Physician Must Signal Intent to Order Diagnostic Tests For Medicare Reimbursement

The denial of more than 150 Medicare reimbursement claims for audiology testing services was affirmed in a Jan. 10 federal district court ruling that held such services are only reimbursable when a treating physician has clearly requested the service beforehand (Doctors Testing Ctr., LLC II v. Sebelius, 2014 BL 6527, E.D. Ark., No. 4:11-cv-00857-KGB). The U.S. District Court for the Eastern District of Arkansas granted summary judgment to the Department of Health and Human Services on an appeal from a Medicare Appeals Council’s (MAC) decision to deny reimbursement of all of plaintiff Doctors Testing Center LLC II’s (DTC) claims. Judge Kristine G. Baker said in her decision that Medicare regulations require diagnostic tests of the type provided by the DTC to be requested by a physician prior to the performance of the test in order to be reimbursable. Baker said it was clear from the record that DTC’s technicians, not physicians, ordered the tests in the claims at issue and affirmed the MAC’s decision. Partial Claim Victory Reversed The DTC’s appeal centered on claims for diagnostic audiological testing services performed on Medicare beneficiaries in 2007. The DTC technicians ordered the tests for Medicare beneficiaries. The claims were denied reimbursement by a prepayment auditor in January 2008 and again later by a qualified independent contractor. An administrative law judge (ALJ) eventually ruled that 68 claims were reimbursable and denied the remaining claims. The MAC overturned the ALJ’s decision and ruled that none of the DTC’s claims was reimbursable because records showed that the tests weren’t ordered by a physician and therefore weren’t “reasonable and necessary” under 42 C.F.R. §410.32(a). The DTC made four arguments in its appeal of the MAC’s decision. The DTC argued that the MAC should have reviewed the ALJ’s decision for errors of law only, instead of making its own findings of fact; should have remanded the case to the ALJ; erred in holding that a physician’s signature is required for a diagnostic test to be reimbursable; and erred in finding that the tests at issue weren’t later approved by a treating physician. Physician Intent Required The court rejected the DTC’s arguments with regard to the ALJ findings. Baker said the MAC was limited to the ALJ’s findings of fact only in deciding whether to review the appeal at all, but it was free to make its own finding of fact on the evidence once it decided to review the decision. In addition, Baker said remand to the ALJ was unnecessary because the MAC’s decision was supported by substantial evidence. The court also disagreed with the DTC’s substantive arguments regarding the MAC’s decision. The court said that the MAC’s decision held that a physician must signal the intent to order the diagnostic test in question in order for it to be reimbursable. The MAC didn’t hold that a physician’s signature on an order prior to the test was required, according to the court, and that the DTC misinterpreted the MAC’s ruling on the issue. Baker said the MAC was correct in ruling that a physician’s signature approving of a test after it was performed didn’t satisfy §410.32(a). Further, Baker said it was immaterial whether a treating physician accepted and used the results of the technician-ordered tests for treatment for purposes of reimbursement. Baker said that the patient records didn’t refute the substantial evidence showing that the tests weren’t ordered by a treating physician and therefore weren’t reimbursable under Medicare. Takeaway: Diagnostic tests must be ordered by a treating physician to be eligible for reimbursement under Medicare.