New Performance Standards for Independent Diagnostic Facility Settings

Because of findings by the Office of the Inspector General that a possible $71 million in improper payments may have been made to independent diagnostic testing facilities (IDTFs), and reports by Medicare contractors that identified IDTFs in California and other states as trying to defraud the Medicare program, new performance standards for IDTFs have been implemented. The new performance standards and requirements were effective January 1, 2007, and are published in the Code of Federal Regulations 42 CFR §410.33 (Electronic Code of Federal Regulations). Revisions have been made to: (1) the application certification standard, (2) the supervising physician and multistate entities requirements, and (3) the consequences of failure to meet standards sections.

CMS has outlined 14 performance standards and requirements for IDTFs that will be used by new or reenrolling IDTFs. These performance standards regulate the application of the IDTFs to earn billing privileges. The enrollment requirements are as follows:

 1.   Operate the IDTF business in compliance with all applicable licensure and regulatory requirements.
 2.   Provide complete and accurate information on the IDTF enrollment application.
 3.   Maintain a physical facility on an appropriate site. A post office box or commercial mailbox is not regarded as a physician facility.
 4.   Have all applicable diagnostic testing equipment available at the physical site, except portable diagnostic testing equipment.
 5.   Maintain a primary business phone number under the name of business and is located at the designated site of the business.
 6.   Have a comprehensive liability insurance policy of at least $300,000 per fixed location or mobile vehicle.
 7.   Agree not to directly solicit patients. 
 8.   Answer beneficiaries' questions and respond to their complaints.
 9.   Openly post these standards for review by patients and the public.
10.  Disclose to the government any person having ownership, financial, or control interest or any other legal interest in the IDTF.
11.  Have testing equipment calibrated and maintained per manufacturer's suggested maintenance and calibration standards.
12.  Have technical staff on duty with the appropriate credentials to perform tests.
13.  Have proper medical record storage and the ability to retrieve medical records upon request from CMS or its fee-for-service contractor within 2 business days.
14.  Permit CMS or its agents and contractors to conduct unannounced on-site inspections within regular business hours. The site must maintain a visible sign posting its normal business hours.

Of note, a supervising physician will be limited to providing supervision to no more than three IDTF sites (42 CFR §410.33 (b)(1)). The limitation of three IDTF sites applies to the supervising physician named on the enrollment application (CMS-855 B, Attachment 2, Section E) who is responsible for the proper administration of an IDTF. It does not pertain to the physician supervising the interpretation of a diagnostic test.1 CMS has instituted this limitation to ensure quality of patient care.

An IDTF must be able to provide evidence that its supervising physicians and technologists are licensed in each of the states that the IDTF operates. In addition, the IDTF needs to be in compliance with all federal, state, and local licensure and regulatory requirements in order to ensure safety of the patients.

The new regulation states that an IDTF cannot solicit patients directly through any type of communication (eg, in-person, telephone, or computer). An IDTF can only accept patients referred to the IDTF by the treating physician for a specific medical problem and who uses the results in the management of the beneficiary's specific medical problem. This does not preclude the IDTF from public advertisement or marketing its services to physicians and other suppliers.2 For example, IDTFs may use television, radio, or internet advertisements; mass mailing: or similar efforts to attract potential clients.

IDTFs must disclose to the government, any person having ownership, financial or control interest, or any other legal interest in the IDTF at the time of enrollment or within 30 days of a change.

If an IDTF fails to meet one or more of the application standards at the time of enrollment, CMS will deny the application. If the IDTF fails to meet the supervising physician or the multistate entities requirements, CMS will revoke the billing privilege of the IDTF.

Although the ACR commented on the proposed rule which discussed the new IDTF standards, Transmittal #187 (CR5449 released on January 26, 2007 and then retracted) contained additional instruction not mentioned in the rule. The additional language that was incorporated in this transmittal includes the following points.

Sharing of space and leasing arrangements
Banning retroactive billing while the IDTF waits for its approval from Medicare
Requirement to only use full time W-2 radiology technologists to provide the image study
While CMS has rescinded CR5449, IDTFs must still meet the performance standards as outlined in the Final Rule and codified in the Code of Federal Regulations. Therefore, it is important that all IDTF sites be familiar with these requirements.

CMS has asked that anyone interested in commenting on the IDTF standards and requirements submit their comments to CMS in writing. CMS has not decided, at this time, whether it will issue further guidance in regulations or through a transmittal. The ACR is following this issue closely and will provide updates on the ACR Web site.

1 Federal Register, Vol. 71, No. 231/Friday, December 1, 2006/Rules and Regulations, p.69700.

2 Federal Register, Vol. 71, No. 231/Friday, December 1, 2006/Rules and Regulations, p.69696.

IDTF Performance Standards 

Pub. 100-08 Medicare Program Integrity, Transmittal 187, CR5449 January 26, 2007                                                           
Implementation of New Compliance Standards of Independent Diagnostic Testing Facilities

Medicare Program Integrity Manual, Chapter 10, Section 4.19 

Electronic Code of Federal Regulation, 42 CFR §410.33

Enrollment Application

Enrollment Frequently Asked Questions