#2005-1___________________________________ January 13, 2005

From: The Office of Corporate Compliance

Re: Professional and Technical Billing

Recently it has come to the attention of the Office of Corporate Compliance that some
freestanding clinics would like to split the reimbursement of the technical and
professional portion. This would allow any reimbursement to be distributed to the clinic
for the technical portion and School of Medicine for the professional portion. The
difference between a freestanding (place of service 11) and provider based or hospital
owned (place of service 22) is: in a freestanding clinic, one bill is generated for both the
technical and professional components. A provider-based clinic generates two bills, one
for technical to cover costs associated with expenses of equipment and staff, and a
professional component to cover costs associated with provider salary and liability.
Several University staff members met to discuss this situation—those staff members
represented Department Administrators, Clinic Management, Hospital Management,
University Physicians (Audit and Reimbursement) and Office of Corporate Compliance.

As the situation was explained, a School of Medicine department office provider sees
patients at a community practice clinic with the designation of a freestanding clinic. This
provider orders and interprets diagnostic tests while at the clinic. An internal
arrangement is for the department to receive any interpretation reimbursement while the
clinic should receive any technical reimbursement. Therefore, they propose to bill in the
following manner:
        93005 (tracing only without interpretation and report) for the technical portion to
        be billed by the department office
        93010 (Interpretation and report only) for the interpretation to be billed by the
American Medical Association (AMA) Current Procedural Terminology (CPT) manual
descriptor has indicated a global or complete code of 93000. The concern expressed: Is
this correct billing? Is there a regulation that this proposal would violate?

In reviewing the Office of Inspector General’s (OIG) Work Plan for 2005, it appears that
office will be evaluating appropriateness of professional and technical components for
ECGs. This is a new initiative in FY2005. OIG will also evaluate the designation of
place of service (POS) billing appropriateness—provider based verses freestanding; this
is a FY2006 new start. With this information, it was decided to contact Centers for
Medicare and Medicaid Services—this organization has the task of administering the
Medicare and Medicaid programs. The OIG investigates and takes action against
offenders of the programs. Blue Cross and Blue Shield of Arkansas is carrier or
organization who administers the Part B of the Medicare Program for Missouri providers.
Part B consists of provider, diagnostic, surgical/DME and ambulance services. Audit and
Reimbursement Department staff contacted Missouri Medicare Carrier representative
Marcia Kennedy and distributed their replied that it was okay to bill in this manner.
However, later that opinion was rescinded and sent a different answer as follows: “This
is more of a coverage questions than an enrollment one as far as split billing is concerned,
but to the best of my knowledge they can not split bill.”

The response from the Center for Medicare and Medicaid Services (CMS) by Marsha
Mason-Wonsley, stated: the most complete service should be billed as the complete
code—for the place of service (freestanding clinic), appropriate coding would be to
report CPT Code 93000.

According to the OIG in their components of an effective compliance program, they
wrote: “Unbundling is the practice of a physician billing for multiple components of a
service that must be included in a single fee.” In the above scenario, our fees are: 93000
billed at $50, 93005 billed at $42 and 93010 billed at $40. CMS considers the amount
submitted on the claim not the amount reimbursed for a particular code or a group of
codes. Basically, it would be “intent” to defraud the Medicare/Medicaid program by
submitting a claim for additional codes when a more complete code is available.

Since the physician is acting as an attending in a freestanding clinic situation, he or she
must be linked to that clinic for the services performed there. In this scenario, the claim
must be submitted using the clinic location for a global service. Therefore in accordance
with the OIG directives for unbundling, must use the complete or inclusive code. The
CPT code would be 93000 as both professional and technical services were provided in
freestanding clinic (place of service 11).

Any service provided in a freestanding clinic situation should be billed as a complete
service and not split into separate professional and technical claims.

If you have any question or concern, please do not hesitate to contact the Office of
Corporate Compliance at 884-0632.

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