August 25, 2008

Centers for Medicare & Medicaid Services

Department of Health and Human Services

Attention: CMS--1403--P

P.O. Box 8013

Baltimore, MD 21244--8013

**RE: Proposed 2009 Physician Fee Schedule**

**File Code CMS--1403--P**

To Whom It May Concern:

The purpose of this letter is to comment on CMS' June 30, 2008 Medicare
Physician Fee Schedule Proposed Regulations (CMS-1403-P) that address
certain new rules and regulations for the provision of imaging services
by physicians and nonphysician practitioners (NPPs).

Insight Imaging, LLC ("Insight") provides a diagnostic ultrasound
service in six (6) states in the Southeast and Ohio. Insight is owned by
businessmen and has no physician owners. The Company's service is
provided with technologically advanced equipment and highly qualified
and experienced technologists in many areas where the quality of
diagnostic services is inferior and/or access is limited. Unlike CT, PET
and MRI imaging technologies ("advanced" imaging), ultrasound as well as
x-ray and fluoroscopy ("standard" imaging) is a much lower cost,
portable technology that may be effectively and efficiently offered in
the physician practice suite and supervised by the treating / ordering
physician.

Insight provides ultrasound service [in the physician's practice
facility]{.underline} under the [direction]{.underline},
[control]{.underline} and [supervision]{.underline} of the on-site
physician and physician staff. For Medicare beneficiaries, the
convenience of on-site service is very important in determining whether
the patient ultimately receives the ultrasound imaging study. In certain
markets, alternative service outlets (e.g. hospital outpatient imaging
departments and fixed imaging centers) may entail drives beyond a twenty
(20) mile radius for patient treatment. In other markets, service delays
of 10-14 days for the scheduling of an exam are not uncommon. These
lengthy drive times and scheduling delays do not exist with on-site,
imaging services. In other cases, elderly patients simply prefer the
familiarity of their doctor's office, and therefore follow through with
the diagnostic study at a much higher rate than if the service is
scheduled for a the hospital setting. On-site imaging is more closely
tied to the episode of care thereby allowing the ordering / treating
physician to have greater input in the direction and control of the exam
and the effectiveness of this diagnostic tool.

We appreciate that CMS has begun to recognize the benefits of standard
imaging as a cost effective and efficient alternative to advanced
imaging. Non-government payors have been making this distinction for the
past few years in the way that they design their payment and
reimbursement programs. BlueCross BlueShield of Tennessee conducted a
2006 study of the growth in diagnostic imaging services differentiating
between high-tech (advanced) imaging and low-tech (standard) imaging.
Attached [Exhibit A]{.underline} graphically represents that high-tech
imaging accounts for 60% of diagnostic imaging costs and 75% of the cost
trend. The US Government Accountability Office recently completed its
report dated June 2008 (GAO-08-452) on this same issue -- [Medicare Part
B Imaging Services: Rapid Spending Growth and Shift to Physician Offices
Indicate Need for CMS to Consider Additional Management
Practices]{.underline}. This report is located at
[[http://www.gao.gov/new.items/d08452.pdf]{.underline}](http://www.gao.gov/new.items/d08452.pdf).
In this report, the GAO states that "Spending on CT scans, MRIs, and
nuclear medicine, which are generally more complex and therefore more
costly, rose faster -- 17 percent a year, on average -- than ultrasound,
X-ray and other standard imaging, and procedures that use imaging --
which grew at an average 9 percent annually." The higher dollar
economics of advanced imaging offers the potential for greater profit
which may lead to the over-utilization of the imaging modality. The
potential for over-utilization of standard imaging is much less due to
the significantly lower reimbursement economics.

We are encouraged by your proposed rules seeking comment on treatment
differences between the modalities. **[We believe strongly that CMS
should have different rules and regulations for advanced and standard
imaging to insure that access to care is maximized for lower cost
modalities and the cost to the Medicare program and its beneficiaries is
minimized]{.underline}**.

