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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. 
You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101. 
 
The rules say that providers/suppliers must report services correctly. Procedures should be reported with the 
Current Procedural Terminology (CPT) code that describes the services performed. You can find this rule in 
the Centers for Medicare and Medicaid Services, Medicare National Correct Coding Initiative Policy Manual 
for Medicare Services, Chapter I(A). 
 
The rules say A/B MACs (B) 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 AB 
MAC (A) to the hospital as a provider service. 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. Many of the diagnostic services, including radiology services, provided by 
physicians/practitioners contain both a technical component (TC) and a professional component (PC). Often, 
the PC and TC of diagnostic services are furnished in different settings. As a general policy, the Place of 
Service (POS) code assigned by the physician/practitioner for the PC of a diagnostic service shall be the setting 
in which the beneficiary received the TC service. Interpretation Provided Under Arrangement - To A Hospital 
Separate TC and PC If a diagnostic test which has a separate TC and PC is provided under arrangement to a 
hospital, the physician who reads the test can bill and be paid for the professional component. Both the 
technical and professional components of the test are also subject to the physician self-referral prohibition. 
The appropriate POS code for the interpretation (or PC) is the setting where the beneficiary received the TC 
service. If the interpretation is performed in the physicians office and the patient received the TC service in the 
provider-based outpatient hospital setting, the physician assigns POS code 22, for On Campus-Outpatient 
Hospital, or POS 19, for Off Campus [1]Outpatient Hospital, on the claim for the interpretation or PC. 
Determination of Payment Locality. Under the Medicare physician fee schedule (MPFS), payment amounts are based on the relative resources required to provide services and vary among payment localities as resource 
costs vary geographically as measured by the geographic practice cost indices (GPCIs). The payment locality is 
determined based on the location where a specific service code was furnished. For purposes of determining the 
appropriate payment locality, CMS requires that the address, including the ZIP code for each service code be 
included on the claim form in order to determine the appropriate payment locality. The location in which the 
service code was furnished is entered on the ASC X12 837 professional claim format or in Item 32 on the paper 
claim Form CMS 1500. Separate Billing of Professional Interpretation 
 
If the same physician or other supplier entity does not furnish both the TC and PC of the diagnostic service, or 
if the same physician or other supplier entity furnishes both the TC and PC but the professional interpretation 
was furnished in a different payment locality from where the TC was furnished, the professional interpretation 
of a diagnostic test must be separately billed with modifier -26 by the interpreting physician. 
 
1 = Diagnostic tests or radiology services: This indicator identifies codes that describe diagnostic tests, e.g., 
pulmonary function tests, or therapeutic radiology procedures, e.g., radiation therapy. These codes generally 
have both a professional and technical component. Modifiers 26 and TC can be used with these codes. The 
total RVUs for codes reported with a 26 modifier include values for physician work, practice expense, and 
malpractice expense. The total RVUs for codes reported with a TC modifier include values for practice expense 
and malpractice expense only. The total RVUs for codes reported without a modifier equals the sum of RVUs 
for both the professional and technical component. 
 
For services furnished on or after July 1, 2012, an independent laboratory may not bill the A/B MAC (B) (and 
the A/B MAC (B) may not pay) for the TC of a physician pathology service furnished to a hospital inpatient or 
outpatient. 
 
You can find this information in the Medicare Claims Processing Manual Chapter 13 - Radiology Services and 
Other Diagnostic Procedures; Section 20.2.1 - Hospital and Skilled Nursing Facility (SNF) Patients, Section 
150  Place of Service (POS) Instructions for the Professional Component (PC or Interpretation) and the 
Technical Component (TC) of Diagnostic Tests and Medicare Claims Processing Manual, Chapter 23  Fee 
Schedule Administration and Coding Requirements, Section 50.6  Physician Fee Schedule Payment Policy 
Indicator File Record Layout. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.