Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
M  I
IAMI  NDEPENDENT 
 
D T
I AGNOSTIC  ESTING 
 
F  C W
ACILITIES   OMPLIANCE  ITH 
 
 
M S  
EDICARE  TANDARDS
 
 
 
 
   
 
 
 
 
 
 
 
 
Daniel R. Levinson  
Inspector General 
 
August 2011 
OEI-05-09-00560   
 E X E C U T I V E   S U M M A R Y  
OBJECTIVES
 
1.  To determine whether Independent Diagnostic Testing Facilities 
(IDTF) in the Miami area complied with selected Medicare 
standards requiring IDTFs to be at the locations on file with the 
Centers for Medicare & Medicaid Services (CMS) and to be open 
during business hours. 
2.  To describe CMS actions against IDTFs that did not comply with 
these standards.  
BACKGROUND 
IDTFs, a type of Medicare provider, offer diagnostic services and are 
independent of a physicians office or hospital.  Medicare allowed almost 
$1 billion for IDTF claims for 2.4 million beneficiaries in 2010. Of this, 
$23.4 million was for claims by IDTFs in the Miami area. 
IDTF services have historically been vulnerable to abuse.  In site visits 
in 1997, the Office of Inspector General (OIG) found that 20 percent of 
IDTFs were not at the locations on file with CMS.  A 2001 OIG review of 
IDTF claims projected $71.5 million in improper Medicare payments.   
To comply with Medicare standards, IDTFs must maintain a physical 
facility at the location on file with CMS and be open during business 
hours.  IDTFs that do not comply with Medicare standards are subject 
to a variety of administrative actions, including revocation of their 
billing privileges. 
To determine whether IDTFs in the Miami area were at the locations on 
file with CMS and were open during business hours, we conducted 
unannounced site visits to all IDTFs with fixed practice locations.  We 
also determined the amount that Medicare allowed for noncompliant 
IDTFs and reviewed documentation about CMS actions against 
noncompliant IDTFs.    
FINDINGS 
Twenty-seven of the ninety-two Miami-area IDTFs failed to comply 
with selected Medicare standards.  Twenty-three IDTFs were not at 
the locations on file with CMS.  Four IDTFs were not open during 
business hours.  Of the 27 noncompliant IDTFs, 14 submitted claims 
representing services performed on the same dates that site reviewers 
visited their locations.   
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E X E C U T I V E   S U M M A R Y  
CMS took action against most of the noncompliant IDTFs as a result 
of a special enrollment project and routine oversight.  CMS took 
action against 23 of the 27 noncompliant IDTFs in the months after we 
completed our site visits.  A special enrollment project resulted in 
13 actions against noncompliant IDTFs, and routine oversight resulted 
in 10 actions against noncompliant IDTFs.   
Three IDTFs against which CMS took action received Medicare 
payments while CMS was revoking their billing privileges.  Medicare 
continued to pay 3 of the 12 noncompliant IDTFs while the revocations 
of their billing privileges were being finalized.  CMS took an average of 
17 weeks to remove these three IDTFs from Medicare.  Between the 
time when CMS determined that they were noncompliant and the time 
when the revocations were finalized, Medicare allowed $146,000 for 
claims submitted by these IDTFs. 
RECOMMENDATIONS 
Periodically conduct unannounced site visits to IDTFs.  Periodically 
conducting nationwide unannounced site visits to IDTFs may enable 
CMS to identify and remove nonoperational IDTFs from the program 
and potentially reduce erroneous Medicare payments.  CMS could focus 
unannounced site visits on high-risk areas or base them on fraud-risk 
assessments. 
Immediately stop payments to noncompliant IDTFs whose billing 
privileges are being revoked.  CMS should immediately stop payments 
to noncompliant IDTFs as soon as there is enough evidence to begin the 
revocation process.  Currently, CMS may continue to pay providers 
between the time when they are determined to be noncompliant and the 
time when their revocations are finalized.  These payments should be 
retroactively recouped; however, previous OIG work demonstrates that 
many Medicare overpayments are not recovered.  If CMS immediately 
stops payments while concurrently pursuing appropriate action against 
noncompliant IDTFs, it will help avoid loss of Medicare funds.   
 
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E X E C U T I V E   S U M M A R Y  
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
CMS concurred with our recommendations.  CMS stated that it 
anticipates increasing the frequency of unannounced site visits to 
IDTFs.  CMS also stated that it is exploring options to use payment 
suspensions in conjunction with revocation actions for providers and 
suppliers that are found to be nonoperational.  We did not make any 
changes to the report based on CMSs comments. 
 
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 T A B L E   O F   C O N T E N T S  
EX ECUT I VE  SUM M ARY  .....................................i 
 
 
I NT RO DU CT I O N  ............................................ 1 
 
 
F I NDI NG S  .................................................. 9 
Twenty-seven of the ninety-two Miami-area IDTFs failed to 
comply with selected Medicare standards .................... 9 
 
CMS took action against most of the noncompliant IDTFs  
as a result of a special enrollment project and routine oversight . 11 
   
Three IDTFs against which CMS took action received Medicare 
payments while CMS was revoking their billing privileges  .....  13 
   
RECO M M END AT I O N S  .....................................  14 
Agency Comments and Office of Inspector General Response  ...  15 
 
 
APP EN DI X ES  .............................................  16 
  A:  Independent Diagnostic Testing Facility Standards ........  16 
  B:  Detailed Methodology .................................  20 
C:  Agency Comments  ...................................  23 
 
