Payment Conditions for Radiology Services

Professional Component (PC)

Carriers must pay for the PC of radiology services furnished by a physician to an individual patient in all settings under the fee schedule for physician services regardless of the specialty of the physician who performs the service. For services furnished to hospital patients, carriers pay only if the services meet the conditions for fee schedule payment and are identifiable, direct, and discrete diagnostic or therapeutic services to an individual patient, such as an interpretation of diagnostic procedures and the PC of therapeutic procedures. The interpretation of a diagnostic procedure includes a written report.

Technical Component (TC)

Hospital and Skilled Nursing Facility (SNF) Patients

Carriers may not pay for the technical component (TC) of radiology services furnished to hospital patients. Payment for physicians’ radiological services to the hospital, e.g., administrative or supervisory services, and for provider services needed to produce the radiology service, is made by the fiscal intermediary (FI)/AB MAC to the hospital as a provider service.

FIs/AB MACs include the TC of radiology services for hospital inpatients, except Critical Access Hospitals (CAHs), in the prospective payment system (PPS) payment to hospitals.
Hospital bundling rules exclude payment to suppliers of the TC of a radiology service for beneficiaries in a hospital inpatient stay. CWF performs reject edits to incoming claims from suppliers of radiology services.

Upon receipt of a hospital inpatient claim at the CWF, CWF searches paid claim history and compares the period between the hospital inpatient admission and discharge dates to the line item service date on a line item TC of a radiology service billed by a supplier. The CWF will generate an unsolicited response when the line item service date falls within the admission and discharge dates of the hospital inpatient claim.

Upon receipt of an unsolicited response, the carrier will adjust the TC of the radiology service and recoup the payment.

For CAHs, payment to the CAH for inpatients is made at 101 percent of reasonable cost.
Radiology and other diagnostic services furnished to hospital outpatients are paid under the Outpatient Prospective Payment System (OPPS) to the hospital. This applies to bill types 12X and 13X that are submitted to the FI/AB MAC. Effective 4/1/06, type of bill 14X is for non-patient laboratory specimens and is no longer applicable for radiology services.

As a result of SNF Consolidated Billing (Section 4432(b) of the Balanced Budget Act (BBA) of 1997), carriers may not pay for the TC of radiology services furnished to Skilled Nursing Facility (SNF) inpatients during a Part A covered stay. The SNF must bill radiology services furnished its inpatients in a Part A covered stay and payment is included in the SNF Prospective Payment System (PPS).

Radiology services furnished to outpatients of SNFs may be billed by the supplier performing the service or by the SNF under arrangements with the supplier. If billed by the SNF, Medicare pays according to the Medicare Physician Fee Schedule. SNFs submit claims to the FI/AB MAC with type of bill 22X or 23X.

Services Not Furnished in Hospitals
Carriers must pay under the fee schedule for the TC of radiology services furnished to beneficiaries who are not patients of any hospital, and who receive services in a physician’s office, a freestanding imaging or radiation oncology center, or other setting that is not part of a hospital.

Services Furnished in Leased Departments
In the case of procedures furnished in a leased hospital radiology department to a beneficiary who is neither an inpatient nor an outpatient of any hospital, e.g., the patient is referred by an outside physician and is not registered as a hospital outpatient, both the PC and the TC of the services are payable under the fee schedule by the carrier.