What's New in Supervision?

Violate imaging supervision rules, and you may lose the change to participate in Medicare.whats new in supervision

Editor's note: This is the conclusion of a two-part series addressing the controversial subject of medical imaging supervision. The first article (http://bit.ly/RADLAWApr2012) summarized related Medicare rules.

 

The federal government as well as whistleblowers are pursing fraud and abuse violations related to supervision errors. To help you understand the issues involved and guide you and your practice to remain compliant, we will describe two recent and important cases involving these violations. The first case resulted in an $11 million award against the imaging provider, which has been appealed. The second case is still in an early phase of litigation.

Breaking the Contract

In Hobbs v. MedQuest, a federal False Claims Act (FCA) case was brought against MedQuest, an imaging company that operates more than 90 facilities in 13 states, by a former employee and radiologic technologist. Two Nashville-area imaging centers enrolled in Medicare and functioned as independent diagnostic testing facilities (IDTFs), while a third enrolled as a physician office of a radiologist and his or her corporation.1 MedQuest managed the office until it purchased it from the radiologist. Then, MedQuest began billing diagnostic tests under the employer identification number (EIN) of the radiologist's corporation. The local Medicare carrier required a board-certified radiologist or other physician with specialized training to supervise studies at enrolled sites. On its enrollment form, MedQuest identified three supervising physicians, two radiologists, and an internist, who completed a specialized imaging training program.2

Notably, the carrier denied MedQuest's requests to approve other physicians for supervisory activities and to relax its proficiency standards. Medicare contacted MedQuest to identify which physicians must supervise imaging studies. Qualified individuals are especially necessary, according to Medicare, for contrast-based MR and CT studies. In fact, Medicare mandates that a physician must provide direct supervision of such studies at offices or IDTFs. In IDTFs, the supervising physician must demonstrate proficiency in performing and interpreting each type of diagnostic procedure completed at the IDTF.3

The technologist who initiated the case in 2011 lost her job after complaining about unapproved supervision practices. She filed a qui tam case — an action in which an individual plaintiff, or whistleblower, sues on behalf of the government as well as for herself — against MedQuest, alleging it violated FCA because it failed to adhere to Medicare supervision requirements for IDTFs. Additionally, she asserted that MedQuest wrongly billed for studies at the office under the radiologist's EIN for 18 months before enrolling as an IDTF. The government then took control of the case.

In a summary judgement, which ruled in favor of the whistleblower, the court decided that MedQuest's failure to satisfy the carrier's criteria violated the FCA. MedQuest claimed that those criteria lacked legal force because they were not a statute or regulation. It maintained that Medicare should address any noncompliance as a "quality of care" administrative issue. However, the court ruled that the Medicare enrollment form represents a contractual agreement between Medicare and MedQuest to ensure that only the listed physicians would supervise studies at the appropriate levels. According to the form, MedQuest was required to notify the carrier of any changes in supervising physicians.4 Thus, by submitting claims for studies that approved physicians did not supervise, MedQuest falsely certified that the physicians it listed in its application would supervise imaging exams. Therefore, the court determined that MedQuest violated the FCA and was liable for $11 million in damages.

Why should the MedQuest case matter to ACR members? Medicare carriers have considerable authority from CMS to set the parameters of imaging study supervision and the enrollment process. Your enrollment with Medicare serves as a binding contract to ensure that you know and will follow the carrier's rules. You may propose an alternate approach of meeting the carrier requirements, but you must accept the carrier's decision on the matter. A federal prosecutor in the MedQuest case stated that its office brought charges because the facilities had misrepresented themselves, and not because of the requirement that radiologists provide the supervision. So, in summary, document all conversations with carrier representatives and train your staff on evolving requirements.

Questionable Arrangements

In 2011, a U.S. attorney's office in Michigan sued Universal Imaging Inc., and its current and former owners for $150 million in damages and penalties under the FCA in Chesbrough, et al. v. Universal Imaging, et al.5 A radiologist and his spouse (a radiologic technologist) initiated the case as whistleblowers. The government alleged that the company and its nonmedical professional owners violated the supervision rules and paid kickbacks to referring physicians. Universal Imaging Inc., a nonprofit corporation, allegedly transferred its equipment to a for-profit entity with the same owners and leased the equipment from that entity. Prosecutors believed one defendant, a primary-care physician, recommended a test for patients in their practice every six months in return for payments.6

Separately, 14 other physicians and groups paid $1.56 million to settle charges that they illegally accepted kickbacks for referrals from Universal Imaging Inc. The government also brought criminal charges against the primary care physician; she was convicted and sentenced to 120 months imprisonment on charges of public corruption, health-care fraud, and conspiring to illegally distribute prescription drugs.

Federal scrutiny of imaging-related transactions continues to intensify. Stay compliant by meeting a carrier's specific credentials for supervising imaging studies. Communicate early and often with your practice staff, carrier officials, and the ACR's legal team at This email address is being protected from spambots. You need JavaScript enabled to view it. or 703-648-8900, extension 4044. If an imaging provider approaches you with a questionable arrangement, consult local counsel.


ENDNOTES
1. United States of America ex. Rel. Hobbs v. MedQuest Inc., et al., United States District Court, Nashville, Tennessee, Aug. 23, 2011.
2. Ibid.
3. 42 Code of Federal Regulations section 410.33(b) (2). Available at www.iscd.org/visitors/pdfs/Edited-42CFR410_000.pdf. Accessed Jan. 30, 3012.
4. United States of America ex. Rel. Hobbs v. MedQuest Inc. et al., United States District Court, Nashville, Tennessee, Aug. 23, 2011.
5. United States of American ex rel. Chesbrough v. Universal Imaging Inc., United States District Court, Detroit, Michigan, Dec. 29, 2011.
6. Halcom C., “Court Holds on to Proceeds from Universal Imaging Sale While Whistle-Blower Suit Moves Forward.” Available at http://bit.ly/crainswhistleblower. Accessed Jan. 30, 2012.


By Bill Shields, J.D., LL.M., CAE, and Tom Hoffman, J.D., CAE
Bill Shields, J.D., LL.M., CAE (This email address is being protected from spambots. You need JavaScript enabled to view it.), is ACR general counsel.
Tom Hoffman, J.D., CAE (This email address is being protected from spambots. You need JavaScript enabled to view it.), is ACR associate general counsel.

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