 
ACKNO WL E DG M E N T S .....................................  26 
 
 
   
  I N T R O D U C T I O N  
OBJECTIVES 
1.  To determine whether Independent Diagnostic Testing Facilities 
(IDTF) in the Miami area complied with selected Medicare 
standards requiring IDTFs to be at the locations on file with the 
Centers for Medicare & Medicaid Services (CMS) and to be open 
during business hours. 
2.  To describe CMS actions against IDTFs that did not comply with 
these standards.  
BACKGROUND 
Medicare covers inpatient and outpatient clinical and diagnostic 
services.  These services can be provided in a number of settings, 
including physicians offices, hospitals, and IDTFs.  IDTFs, a type of 
Medicare provider, offer diagnostic services and are independent of a 
physicians office or hospital.1  Medicare allowed almost $1 billion for 
IDTF claims for 2.4 million beneficiaries in 2010.  Medicare allowed 
$23.4 million for claims by Miami-area IDTFs in 2010.   
Services that may be provided by an IDTF include, but are not limited 
to, magnetic resonance imaging, ultrasound, x-rays, and sleep studies.  
Although some IDTF services can be performed remotely, such as 
pacemaker monitoring, most IDTF services require a patient to be 
present at a facility.   
Historical Vulnerabilities 
IDTF services have historically been vulnerable to fraud, waste, and 
abuse.  IDTFs were originally known as Independent Physiological 
Laboratories (IPL).  In 1997, after becoming concerned that IPL services 
were vulnerable to abuse in particular, citing a lack of certification 

requirements and confusion about the type of services that IPLs should 
provide CMS issued new standards to address these vulnerabilities.2, 3  

The new standards modified staffing, certification, and documentation 
requirements for IPLs.  IPLs were also renamed IDTFs to help clarify 
their function.4 
 
 
1 42 CFR  410.33(a)(1). 
2 62 Fed. Reg. 59048, 5907172 (Oct. 31, 1997). 
3 62 Fed. Reg. 59048, 5910001 (Oct. 31, 1997) (adding 42 CFR  410.33). 
4 62 Fed. Reg. 59048, 5907172 (Oct. 31, 1997). 
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Also in 1997, the Office of Inspector General (OIG) conducted site visits 
to IPLs.  In an August 1998 report based on these visits, OIG reported 
that 20 percent of IPLs were not at the locations on file with CMS.5  In 
the report, OIG also projected $11.6 million in improper payments for 
IPL services and expressed concerns that the new standards that CMS 
had issued would not be sufficient to reduce the vulnerabilities that OIG 
had identified.6 
Despite the new standards, problems with IDTF services persisted.  In a 
2001 review of IDTF services, OIG identified claims that were not 
reasonable, necessary, ordered by a physician, or sufficiently 
documented and projected $71.5 million in improper payments.7  In 
2007, CMS reported that it had denied $163 million in IDTF charges 
and terminated Medicare billing privileges for 83 IDTFs in 
Los Angeles.8   
In May 2009, the Health Care Fraud Prevention and Enforcement 
Action Team (HEAT) initiative was launched to increase efforts to 
reduce Medicare fraud.  A collaboration between officials from the 
Department of Health and Human Services and the Department of 
Justice, the HEAT initiative builds upon existing programs that combat 
fraud and identifies new methods to prevent fraud. 
Medicare Standards  
CMS designed the IDTF standardsmost recently updated in 2008to 
ensure that IDTFs and their staffs operate in accordance with 
appropriate business practices.  Among other things, these standards 
require IDTFs to: 
  maintain a physical facility, 

  be accessible during regular business hours, and  

 
 
 
5 OIG, Independent Physiological Laboratories:  Vulnerabilities Confronting Medicare, 
OEI-05-97-00240, August 1998.   
6 Ibid. 
7 OIG, Review of Claims Billed by Independent Diagnostic Testing Facilities for Services 
Provided to Medicare Beneficiaries During Calendar Year 2001, A-03-03-00002, June 2006. 
8 CMS testimony before the House Budget Committee, July 17, 2007.  Accessed at 
http://www.cms.hhs.gov on Oct. 5, 2009.    
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  report any change in location to CMS within 30 days of the 

change.9   
See Appendix A for the 17 Medicare standards for IDTFs. 
IDTF Enrollments 
An IDTF that wishes to enroll in Medicare must submit an application.  
The application collects various types of information, including the 
address at which the IDTF will provide services and the services that it 
will provide. 10   
An applicant must indicate whether it will provide services at a fixed 
location or whether it will be mobile or portable.  A mobile or portable 
IDTF does not provide services at one fixed location.  An applicant must 
submit a separate application for each IDTF practice location and for 
each mobile or portable unit.11   
Before approving an IDTFs enrollment, CMS reviews the application 
and conducts an initial site visit.  These processes may help to ensure 
that information on the application is correct and that the applicant 
complies with all 17 Medicare standards.   
Postenrollment Site Visits 
According to the Medicare Program Integrity Manual, if an existing 
IDTF requests an expansion of services and if the new services are 
sufficiently different from those already provided, CMS must conduct a 
postenrollment site visit.12  For example, if an IDTF that provides sleep 
studies submits a request to start providing ultrasound tests, CMS is 
required to conduct a postenrollment site visit.   
In addition, CMS may conduct postenrollment site visits at its 
discretion.13  CMS cites unannounced postenrollment site visits as a 
successful way to determine whether IDTFs are operational and are at 
the locations on file with CMS.14  According to the Medicare Program 
 
