the physician self-referral prohibition requires that an independent contractor physician (what the Stark rules refer to as "a physician in the group practice") must provide services to the group practice's patients physically at the group's facilities. Stark's definition of a "physician in the group practice" means an independent contractor physician, such as a radiologist who is under contract to provide services to the group practice's patients in the group practice's facilities. Thus, the rationale for the onsite requirement.

The Stark onsite requirements, particularly for small contracts where it is not economically feasible for a radiologist to read onsite, may make separate billing of Medicare services the best way to proceed.

- "Purchased interpretations." Imaging centers that provide technical component diagnostic testing may now contract with radiologists-regardless of where they are located in the U.S.-to provide interpretations of these tests, provided the radiologist does not see the patient and provided the tests are not initiated by the physician or entity performing the technical component of the test. Interpretation services are paid under the Medicare physician fee schedule and are subject to the same payment rules as all other services paid under the fee schedule. Imaging centers that submit claims to the carrier for purchased interpretations need only provide the ZIP code of the location where the interpretation service was rendered. Thus, an IDTF can contract and bill for radiologists' services from anywhere within the U.S., provided the interpreting physicians comply with the transmitting state's licensure requirements and have made arrangements for professional liability coverage. These facilities, however, do face one considerable obstacle to a totally virtual arrangement: compliance with Medicare's supervision rules.

- Supervision requirements. Medicare billing rules for diagnostic tests generally require that they be performed under the supervision of a licensed physician. Most tests can be performed under "general" supervision; that is, the physician need not be at the facility when the test is performed, but a supervising physician is responsible for the overall quality of the images performed at that facility. He or she should interact with the technologists, participate in monitoring the equipment, and otherwise be responsible for quality matters.

Certain procedures such as MR or CT with contrast require "direct" supervision. For those procedures, the supervising physician need not be in the same room when the contrast agent is administered but should be "in the office suite" and available to assist if required. Medicare rules require that the physicians contracted for this purpose by IDTFs must also be "proficient" in the "performance and interpretation" of the tests they supervise. Most carriers interpret the proficiency requirement to obligate use of board-certified radiologists or nuclear medicine physicians to supervise tests performed in IDTFs.

In this respect, CMS has sent mixed messages regarding independent diagnostic testing facilities. CMS allows them to contract with and bill for interpreting physicians from anywhere in the U.S. but also imposes on IDTFs more rigorous requirements for supervision than it does for physician groups or, ironically, even for hospitals. An IDTF that contracts with an out-of-state group to interpret its images thus faces the difficult task of persuading local radiologists to take on supervision-only duties. For the nominal pay offered to compensate supervising radiologists for the significant responsibilities-and liability-that can arise from supervision duties, many local radiologists are reluctant to assume these responsibilities.

- Onsite presence and Medicare requirements. Radiologists who own stakes in imaging centers usually take steps to staff them in a way that assures that most studies can be interpreted onsite. For Medicare purposes, onsite reads represent one of the major strategies that can help an imaging center with radiologist ownership escape IDTF enrollment status. Because it is not productive to leave a radiologist at an imaging center all day not being fully utilized, steps should be taken to permit that radiologist to read images from other locations such as the hospitals where the group practices. Agreements can be drawn up to allow offsite reads from the hospital while the radiologist is onsite at the radiology group/hospital joint ventured imaging center. Under such an arrangement, radiologists at the imaging center are authorized to receive electronically transmitted digital images from the hospital and to access those digital images through the hospital's PACS/RIS. To make this networking possible under federal privacy rules, the hospital, the joint venture, and the radiology group must address the privacy and security issue associated with two unrelated entities sharing protected health information.

Without question, technology is making virtual radiology more of a reality. While some regulatory changes are opening the door to national teleradiology practices, requirements such as onsite interpretation and onsite supervision by only "proficient" physicians remain barriers-perhaps appropriately so-to a truly virtual national practice of teleradiology.

Mr. Greeson is a partner in the healthcare group of Reed Smith LLP in Falls Church, VA. He can be reached at 703/641-4242 or tgreeson@reedsmith.com.

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