We appreciate the opportunity to provide commentary on the rules
proposed by CMS. A summary of our concerns / comments are as follows:

-   **Standard imaging (x-ray, ultrasound, fluoroscopy, etc.) must be
    treated differently from advanced imaging (MRI, CT, PET and Nuclear
    Medicine) from regulatory a standpoint.**

-   **Advanced imaging is significantly more expensive (3.0 to 5.0 times
    greater) than standard imaging, and the growth rate in advanced
    imaging is significantly higher.**

-   **The vast majority of standard imaging is currently supplied by
    physicians "in their office" where the diagnostic exam is a key
    instrument in the episode of care.**

-   **If standard imaging is rendered uneconomical to provide by the
    proposed anti-markup language, there will be a tremendous decrease
    in the availability of standard imaging, as the economics are not
    sufficient in the private market to cover costs. This will result in
    greatly restricted access to lower cost care, and an increase in
    advanced imaging where private economics are far greater.**

-   **If standard imaging providers are required to register as IDTF's,
    many physicians will view the increased administrative burden as
    being too costly for low margin modalities and will cease providing
    these. This will greatly restrict access to care, and increase the
    use of advanced imaging where the greater economics make the
    administrative burden worth while.**

-   **Based on the June 2008 GAO Report (GAO-08-452), the higher dollar
    economics of advanced imaging offers the potential for greater
    profit which may lead to the over-utilization of the imaging
    modality. The potential for over-utilization of standard imaging is
    much less due to the significantly lower reimbursement economics.**

**I. [INDEPENDENT DIAGNOSTIC TESTING FACILITIES]{.underline}**

The application of IDTF standards for all physicians and nonphysician
practitioners (NPPs) who bill for [standard, non-advanced]{.underline}
diagnostic imaging procedures [will adversely affect]{.underline} the
Medicare program and its beneficiaries.

First, standard, diagnostic imaging (x-ray, ultrasound and fluoroscopy)
is a highly prevalent imaging modality in physician and NPP practices,
as it represents a low cost, alternative to advanced imaging modalities
(MRI, CT, PET and Nuclear Medicine). Standard imaging helps eliminate
the need and/or defer the use of the advanced, higher cost modalities
which on average cost 342% more than standard imaging. We believe that
if additional regulatory and licensing requirements, that the IDTF 855B
application will entail, are applied to all imaging, it will have the
unintended effect of increasing the use of advanced imaging vis-à-vis
less expensive, standard imaging. The proposed rules, if adopted, will
likely be subscribed to by physicians and NPPs who have made a much more
significant dollar investment in advanced, higher reimbursement imaging
equipment. However, fewer physicians and NPPs will choose to pursue the
IDTF license for standard imaging since the reimbursement dollars are a
quarter to a third of advanced imaging. The financial rewards of
standard imaging are not worth the trouble of the increased
administrative burden. The rewards of advanced imaging, however, would
most likely be worth the burden. This economic dynamic will clearly
reduce access to cost-effective standard imaging and result in greater
utilization of the advanced, higher cost modalities.

[Example:]{.underline}

Through its Local Coverage Determinations (LCDs), Medicare recommends
the following exam frequencies for patient follow-up for the below
degrees of pathology in the Carotid Arteries:

  ------------------------------------ ----------------------------------
  **[Pathology (Degree of              **[Follow-Up Exam
  Stenosis)]{.underline}**             Frequency]{.underline}**

  20-50%                               Annually

  50% +                                Biannual
  ------------------------------------ ----------------------------------

The relative cost of the imaging modalities that may be used to monitor
carotid stenosis are as follows:

  ------------------------------------ ----------------------------------
  **[Modality]{.underline}**           **[Cost (TC)]{.underline}**

  Ultrasound                           \$137.36

  CT/CTA                               \$299.50

  MRI                                  \$480.90
  ------------------------------------ ----------------------------------

> Source: 2008 North Carolina Medicare Physician Fee Schedule;
>
> Participating Technical Component Fees