9 42 CFR  410.33(g)(2), (g)(3), and (g)(14)(i). 
10 Form CMS-855B.  Accessed at http://www.cms.hhs.gov on October 13, 2009. 
11 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 10,  4.19.1(C).  
Accessed at http://www.cms.hhs.gov on February 3, 2011. 
12 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 10,  4.19.6(C).  
Accessed at http://www.cms.hhs.gov on February 3, 2011. 
13 42 CFR  410.33(g)(14). 
14 Preamble to final rule implementing sections of the Patient Protection and Affordable 
Care Act of 2010.  76 Fed. Reg. 5862, 5869 (Feb. 2, 2011).  
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Integrity Manual, when CMS conducts a site visit to verify the 
operational status of an IDTF, CMS should attempt to make its 
determination using only an external review of the IDTF.  CMS requires 
that reviewers document their visits using written observations of the 
facilities and photographs as appropriate.15   
CMS Administrative Actions 
CMS may take the following administrative actions against 
noncompliant or inactive providers, including IDTFs:  
  Investigation.  CMS investigations may include site visits and 

interviews with IDTF staff and Medicare beneficiaries, as well 
as analysis of claims data.   
  Prepayment review.  CMS reviews documentation from 

providers before deciding whether to pay claims. 
  Payment suspensions.  CMS may immediately suspend some or 

all payments to an IDTF if there is a credible allegation of fraud 
against that IDTF.16     
  Revocation.  CMS may revoke Medicare billing privileges for an 

IDTF that does not comply with Medicare standards.17  
Medicare should not pay for services provided after the date of a 
providers revocation.  If CMS determines that a provider is no 
longer operational, the date of revocation is the date of this 
determination.18   
  Deactivation.  CMS may deactivate a providers billing 

privileges when an IDTF has not submitted claims for 
12 consecutive months.19  This reduces the risk that the billing 
privileges associated with that providers identification number 
will be used for fraudulent purposes.   
   
 
15 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 15,  20.1.  Accessed 
at http://www.cms.hhs.gov on February 22, 2011. 
16 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 8,  8.3.1.1.  Accessed 
at http://www.cms.hhs.gov on August 16, 2011. 
17 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 15,  15.27.2(A).  
Accessed at http://www.cms.hhs.gov on January 31, 2011.  See also 42 CFR  424.535(a)(1). 
18 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 15,  15.27.2(B).  
Accessed at http://www.cms.hhs.gov on January 31, 2011.  See also 42 CFR  424.535(g). 
19 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 15,  15.27.1.  
Accessed at http://www.cms.hhs.gov on January 31, 2011.  See also 42 CFR  424.540(a). 
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I N T R O D U C T I O N  
South Florida High Risk Enrollment Project 
Concurrently with our review, CMS conducted a special projectthe 
South Florida High Risk Enrollment Projectthat targeted fraud 
among specific provider types that are vulnerable to abuse.  As part of 
the project, CMS conducted site visits to all IDTFs in South Florida to 
verify their existence.   
CMS used the results of these site visits, along with other information, 
to create a fraud-risk score for each IDTF.  IDTFs with high fraud-risk 
scores could be subject to a variety of administrative actions.  In some 
cases, CMS used evidence from the site visits to take action against 
noncompliant IDTFs. 
Related Work 
OIG is conducting a concurrent analysis of national IDTF claims data.  
This analysis identifies areas with high utilization of services provided 
by IDTFs, compares the patterns of IDTFs in these areas with the 
patterns of IDTFs nationally, and identifies IDTF claims with unusual 
characteristics. 
OIG also completed a companion report assessing IDTFs in the 
Los Angeles area, Los Angeles Independent Diagnostic Testing 
Facilities Compliance With Medicare Standards (OEI-05-09-00561). 
METHODOLOGY 
We performed unannounced site visits in May 2010 to all IDTFs with 
fixed practice locations in the MiamiMiami BeachKendall, FL Core 
Based Statistical Area (Miami area).  We determined whether these 
IDTFs complied with selected Medicare standards requiring IDTFs to 
be at the locations on file with CMS and to be open during business 
hours.  We also reviewed documentation about CMS actions against 
noncompliant IDTFs.  See Appendix B for a detailed description of our 
methodology. 
Scope 
We focused our review on IDTFs with fixed practice locations because it 
was not feasible to locate mobile or portable IDTFs for unannounced site 
visits.  Mobile or portable IDTFs do not provide services at one fixed 
location. 
We focused on IDTFs in the Miami area because this area was 
highlighted by concurrent OIG work as having in comparison to other 

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areas in the country both a high concentration of IDTFs and a high 

