Medicare Payments for Diagnostic Radiology Services in Emergency Departments

In 2008, Medicare erroneously allowed 19 percent ($29 million) of claims for interpretation and reports for computed tomography (CT) and magnetic resonance imaging (MRI) and 14 percent ($9 million) of claims for interpretation and reports for x rays in hospital outpatient emergency departments because of insufficient documentation.

The Social Security Act and CMS regulations govern Medicare payments for all radiology services and require that services be ordered by physicians, have documentation to support the claims, and be medically necessary. As a condition of fee schedule payment, services are required to contribute directly to the diagnosis or treatment of an individual beneficiary. Although CMS has not established required elements for interpretation and reports, the American College of Radiology has established suggested technical standards and practice guidelines for interpretation and reports for diagnostic services. These practice guidelines help practitioners deliver effective, efficient, consistent, and safe medical care.

Of the allowed Medicare claims for CTs and MRIs in hospital outpatient emergency departments in 2008, (1) 12 percent ($18 million) did not have physicians' orders as part of the medical record documentation and (2) 12 percent ($19 million) did not have documentation to support that interpretation and reports had been performed. Five percent ($7.3 million) had overlapping errors. Of the allowed Medicare claims for x-rays in hospital outpatient emergency departments in 2008, (1) 8.6 percent ($5.5 million) did not have physicians' orders as part of the medical record documentation and (2) 8.2 percent ($5.4 million) did not have documentation to support that interpretation and reports had been performed. Three percent ($1.9 million) of claims had overlapping errors. Although not erroneously allowed, 12 percent ($19 million) of CT and MRI claims and 16 percent ($10 million) of x-ray claims were for interpretation and reports that were performed after beneficiaries left emergency departments. CMS offers inconsistent payment guidance on the timing for interpretation. In 2008, approximately 71 percent of interpretation and reports for x rays and 69 percent of interpretation and reports for CTs and MRIs did not follow one or more of the American College of Radiology-suggested documentation practice guidelines.

We recommended that CMS (1) educate providers on the requirement to maintain documentation on submitted claims, (2) adopt a uniform policy for single and multiple claims for interpretation and reports of diagnostic radiology services to require that claimed services be contemporaneous or identify circumstances in which noncontemporaneous interpretations may contribute to the diagnosis and treatment of beneficiaries in hospital outpatient emergency departments, and (3) take appropriate action on the erroneously allowed claims identified in our sample.

In its written comments on the report, CMS concurred with the first and third recommendations. CMS did not concur with the second recommendation. CMS indicated that it does not believe that a single billed interpretation must in all cases be contemporaneous with the beneficiary's diagnosis and treatment to contribute to that diagnosis and treatment. However, a uniform policy requiring that the interpretation and report be contemporaneous with, or, if not contemporaneous, demonstrably contribute to the beneficiary's diagnosis and treatment could reduce unexplained complexity in what is already a complicated billing system for medical diagnostics.