CMS and the OIG are concerned with the potential for erroneous payments for either unjustified or medically unnecessary services in the independent diagnostic testing facilities (IDTF), which concern is initially based upon an audit performed for fiscal year 2001 by the OIG (A-03-03-00002). Therefore, in the August 22, 2006 Proposed Regulations, a link to which was posted here in yesterday’s MedLAw Blog post,  the Department of Health and Human Services (HHS) is proposing to subject IDTFs to standards similar to Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) as promulgated at 42 CFR 424.57 on October 11, 2000. IDTF would be required to meet the following standards as of January 1, 2007 and any new or re-enrolling IDTF would be required to certify compliance with those standards at the time of application, which standards are as follows:

1.         Operate its business and compliance with all applicable federal, state and local licensure and regulatory requirements with regard to the health and safety of patients;

2.         Provide complete and accurate information on Medicare participation enrollment applications;

3.         Maintain a physical facility with space and equipment appropriate for the services designated on the enrollment application;

4.         Have all applicable testing equipment available at the physical site, excluding portable equipment;

5.         Maintain a primary business telephone, listed under the name of the business and located at the physical site which numbers must be available through directory assistance;

6.         Maintain comprehensive liability insurance of at least $300,000 or 20% of its average annual Medicare billings, whichever is greater, obtain from an insurance company not owned by a relative;

7.         Agree not to directly solicit patients, which would include but not be limited to solicitation through telephone, computer or in-person contacts and agree not to accept patients unless referred for diagnostic testing by an attending physician (or non-physician practitioners in accordance with § 410.32 (a)(3);

8.         Answer beneficiary questions and respond to complaints with appropriate documentation;

9.         Openly post the standards for review by the public and by patients;

10.       Disclose to the government any person having ownership, financial or control interest or any other legal interest in the supplier at the time of enrollment or within 30 days of any change;

11.       Have its testing equipment calibrated per equipment instructions in compliance with applicable national standards;

12.       Have technical staff on duty with the appropriate credentials to perform designated testing along with maintain appropriate licensure or documentation for such individuals;

13.       Have proper medical storage along with retrieval of medical records upon request from CMS or designated contractors; and

14.       Permit CMS, and any agents or contractors, to conduct unannounced on-time inspections to confirm compliance with each standard.

In addition to the compliance standards, the physician supervision standard of  42 CFR § 410.33 (b)(1) would be revised to limit physicians who provide supervision to no more than three IDTF sites.

The discussion of these revisions are contained on pages 49060 through 49062 of the Proposed Rules and the proposed regulation is 42 CFR § 410.33 contained on page 49080 of the August 22, 2006 Proposed Rules.