proportion of IDTFs with unusual billing patterns.   
We focused on IDTF standards 3 and 14, which require an IDTF to 
maintain a physical facility and to be accessible during regular posted 
business hours to CMS and beneficiaries.20  We focused on these 
standards to limit our interaction with IDTF staff and reduce the risk of 
alerting staff at potentially fraudulent IDTFs to our presence.   
Data Sources and Data Collection 
Identifying IDTF locations.  To identify IDTF locations for our Miami-area 
site visits, we first used the 2009 Part B National Claims History (NCH) 
file to identify IDTFs that submitted claims in 2009 for practice 
locations in the Miami area.  We then located addresses for all 
107 IDTFs with fixed practice locations through the Provider 
Enrollment, Chain, and Ownership System and a data request to CMS.   
Site visits to IDTFs.  We conducted unannounced site visits in  
May 2010 to determine whether these IDTFs maintained a physical 
facility at the location on file with CMS and were open during business 
hours.  We recorded all observations using a standard form.   
Updates after site visits.  To account for any changes in our information 
between the time when we identified our study population and the dates 
of our site visits, we requested address updates and changes in 
enrollment status from CMS for all IDTFs that we found to be 
noncompliant.   
CMS actions against noncompliant IDTFs.  To describe CMS actions 
against noncompliant IDTFs following our site visits, we requested the 
results of the special enrollment project through December 2010.  Along 
with these results, we received data about routine actions taken by 
CMS through December 2010 for these noncompliant IDTFs.   
Payments to noncompliant IDTFs.  We used the 2010 Part B NCH file to 
determine how much Medicare allowed for services reportedly provided 
by noncompliant IDTFs.  
Analysis 
Before analyzing our site visit results, we removed 15 IDTFs from our 
analysis.  Eleven of these were no longer enrolled in Medicare at the 
 
20 42 CFR  410.33(g)(3) and (g)(14). 
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I N T R O D U C T I O N  
time of our site visits.  We categorized four IDTFs as unable to 
determine.  Our analysis was performed on the remaining 92 IDTFs. 
Determining compliance.  We determined compliance with IDTF 
standards 3 and 14 in the following manner: 
  We determined that an IDTF was at the location on file with 

CMS if it maintained a physical facility with its name clearly 
marked somewhere other than a building directory (e.g., a sign 
on or near the primary entrance to the IDTF).   
  We determined that an IDTF was open if it was accessible to 

CMS and beneficiaries during regular business hours (i.e., the 
door was unlocked) during either of two visits on separate days. 
IDTFs that did not meet at least one standard were considered 
noncompliant for the purposes of this report. 
We aggregated the results of the site visits to determine the numbers of 
IDTFs that (1) maintained physical facilities at the locations on file with 
CMS and (2) were open during business hours.  We also categorized site 
reviewers observations about what was found (e.g., a sign with a 
different business name) at the locations on file with CMS.  
Payments to noncompliant IDTFs.  We calculated the total amount that 
Medicare allowed in 2010 for IDTFs that were not at the locations on 
file with CMS and for IDTFs that were not open.  For each IDTF, we 
also calculated the amount Medicare allowed in 2010 following our site 
visit (i.e., from the date of our last site visit through December 2010).  
In addition, we determined the number of noncompliant IDTFs that 
submitted claims representing services provided on the same dates that 
site reviewers visited their locations and the amount that Medicare 
allowed for such services. 
Review of CMS actions against noncompliant IDTFs.  We reviewed CMS 
actions against the noncompliant IDTFs identified by our site visits.  
We determined for how many IDTFs CMS took each type of action 
(e.g., prepayment review) and whether the actions resulted from the 
special enrollment project or from routine oversight.  We aggregated 
these results to determine the number of noncompliant IDTFs that CMS 
took action against after our site visits, as well as the number of 
noncompliant IDTFs that had been subject to each type of action.   
Further, we calculated the amount of time that CMS took to implement 
each revocation and determined whether the IDTF continued to receive 
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I N T R O D U C T I O N  
Medicare payments during the process.  Revocation was the only CMS 
action for which we completed this analysis because it is the only one for 
which we had relevant data.  To calculate how long CMS took to 
implement the revocation, we compared the date that CMS determined 
the IDTF was not compliant and the date that CMS finalized the 
revocation.  We then calculated the amount that Medicare allowed for 
claims representing services provided by the IDTFs between these 
dates.   
Limitations 
Because we reviewed compliance with only 2 of the 17 Medicare IDTF 
standards, we may be understating the number of noncompliant IDTFs 
in the Miami area.  IDTFs must meet all 17 standards to be eligible to 
bill Medicare for services.     
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors 
General on Integrity and Efficiency. 
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 F I N D I N G S  
Twenty-seven of the ninety-two Miami-area IDTFs  Twenty-seven of the IDTFs in the 
failed to comply with selected Medicare  Miami area were not at the 
locations on file with CMS or were 
standards 
not open during business hours.  
 
Medicare allowed $2.6 million for services provided by these IDTFs in 
2010, $1.5 million of which was allowed after our site visits.  An 
additional two IDTFs were open only during the second visits made to 
their locations.  We considered these IDTFs open for the purposes of this 
review. 
Twenty-three IDTFs were not at the locations on file with CMS   
After taking into account the IDTFs that submitted address updates to 
CMS, we found that 23 of the IDTFs that we visited did not maintain a 
facility at the location on file with CMS.  CMS requires all IDTFs to 
[m]aintain a physical facility.21  Medicare allowed $2 million for these 
23 IDTFs in 2010.   
As Table 1 shows, when site reviewers visited the locations on file with 
CMS, they found different businesses, unmarked office suites, and 
private residences with no indication that IDTFs were located there.  In 
four cases, the street addresses on file with CMS did not exist or the 
suite numbers on file with CMS did not exist at the given street 
addresses.  See Photo 1 for an example of an empty store front that site 
reviewers found at the location CMS had on file for one IDTF.   
 
Table 1  What OIG Found at Location on File 
Description of 
the locations on  Description  Number 
file with CMS for 
Sign with a different business name  9 
23 noncompliant 
IDTFs 
No sign indicating a business name  6 
 
Nonexistent address/suite  4 
Private residence with no sign indicating an IDTF  4 
Total  23 
  Source:  OIG unannounced site visits to IDTFs, May 2010. 
 