In this particular example, advanced imaging will cost a Medicare
patient with a greater than 50% stenosis between 218% and 350% more than
that of standard imaging as follows:

+-----------+-----------------+-------------------+-------------------+
| **[Modal  | **Cost (TC)**   | **Dollar (\$)     | **Percent (%)     |
| ity]{.und |                 | Incr.**           | Incr.**           |
| erline}** | **[2            |                   |                   |
|           | Exams/yr        | **[Over           | **[Over           |
|           | ]{.underline}** | Ultrasou          | Ultrasou          |
|           |                 | nd]{.underline}** | nd]{.underline}** |
+-----------+-----------------+-------------------+-------------------+
| U         | \$274.72        | \$0.00            | 0%                |
| ltrasound |                 |                   |                   |
+-----------+-----------------+-------------------+-------------------+
| CT/CTA    | \$599.00        | \$324.28          | 218%              |
+-----------+-----------------+-------------------+-------------------+
| MRI       | \$961.80        | \$687.08          | 350%              |
+-----------+-----------------+-------------------+-------------------+

Second, access to these standard imaging modalities will be reduced in
rural communities as well as metropolitan centers. The existing medical
centers, predominantly hospitals, which currently are burdened with
longer wait times for imaging, will be faced with a seismic shift of
increased traffic from studies that would have otherwise been performed
in outpatient office settings given the prevalence of X-ray, ultrasound
and other standard modalities provided in this setting. As cited in the
June 2006 GAO report, 2006 Medicare Part B imaging is provided in the
following setting as depicted in below graph:

![](media/image1.wmf){width="4.090277777777778in"
height="3.051388888888889in"}

It is difficult to believe that the Hospital and IDTF outlets will be
able to handle the increased traffic that will be driven to them when
the above size of the Physician office outlet is considered. The number
of physicians who provide x-ray, ultrasound and other standard imaging
in their offices is enormous. On top of this, the application of this
licensing requirement on standard imaging will effectively drive exam
volume into a higher cost hospital environment at the more expensive
HOPPS fee schedule.

Third, the addition of IDTF licensing for physicians and NPPs will
result in an increased burden on the Medicare carrier infrastructure in
the processing, review and approval functions for the massive increase
in 855B applications that would flow from having to license all imaging
providers, including standard imaging. The Office of Inspector General
in its June 2006 "Review of Claims Billed By Independent Diagnostic
Testing Facilities for Services Provided to Medicare Beneficiaries
During Calendar Year 2001" recommended that CMS consider performing
additional steps to better monitor the IDTF program to insure quality
and compliance. Due to funding limitations, CMS has stated that it would
not be feasible to provide this increased monitoring. If CMS is truly
interested in insuring that its beneficiaries receive imaging services
from "qualified nonphysician personnel" it should design a more
cost-effective system to review the billing of imaging procedures (pre-
or post procedure) through some other existing program, possibly the
Medicare Comprehensive Error Reporting Testing program to insure that
the credentials of the non-physician personnel are sufficient. Medicare
carriers have already published a set of standards and required
credentials for nonphysician personnel by CPT code in the LMRPs, which
should be used as a resource for the development of any program here.

Finally, from a quality of care point of view, low cost, standard
imaging is a key diagnostic tool and first line of defense for
physicians. It is very cost effective in ruling out pathology and
preventing the use of higher cost, advanced imaging for such studies. If
standard imaging is decreased, care will suffer.

