imageReimbursement. The word itself is enough to strike fear in the hearts of administrators, physicians, and just about anyone involved in healthcare today. There’s good reason for that effect, says William Sarraille, a healthcare lawyer and partner with Arent Fox (Washington, D.C.). “Reimbursement for medical imaging is a very mixed bag,” explains Sarraille. “It has become increasingly complex to assess imaging services.”

The calculation of rates among payers and even within payers is extremely complicated. To complicate matters even further are Medicare regulations, which can be tremendously difficult to interpret. Yet reimbursement is a driving force in healthcare, and healthcare institutions that fail to understand its intricacies could find themselves in trouble from both a business and a legal perspective.

Medicare reimbursement rates are set by the Center for Medicare and Medicaid Services (CMS). (Until June 2001, this was the federal agency known as HCFA or the Health Care Financing Administration.) Sarraille provides a few choice examples from the labyrinth of Medicare regulations and rates. A hospital might locate an imaging service in Building X, which it considers part of its hospital. Building X, however, may not be part of the hospital, in Medicare’s eyes. To be a hospital imaging service, the service must be ‘provider based’ as that term is used in Medicare regulations. “In the last 10 years, Medicare has been tightening its definition of provider-based,” says Sarraille.

To be considered provider-based, the hospital must meet a number of tests, which evaluate geographic location, financial integration, and clinical, management, and administrative connectedness. For example, a medical imaging facility owned by a hospital and placed at a clinic location 5 miles from the hospital’s main campus may not be ‘provider based.’ “If you incorrectly claim ‘provider-based,’ Medicare could ask for all of its reimbursement back, or worse yet, say the claims filed for the doctors’ services were false claims under the False Claims Act,” Sarraille notes.

Please refer to the August 2001 issue for the complete story. For information on article reprints, contact Martin St. Denis