21 42 CFR  410.33(g)(3).   
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F I N D I N G S  
 
Photo 1       
No name was 
posted to indicate 
that an IDTF was 
operational at this 
location. 
 
    Source:  OIG unannounced site visits to IDTFs, May 2010. 
Four IDTFs were not open during business hours 
Four IDTFs maintained a visible sign at the location on file with CMS 
but were locked during business hours on 2 separate days.  CMS 
requires that each IDTF [b]e accessible during regular business hours 
to CMS and beneficiaries and [m]aintain a visible sign posting its 
normal business hours.22  Site reviewers visited three of the four IDTFs 
during their posted business hours.  The remaining IDTF did not have 
posted business hours and was visited during reasonable business hours 
(9 a.m. to 5 p.m.).  Medicare allowed almost $600,000 for these four 
IDTFs in 2010.   
Two additional IDTFs were locked during business hours on the first 
day we visited and open on the second day.  These IDTFs were 
considered open for the purposes of this report because they were open 
on the second visits.  However, these IDTFs may have been open on our 
second visits because they had become aware of our review.   
 
 
22 42 CFR  410.33(g)(14). 
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F I N D I N G S  
Fourteen noncompliant IDTFs submitted claims representing services 
provided on the dates of their site visits 
Fourteen of the noncompliant IDTFs submitted claims representing 
138 services performed on the same dates that site reviewers visited 
their locations.  Medicare allowed $16,000 for 102 of these services.  
Eleven of the fourteen IDTFs that submitted claims were not at the 
locations on file with CMS, and three were not open during business 
hours.  
The services reportedly performed on the same dates as OIGs site visits 
generally would have required a beneficiary to be physically present.  
The most common services billed on the dates of OIGs site visit were  
x-ray services and lung and vascular studies.   
Submitting claims representing services provided at a noncompliant 
location raises suspicion that these services may not have been 
legitimate.  These IDTFs may have changed locations without notifying 
CMS.  However, IDTFs that change locations without notifying CMS 
within 30 days are no longer compliant with all Medicare standards.   
CMS took action against 23 of the 
CMS took action against most of the 
27 noncompliant IDTFs in the 
noncompliant IDTFs as a result of a special 
months after we completed our 
enrollment project and routine oversight  site visits.  These actions included 
  investigation, prepayment review, 
revocation of billing privileges, and deactivation of billing privileges.  
More than half of these actions were because of the special enrollment 
project.  The rest were because of routine oversight that applies to all 
Medicare providers.  See Chart 1 for the actions CMS took against 
noncompliant IDTFs identified by this report.   
The special enrollment project resulted in actions against 13 noncompliant 
IDTFs 
As a result of the special enrollment project, CMS revoked the billing 
privileges of 10 noncompliant IDTFs and monitored 3 others with 
prepayment review.  During the project, CMS conducted site visits to 
Medicare providers in South Florida, including IDTFs.  As a result of 
this project, CMS took action against 13 noncompliant IDTFs that may 
not have been identified through routine oversight.   
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F I N D I N G S  
Chart 1    14
CMS actions 
12
against 
noncompliant 
s 10
IDTFs  n
o
ti
  c
A
S  8
M
C
of  6 Special Enrollment Project
r 
e Routine Oversight
b
m
u 4
N
2
0
Prepayment  Revocation Deactivation Investigation
review
  Source:  CMS actions against IDTFs, May 2010. 
 
Routine CMS oversight resulted in 10 actions against noncompliant IDTFs 
CMS revoked the billing privileges of two IDTFs, deactivated the billing 
privileges of six IDTFs, and investigated two others as a result of 
routine oversight.  CMS revoked the billing privileges of two providers 
that submitted updated applications, but did not pass the application 
review.  CMS deactivated the billing privileges of six IDTFs that had 
not submitted claims in the previous 12 months.  In addition, CMS 
investigated two IDTFs. 
CMS took no actions against four noncompliant IDTFs  
CMS determined that no action was needed for the remaining 
four noncompliant IDTFs.  After the OIG site visits, CMS visited these 
four IDTFs as part of the special enrollment project and found them to 
be operational.   
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  12   
F I N D I N G S  
Three IDTFs against which CMS took action  Medicare continued to pay 3 of the 
12 IDTFs while the revocations of 
received Medicare payments while CMS was 
their billing privileges were being 
revoking their billing privileges 
finalized.23  CMS took an average 
of 17 weeks to finalize these three 
revocations. 
 Between the time when CMS determined that these three IDTFs were 
noncompliant and the time when the revocations were finalized, 
Medicare allowed $146,000 for claims representing services provided by 
these IDTFs.  Most of this amount was for a single IDTF whose billing 
privileges were revoked 6 months after CMS determined that the IDTF 
was noncompliant.  Medicare allowed $145,000 for 883 services for this 
IDTF in that time period. 
The remaining two IDTFs were allowed just over $1,000 for claims 
submitted while the revocations were being finalized.  One of these 
IDTFs received frequent payments for low-cost services.  This IDTF was 
paid for 199 services over 14 weeks while the revocation was processed.  
The other IDTF was paid for two services over 12 weeks while the 
revocation was processed. 
 
