Some of the Current Legal Issues in Ultrasound Services

1. Some of the Current Legal Issues in Ultrasound Services William A. Sarraille, J.D. Arent Fox Washington, D.C. (202) 857-6359

2. Recent Developments • Stark II Final Rules Announced • New Concept of Relationships Not Varying with the Value or Value of Referrals • Per Unit Approaches Permitted; Not % Arrangements • New Means of Paying Productivity Bonuses to Physicians • Personally Performed OK • Incident to • OK if (1) Total RVUs, (2) Anyway if Less Than 5%, (3) in the Same Manner as Non-Designated health Service Revenues, and (4) Any Other Reasonable Manner

3. Other Stark II Developments • Permission to Proceed with Under Arrangements Relationships • Supervision Changes • Direct Supervision to as Permitted by the Coverage and Payment Rules • Release of the Supervision Program Memorandum • Echo, Vascular, and General Ultrasound Treated Somewhat DifferentlyThe Effort to Correct the Problems • Looking Forward • The “Location” Restrictions and Why They Are Important

4. HOPPS Basics • Not Like DRGs • About 5000 Procedures Grouped into about 500 Ambulatory Patient Classifications (“APCs”) • Payment for Multiple Procedures from within an APC When Performed on the Same Date of Service • APCs Supposed to Be Based on Clinical and Resource Similarities • Rates Supposedly Based on Median Costs under the Cost Reporting System

5. Other Aspects of the Rule • “Dealing” with the Formula Driven Overpayments Problem • The Gradual Approach and Freezing Median Co-Pays • Extension of Part B Supervision Standards “to the Hospital”

6. A Volume Control Measure and a Coding Warning • Correct Coding Initiative • A Coding Warning • From Revenue Codes • To a CPT/ICD-9 Driven System

7. Ultrasound and Vascular APCs • APC 265 = Level I Diagnostic Ultrasound Except Vascular • APC 266 = Level II Diagnostic Ultrasound Except Vascular • APC 267 = Vascular Ultrasound • APC 268 = Guidance Under Ultrasound • APC 269 = Echocardiography Except TE • APC 270 = Transesophageal

8. Analysis of the APCs • Based on Anatomical Sites Studied, Not Clinical and Resource Similarities • Problems Flow from That • Limited and Completes to Be Paid the Same • What That Will Mean • Disparate Payments Within APC System • 93880 = $131.88 But 93307/93320/93325 = $663.18

9. Analysis of the APCs • High End and Low End Problems • Physiologic = $136.65 When PERVU = $47.44 (TC, facility) • Compression of a Pseudo-Aneurysm = $112.04 When PERVU = $275.07 (global, facility) $27.54 (PC, facility) • Disconnect Generally with the PERVUs • Completes as Much as 88 % More Under PERVUs • Limiteds as Much as 43 % More • The Implications

10. Increasing Focus on Ultrasound Services from a Fraud and Abuse Perspective • OIG’s Audits • HCFA’s Embarrassment • The Wider Significance of the IDTF Changes • Bad Press

11. Ultrasound as a Target • Current Areas of Investigatory Activity • Anti-Kickback and Stark Issues • Reassignment Issues • IC Problem • Part-Time Employees Not Reading at the Practice Site • Frequency Issues • Stent Surveillance

12. Other Issues • Violations of Limited Coverage Criteria and Other Medical Necessity Issues • The Old Days • The Clinical Laboratory Model Compliance Program • Venous and Arterial • Subclavian Loop in Carotid Studies • Abdominal and Lower Extremities • Stunted Clinical Times • “New” Patient Issue

13. Still More Issues • Bundling Violations • Order Documentation and Screening Services Problems • Treating Physician Requirement for Physician Office, IDTF and Hospital Outpatient Services • Written Orders for IDTFs • The “Rule Out” Problem • Protocol or Progressive Orders • The Balanced Budget Act Requirement • Code Steering through Order Forms

14. Interpretations Issues--A Hot Topic • When the Preliminary Report Is the Interpretation • Physician Services and the “No Interposition” Rule • False Claims Act Implications • Qui Tam Cases Sprouting Up • Effects Propriety of TC Billings, Too • Anti-Kickback Implications