If CMS does decide to add the IDTF licensing burden to physicians and
NPPs providing standard imaging services, we recommend review and
amendment of the current set of Supervising Physician requirements to
eliminate the limit currently imposed on the number of sites that a
Supervising Physician may supervise. We recommend that CMS move to an
activity or time based limit instead of a site limit. The amount of
activity that the Supervising Physician oversees is the most important
factor in determining the quality of oversight, not the number of sites.
Supervision restrictions should be based upon patient volume, which is
more closely related to the amount of equipment involved as opposed to
the number of sites. For example, in the mobile environment, one (1)
technician/equipment may provide service to ten (10) sites during one
(1) week and in doing so perform eighty (80) studies. Alternatively, a
technician/equipment in one (1) fixed site (fixed IDTF or hospital) will
perform a similar number of studies. Taking this example further, there
is no limit on the number of technicians/equipment that a Supervising
Physician supervises at one (1) fixed site. An equipment unit threshold
per supervising physician would be more precise. A maximum ultrasound
unit threshold of fifteen (15) per supervising physician would be
advisable.

  -----------------------------------------------------------------------

  -----------------------------------------------------------------------

# 

# II. [PHYSICAN SELF-REFERRAL AND ANTI-MARKUP ISSUES]{.underline}

[Beginning on page 239 of the proposed regulations]{.underline}, the
language as proposed -- "...the anti-markup provision in §414.50 would
apply in all cases where the PC or TC of a diagnostic testing service is
either: (i) purchased from an outside supplier or (ii) performed or
supervised by a physician who does not share a practice with the billing
physician or physician organization (as defined at §411.351)" -- seems
to impose the anti-markup to the technical component and the
professional component when the interpretation is performed by an
independent radiologist or cardiologist even when the TC is performed in
the ordering physician's practice and is supervised by the ordering
physician. If so, this will be harmful to the Medicare program by
leading to reduction in access to lower cost, standard imaging
procedures and increase the use of advanced, higher cost imaging due to
a reduction in the economic feasibility of standard imaging for the
physician and/or NPP practice. **[The reimbursement dollars for low
cost, standard imaging are simply not great enough to invest in
operational and personnel changes to comply with this proposed rule
change]{.underline}**, resulting in: 1) reduced access to lower cost,
diagnostic imaging especially for elderly patients and patients in rural
areas; 2) increased utilization of higher tech, higher cost fixed-based
imaging modalities; 3) greater cost for Medicare and its patient
beneficiaries. If this first alternative becomes a final rule and is
applied to low cost, standard imaging, some provision will need to be
made for overhead cost in the anti-markup language as physicians and
NPPs would be faced with losing economic structures due to billing,
overhead and bad debt costs. In other words, one dollar of Medicare
billing is worth less than one dollar, because the cost to collect it
and the charge-off rate of the co-pay.

> [Example]{.underline}: Using the earlier Carotid Artery ultrasound
> study as an example, the Medicare allowable fee for this study is
> \$137.36. Medicare will pay 80% or \$109.89 for this study and the
> patient is responsible for the remaining 20% or \$27.47. Under good
> collection scenarios, 80% of this \$27.47 will be collected, resulting
> in a bad debt write-off expense of \$5.50. As well, standard costs to
> bill for this type of procedure equal 10% of the allowed amount of
> \$137.36 or \$13.74. Total costs (billing and bad debt) associated
> with this exam equal \$19.24 or 14% or the Medicare Allowed amount.
> Physicians providing this service would soon be out of the business of
> providing this valuable modality; there is not enough margin in
> proving standard imaging to private payers to make up for it. Standard
> imaging should therefore be excluded from the anti-markup provision or
> some provision for this overhead must be made by CMS if this proposed
> first alternative rule is made final for standard imaging.

In recent conversations with CMS, it is not CMS' intention to have the
anti-markup on the TC triggered when a professional read is provided by
an independent radiologist or cardiologist. We would
[suggest]{.underline} more clarity in the language of the proposed rules
to prevent confusion.

[On page 257 of the proposed rules]{.underline}, CMS has also made two
alternative proposals (each without proposed regulatory text) regarding
the performance of the Technical Component by a technician who is not an
employee of the billing supplier. We [strongly oppose]{.underline} this
proposed regulatory language in the first alternative as it will
eliminate the provision of low cost, standard imaging that is today
highly prevalent in the physician practice and is a valuable,
alternative diagnostic tool to high cost, advanced imaging.