   
 
23 CMS revoked the billing privileges of 12 IDTFs.  Ten revocations were based on special 
enrollment project site visits and two were based on routine oversight.  
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  13   
 R E C O M M E N D A T I O N S  
Twenty-seven of the ninety-two IDTFs in the Miami area did not comply 
with selected Medicare standards.  Twenty-three of these noncompliant 
IDTFs were not found at the locations on file with CMS and four were 
not open during business hours.  Fourteen of these noncompliant IDTFs 
submitted claims representing services provided on the same dates that 
OIG site reviewers visited their locations. 
CMS also identified noncompliant IDTFs in the Miami area and was 
able to remove or monitor many of them.  CMS actions included 
revocation of billing privileges, deactivation of billing privileges, 
prepayment review, and investigation.  Three of the IDTFs continued to 
receive payments while their billing privileges were being revoked.   
These findings indicate that further actions are needed to protect the 
integrity of the Medicare program and protect beneficiaries from 
potentially fraudulent IDTFs.  Therefore, we recommend that CMS: 
Periodically conduct unannounced site visits to IDTFs  
CMS advocates the use of unannounced postenrollment site visits to 
determine whether providers are operational.  Periodically conducting 
nationwide unannounced site visits to IDTFs may enable CMS to 
identify and remove nonoperational IDTFs from the program and 
potentially reduce erroneous Medicare payments.  CMS could focus 
unannounced site visits on high-risk areas or base them on fraud-risk 
assessments. 
Immediately stop payments to noncompliant IDTFs whose billing privileges 
are being revoked 
CMS should stop payments for any services delivered on or after the 
dates that CMS identified the IDTFs as noncompliant.  Currently, CMS 
may continue to pay providers between the time when they are 
determined to be noncompliant and the time when the revocations of 
their billing privileges are finalized.  These payments should be 
retroactively recouped; however, previous OIG work demonstrates that 
many Medicare overpayments are not recovered.24  If CMS immediately 
stops payments while concurrently pursuing appropriate actions against 
noncompliant IDTFs, it will help avoid loss of Medicare funds.   
 
24 OIG, Collection Status of Medicare Overpayments Identified by Program Safeguard 
Contractors, OEI-03-08-00030, May 2010.   
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  14   
R E C O M M E N D A T I O N S  
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
CMS concurred with our recommendations.  In response to our first 
recommendation, CMS stated that it anticipates increasing the 
frequency of unannounced site visits to IDTFs.  CMS plans to compare 
IDTF enrollment information with public records to identify potential 
changes to enrollment information that would warrant further 
investigation.  In response to our second recommendation, CMS stated 
that it is exploring options to use payment suspensions in conjunction 
with revocation actions for providers and suppliers that are found to be 
nonoperational.  We did not make any changes to the report based on 
CMSs comments.  For the full text of CMSs comments, see Appendix C. 
   
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  15   
 A P P E N D I X ~ A  
Independent Diagnostic Testing Facility Standards25 
The [independent diagnostic testing facility (IDTF)] must certify in its 
enrollment [application] that it meets the following standards and 
related requirements: 
(1) Operates its business in compliance with all applicable Federal and 
State licensure and regulatory requirements for the health and safety of 
patients. 
(2) Provides complete and accurate information on its enrollment 
application.  Changes in ownership, changes of location, changes in 
general supervision, and adverse legal actions must be reported to the 
Medicare fee-for-service contractor on the Medicare enrollment 
application within 30 calendar days of the change.  All other changes to 
the enrollment application must be reported within 90 days. 
(3) Maintain a physical facility on an appropriate site.  For the purposes 
of this standard, a post office box, commercial mailbox, hotel, or motel is 
not considered an appropriate site. 
(i) The physical facility, including mobile units, must contain space 
for equipment appropriate to the services designated on the 
enrollment application, facilities for hand washing, adequate 
patient privacy accommodations, and the storage of both business 
records and current medical records within the office setting of the 
IDTF, or IDTF home office, not within the actual mobile unit. 
(ii) IDTF suppliers that provide services remotely and do not see 
beneficiaries at their practice location are exempt from providing 
hand washing and adequate patient privacy accommodations. 
(4) Has all applicable diagnostic testing equipment available at the 
physical site excluding portable diagnostic testing equipment.  The 
IDTF must 
(i) Maintain a catalog of portable diagnostic equipment, including 
diagnostic testing equipment serial numbers at the physical site; 
(ii) Make portable diagnostic testing equipment available for 
inspection within 2 business days of a [Centers for Medicare & 
Medicaid Services (CMS)] inspection request. 
 
25  These standards are taken verbatim from 42 CFR  410.33(g). 
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  16   
A P P E N D I X ~ A  
(iii) Maintain a current inventory of the diagnostic testing 
equipment, including serial and registration numbers and provide 
this information to the designated fee-for-service contractor upon 
request, and notify the contractor of any changes in equipment 
within 90 days. 
(5) Maintain a primary business phone under the name of the 
designated business. The IDTF must have its 
(i) Primary business phone located at the designated site of the 
business or within the home office of the mobile IDTF units. 
(ii) Telephone or toll free telephone numbers available in a local 
directory and through directory assistance. 
(6) Have a comprehensive liability insurance policy of at least $300,000 
per location that covers both the place of business and all customers and 
employees of the IDTF.  The policy must be carried by a 
nonrelative-owned company.  Failure to maintain required insurance at 
all times will result in revocation of the IDTFs billing privileges 
retroactive to the date the insurance lapsed. IDTF suppliers are 
responsible for providing the contact information for the issuing 
insurance agent and the underwriter.  In addition, the IDTF must 
(i) Ensure that the insurance policy [...] remain in force at all 
times and provide coverage of at least $300,000 per incident; and 
(ii) Notify the CMS designated contractor in writing of any policy 
changes or cancellations. 
(7) Agree not to directly solicit patients, which include[s], but is not 
limited to, a prohibition on telephone, computer, or in-person contacts.  
The IDTF must accept only those patients referred for diagnostic testing 
by an attending physician, who is furnishing a consultation or treating a 
beneficiary for a specific medical problem and who uses the results in 
the management of the beneficiarys specific medical problem.  
Nonphysician practitioners may order tests as set forth in [42 CFR] 
 410.32(a)(3). 
(8) Answer, document, and maintain documentation of a beneficiarys 
written clinical complaint at the physical site of the IDTF[.]  (For mobile 
IDTFs, this documentation would be stored at their home office.) This 
includes, but is not limited to, the following: 
(i) The name, address, telephone number, and health insurance 
claim number of the beneficiary. 
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  17   
A P P E N D I X ~ A  
(ii) The date the complaint was received; the name of the person 
receiving the complaint; and a summary of actions taken to resolve 
the complaint. 
 
