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By Adrienne Dresevic, Esq. and Carey F. Kalmowitz, Esq.
January 2011–On November 22, 2010, the US Department of Health and Human Services (HHS) Departmental Appeals Board (DAB) issued a final decision concerning an independent diagnostic testing facility’s (IDTF) billing privileges, which clarifies industry confusion regarding (1) the definition of a mobile IDTF; (2) what constitutes “sharing a practice location;” and (3) leasing/subleasing relationships between fixed-based IDTFs and other Medicare-enrolled individuals or organizations.
By way of brief background, 42 CFR 410.33(g)(15) (henceforth referred to as Subsection 15) provides that, with the exception of hospital-based and mobile IDTFs, a fixed-base IDTF is prohibited from the following: sharing a practice location with another Medicare-enrolled individual or organization; leasing or subleasing its operations or its practice location to another Medicare-enrolled individual or organization; or sharing diagnostic testing equipment used in the initial diagnostic test with another Medicare-enrolled individual or organization.
The initial question of whether an IDTF is fixed or mobile has not been answered in the statutes, regulations, or in the Centers for Medicare and Medicaid Services (CMS) provider manuals. The regulations merely provide that an IDTF, “may be a fixed location, a mobile entity, or an individual nonphysician practitioner.” Moreover, there are references to a “mobile IDTF” and a “fixed-base IDTF;” however, there is no definition of a “fixed location” or a “mobile entity.” Even though the terms have not been defined, the differences and requirements have very different and significant implications, as a failure to meet the requirements of Subsection 15 is a basis for revoking the IDTF’s Medicare billing privileges. Until this recent decision, there was much confusion and ambiguity surrounding these issues.
Mobile IDTF
The first issue before the DAB was to discern the definition of a mobile IDTF. The DAB first examined the difference between a fixed-based and mobile IDTF stating, “a mobile or fixed-base IDTF depends on the manner in which it [is] delivering IDTF service . . .” Notably, the DAB relied on CMS’ preamble comments to 42 CFR 410.33 in the November 27, 2007 Federal Register, in which a commenter asked for clarification on the difference between the IDTF models. CMS responded that a “fixed base IDTF performs all of its diagnostic testing at the practice location found on the Medicare enrollment application (CMS–855), whereas a mobile IDTF travels and performs its diagnostic tests at locations other than a single practice location.” Thus, while CMS’ comment provides that a fixed IDTF only performs at a single location, what still remained unclear was the definition of “mobile.” Simply put, did “mobile” mean the equipment was mobile or that the entire IDTF itself was mobile? The DAB determined it was both in concluding that there are two types of mobile IDTFs: portable units and mobile facilities/units.
Relying on the CMS-855B, the DAB distinguished the two types of mobile IDTFs. A portable unit mobile IDTF involves the transportation of equipment to different fixed locations for diagnostic testing. A mobile facility/unit is one that is a converted, equipped, and licensed mobile home, trailer, or other large vehicle that travels to a location for the treatment of patients inside the vehicle. The CMS-855B provides that the most common types of mobile facilities/portable units are IDTFs, portable x-ray suppliers, portable mammography, and mobile clinics. Thus, mobile IDTFS include both portable units and mobile units/facilities.
Sharing Practice Locations
The next issue before the DAB was to determine whether sharing common areas, hallways, and reception areas constitutes sharing of practice locations, which would be a violation of Subsection 15(i) for fixed-based IDTFs. CMS’ commentary in the November 27, 2007 Federal Register was significant in influencing the DAB’s decision. Most notably, CMS responded to a commenter, “We do not believe that it is appropriate to co-locate a multi-specialty clinic in the same practice location as an IDTF. Specifically, while we are not prohibiting the sharing common of hallways, parking, or common areas, we believe that a multi-specialty clinic cannot occupy or be co-located within the same practice location. For example, a multi-specialty clinic and an IDTF could not enroll or remain enrolled using the same suite number within the same office building.” The DAB used this guidance in distinguishing clinical and non-clinical space. Sharing common space, such as reception and waiting areas, is permissible as it is not clinical space and thus does not constitute “sharing practice locations.” However, it must be emphasized that fixed-based IDTFs sharing of clinical space, such as sharing the same suite in an office building or sharing diagnostic testing equipment, with another Medicare-enrolled individual or organization continues to be prohibited.
Leasing From Another Medicare-Enrolled Individual or Organization
The final issue the DAB examined was whether a fixed-based IDTF may lease from a Medicare-enrolled individual or organization. Concluding that Subsection 15(ii) was clear, the DAB reiterated the regulation language that a fixed-based IDTF leasing or subleasing its operations or practice location from a Medicare-enrolled individual or organization is permitted as the regulatory prohibition is against a fixed-based IDTF leasing or subleasing to a Medicare-enrolled individual or organization.
Specifically, this most recent DAB decision provides great guidance to providers and suppliers that are structuring or restructuring their leasing arrangements to comply with the Medicare requirements. The failure to comply with the requirements could result in the revocation of the IDTF’s Medicare billing privileges.
Adrienne Dresevic, Esq. graduated Magna Cum Laude from Wayne State University Law School. Practicing healthcare law, she concentrates in Stark and fraud/abuse, representing various diagnostic imaging providers, eg, IDTFs, mobile leasing entities, and radiology and multi-specialty group practices.
Carey F. Kalmowitz, Esq. graduated from NYU Law School. Practicing healthcare law, he concentrates on corporate and financial aspects, eg, structuring physician group practice transactions; diagnostic imaging and ancillary services, IDTFs, provider acquisitions, CON, compliance, and Stark and fraud/abuse.
The authors are founding members of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or (212) 734-0128, or at www.thehlp.com.
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