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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 state that a contractor 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 
contractor 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.  
 
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. 
 
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- Outpatient Hospital, on the claim 
for the interpretation or PC. 
 
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.  
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. 
 
You can find this information in the Centers for Medicare and Medicaid Service, Internet-Only Manual, 
Publication 100-04, Medicare Claims Processing Manual, Chapter 13- Radiology Services and Other 
Diagnostic Procedures, Section 20.2.1 - Hospital and Skilled Nursing Facility Patients, and Section 150 - Place 
of Service Instructions for the Professional Component and the Technical Component of Diagnostic Tests.  
 
The rules say that an indicator of 1 identifies codes that describe diagnostic tests. 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 only. The total RVUs for codes reported without a modifier equals the sum of RVUs for 
both the professional and technical component.  
 
You can find this information in the Centers for Medicare and Medicaid Service, Internet-Only Manual, 
Publication 100-04, Medicare Claims Processing Manual, Chapter 23- Fee Schedule Administration and 
Coding Requirements, Section 50.6 - Physician Fee Schedule Payment Policy Indicator File Record Layout. 
 
The rules say that the Place of service (POS) code of 21 represents an inpatient hospital setting. The POS code 
of 22 represents an on-campus outpatient hospital setting.  
 
You can find this information in the Centers for Medicare and Medicaid Service, Internet-Only Manual, 
Publication 100-04, Medicare Claims Processing Manual, Chapter 26 - Completing and Processing Form CMS-
1500 Data Set, Section 10.5 - Place of Service Codes (POS) and Definitions. 
 
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). 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com. 
 
The Plan contract says that the Plan covers items and services in accordance with Medicare rules.