(iii) If an investigation was not conducted, the name of the person 
making the decision and the reason for the decision. 
(9) Openly post these standards for review by patients and the public. 
(10) Disclose to the government any person having ownership, financial, 
or control interest or any other legal interest in the supplier at the time 
of enrollment or within 30 days of a change. 
(11) Have its testing equipment calibrated and maintained per 
equipment instructions and in compliance with applicable 
manufacturers[] suggested maintenance and calibration standards. 
(12) Have technical staff on duty with the appropriate credentials to 
perform tests. The IDTF must be able to produce the applicable Federal 
or State licenses or certifications of the individuals performing these 
services. 
(13) Have proper medical record storage and be able to retrieve medical 
records upon request from CMS or its fee-for-service contractor within 
2 business days. 
(14) Permit CMS, including its agents, or its designated fee-for-service 
contractors, to conduct unannounced, on-site inspections to confirm the 
IDTFs compliance with these standards. The IDTF must 
(i) Be accessible during regular business hours to CMS and 
beneficiaries; and 
(ii) Maintain a visible sign posting its normal business hours. 
(15) With the exception of hospital-based and mobile IDTFs, a 
fixed-base IDTF is prohibited from the following: 
(i) Sharing a practice location with another Medicare-enrolled 
individual or organization; 
(ii) Leasing or subleasing its operations or its practice location to 
another Medicare-enrolled individual or organization; or 
(iii) Sharing diagnostic testing equipment used in the initial 
diagnostic test with another Medicare-enrolled individual or 
organization. 
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  18   
A P P E N D I X ~ A  
 
(16) Enrolls for any diagnostic testing services that it furnishes to a 
Medicare beneficiary, regardless of whether the service is furnished in a 
mobile or fixed base location. 
(17) Bills for all mobile diagnostic services that are furnished to a 
Medicare beneficiary, unless the mobile diagnostic service is part of a 
service provided under arrangement as described in section 1861(w)(1) 
of the [Social Security] Act. 
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  19   
A P AP EP NP DE INXD~ I BX  ~ B  
Detailed Methodology 
We conducted unannounced site visits to all Independent Diagnostic 
Testing Facilities (IDTF) with fixed practice locations in the  
MiamiMiami BeachKendall, FL Core Based Statistical Area (Miami 
CBSA) to determine whether they complied with selected Medicare 
standards.  Specifically, we determined whether each IDTF was at the 
location on file with the Centers for Medicare & Medicaid Services 
(CMS) and was open during business hours.  We then reviewed 
documentation about CMS actions against the noncompliant IDTFs and 
determined how much money Medicare allowed for services reportedly 
provided by these IDTFs in 2010. 
Scope 
We focused our review on IDTFs that submitted claims for Medicare 
payment in 2009 to concentrate our visits on IDTFs with recent activity 
in the Medicare program.  At the time we developed our study 
population, data on claims from 2009 were the most recent available. 
Data Sources and Data Collection 
Identifying IDTF locations.  We identified IDTFs that submitted claims in 
2009 using the specialty code and provider identification numbers 
(provider ID) fields in the 2009 Part B National Claims History (NCH) 
file.  We counted each provider ID that had only claims with the 
specialty code 47 as an IDTF.  We determined the CBSA to which each 
IDTF belonged by matching the ZIP Code field from the NCH with the 
ZIP Codes corresponding to each CBSA.  We then selected the IDTFs in 
the Miami CBSA. 
We located an address for each IDTF in the Miami CBSA with a fixed 
practice location using a combination of two sources.  Our primary 
source was the practice location field from the Provider Enrollment, 
Chain, and Ownership System (PECOS).26  Most, but not all, IDTFs 
have enrollment information, such as their practice locations, stored in 
PECOS.27  When an IDTF did not have an address in PECOS, we 
 