To provide some perspective here, it is important to understand the
impact it will have in eliminating our Company's current, standard
imaging service. Insight makes use of vans that transport ultrasound
technology and technologists to the office of each primary care
physician practice (PCP). In a typical situation, each PCP enters into a
1 year written agreement with Insight to lease ultrasound technology and
a technologist one day each week (or some other predetermined block of
time of no less than 4 hours) for use at the PCP primary practice
location. The PCP pays a set daily charge for the equipment and
technologist that does not vary with referrals. The PCP supervises the
technologist and includes him on its medical malpractice policy. The PCP
bills Medicare for the TC. The PC is referred to an outside radiologist
who bills and collects for the PC.

A simple reading of first alternative proposed regulation seems to imply
that in any diagnostic test billed by a physician, the PDT anti-markup
billing rules apply if the TC is not performed by an employee. The
elimination of above arrangements as well as those which involve a
physician employing a part-time technician to operate equipment in the
practice will eliminate the benefit of these services to CMS and its
patients. Both of these services are provided directly in the PCP
primary office where the PCP provides its traditional professional
services.  The services are also integrated into the PCP practice as it
provides accessible and convenient care for the benefit of PCP
patients.  The PCP has capital risk for the ultrasound technology (its
lease payments to Insight are set in advance for set periodic block time
visits that do not vary with the volume or value of referrals) and has
liability risk for the technologist. In other words, the PCP is clearly
performing the test and not purchasing the test.

It is clearly in the interest of CMS to allow the physician to obtain
only the amount of equipment and technician time that is needed, rather
than being forced to buy equipment, hire full time staff and justify the
expense by maximizing the exam activity of the equipment.

One page 257, we are [in favor]{.underline} of the language of the
second alternative as it seems to address the most common problem of the
billing of diagnostic procedures that are not part of the nexus of care
of the physician's primary office site where he provides his
professional services.

  -----------------------------------------------------------------------

  -----------------------------------------------------------------------

**[Conclusion -- General Comments on Value of Diagnostic
Ultrasound]{.underline}**

Diagnostic ultrasound is a clinically effective, low cost, standard
imaging modality. Advanced imaging is on average three (3) to four (4)
times as expensive as standard imaging. Regulations, proposed or
otherwise, that limit providers from offering this low cost modality to
physicians inherently leads to the use of advanced, higher cost imaging
modalities offered by hospitals or other fixed providers. By way of one
example, Insight serves a small rural hospital an hour's drive from
Nashville, TN. If it were not for the ultrasound service that Insight
offers in this area, the hospital's only imaging alternative was CT, a
higher cost modality. There are numerous examples of the value of
ultrasound as a cost effective substitute or alternative imaging tool to
other higher cost modalities which greatly benefits patients, providers
and CMS.

Private commercial insurance companies have begun to institute
pre-qualification/pre-verification standards to control the growth in
the use of imaging technologies. In most all of the instances currently
present in the marketplace, these standards have been directed at
advanced imaging. Standard imaging has been excluded from these new
rules because the modalities are significantly less expensive and offer
physicians alternatives to diagnose pathology that are much more cost
effective. We believe that CMS should give serious consideration to
avoiding any future rulemaking that would limit physician and patient
access to these standard imaging modalities and would result in greater
cost to the Medicare program.

We hope that CMS finds the above commentary to the June 30^th^ proposed
regulations helpful and informative. We appreciate the opportunity to
comment to insure that the Medicare Program delivers the maximum amount
of clinical and financial value to all stakeholders \-- patients,
providers, physicians, CMS and taxpayers.

Sincerely,

INSIGHT IMAGING, LLC

![](media/image2.png){width="3.1493055555555554in"
height="0.8791666666666667in"}

Randall W. Mountcastle

CFO

Attachment: Exhibit A