26 PECOS is the system of record for Medicare provider enrollment information.  PECOS 
is populated based on the initial provider enrollment application and updated any time a 
provider submits an updated application to CMS.   
27 An IDTF that enrolled before 2004 and has not submitted an updated application may 
not have an enrollment record in PECOS. 
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  20   
A P P E N D I X ~ B  
requested this information from CMS.  This process resulted in 
addresses for 107 IDTFs in the Miami CBSA.28 
Site visits to IDTFs.  We conducted unannounced site visits to these 
107 IDTFs to determine whether they were at the locations on file with 
CMS and were open during business hours.  We recorded all 
observations using a standard form.  We conducted all site visits from 
May 17 through May 28, 2010.  
We designed our site visit protocol to ensure that we gave providers the 
benefit of the doubt when determining whether they complied with 
Medicare standards.  For example: 
  All visits to IDTFs were made during posted business hours if 

hours were posted or during reasonable business hours (9 a.m. 
to 5 p.m.) if none were posted. 
  If an IDTF was locked, we made a second visit to that location 

on a different day.  We considered IDTFs to be open if they were 
open on either the first visit or (if applicable) the second visit. 
  When the building at an IDTFs location on file with CMS was a 

multisuite office building, site reviewers searched for the IDTF 
by name as well as by suite number.  We considered the IDTF to 
be at the location on file with CMS if site reviewers could find it 
in any suite or office space in the building. 
  If an IDTF had a sign posted indicating that visitors should ring 

a buzzer or doorbell to enter the facility, site reviewers did so.  If 
the door was opened (e.g., someone came to the door or the lock 
was released), we considered the IDTF to be open. 
  If an IDTF had a sign posted indicating that services were 

available by appointment only, a site reviewer attempted to 
make an appointment for services with that IDTF (e.g., called 
the phone number listed on the sign).  If the site reviewer was 
able to make an appointment, we considered the IDTF to be 
open. 
  If we found a different business name at the IDTF location on 

file with CMS, we attempted to determine whether the IDTF we 
were looking for was operating under the name we found.  First, 
 
28 One IDTF with claims in 2009 was not identified either by PECOS supplier type or by 
CMS as being an IDTF.  We removed this IDTF from our analysis. 
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  21   
A P P E N D I X ~ B  
 
we requested from CMS all names for IDTFs that we did not 
find and reviewed this information to ensure that we captured 
all possible aliases.  Second, as a final check, we reviewed public 
Web sites, including the National Provider Identifier registry, to 
determine whether the IDTF we were looking for could be 
operating under the name we found.  If we were able to connect 
the two names, we categorized the IDTF as being at the location 
on file with CMS.   
CMS actions against noncompliant IDTFs.  Data received from the South 
Florida High Risk Enrollment Project (special enrollment project) 
through December 2010 included: 
  administrative actions taken against noncompliant IDTFs, the 

source of these actions (i.e., special enrollment project activity 
or routine oversight), the effective dates of these actions, and 
the dates these actions were finalized by CMS; and 
  dates and results of all special enrollment project site 

verification visits and in-depth investigations. 
Analysis 
Updates after site visits.  CMS indicated that nine IDTFs had their 
billing privileges deactivated and two IDTFs had their billing privileges 
revoked before the dates of our site visits.  We removed these 11 IDTFs 
from our analysis.  
IDTFs categorized as unable to determine.  We removed four IDTFs 
from our analysis because we were unable to complete the full site visit 
protocol or were unable to access the door of the reported practice 
location.   
 
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  22  A  P  PEN  D  x  c 

Agency Comments 
. 
/,.....VIC~_~ 	
~	
( ,,5'r DEPARTMENT OF HEALTH & HUMAN SERVICES  Centers lor Medicare & Medicaid SOIVIc&s
Admiflist1'ator 
Washington, DC 20201 
JUL 2 6 2011
DATE: 
TO: 	 Daniel R. Levinson 

Inspector General 

FROM: 	 Donald M. Berwick, M.D. 

Administrator 

SUBJECT: 	 Office ofInspector General (OIG) Draft Report: "Miami Independent Diagnostic 
Testing Facilities' Compliance with Medicare Standards" (OEI.05-09-00560) 
The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and 
comment on the Office of Inspector General (OIG) draft report entitled, "Miami Independent 
Diagnostic Testing Facilities' Compliance with Medicare Standards." The purpose of this report 
is two-fold. First, it seeks to determine whether Independent Diagnostic Testing Facilities 
(IDTFs) in the Miami area complied with selected Medicare standards requiring IDTFs to be at 
the location on file with CMS and open during business hours. Secondly, it describes CMS 
actions against IDTFs that did not comply with these selected Medicare standards. 
IDTFs offer diagnostic services and are independent ofa physician'S office or hospital. 
According to OlG's report, Medicare paid almost $1 billion for IDTF claims for 2.4 million 
beneficiaries in 2010, Qfthis, $23.4 million was for claims by IDTFs in the Miami area. 
Medicare standards indicate that IDTFs must maintain a physical facility at the location on file 
with CMS and be open during business hours. IDTFs that do not comply with Medicare 
standards are subject to a variety ofadministrative actions, inclUding revocation of their billing 
privileges. 
The Affordable Care Act strengthens the focus on the integrity of the Medicare, Medicaid, and 
Children's Health Insurance Program (CHIP) programs and provides important new tools to 
combat fraud and abuse, including enhanced provider and supplier screening requirements; 
authority to suspend payments pending investigations ofcredible allegations of fraud; and, when 
necessary, authority to impose moratoria on new providers and suppliers. 
IDTF services have historically been vulnerable to abuse. As such, CMS is taking additional 
steps to address potential vulnerabilities in the enrollment and claims payment process for this 
supplier group using the authorities granted under the Affordable Care Act. Under the new 
oE10 5-09-00 560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES' COMPLIANCE WITH MEDICARE STANDARDS  23   
A P P E N D I X   ~   C  
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  24   
 A P P  E N D I X   ~   C  
   
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  25   
 A C K N O W L E D G M E N T S  
This report was prepared under the direction of Ann Maxwell, Regional 
Inspector General for Evaluation and Inspections in the Chicago 
regional office, and Thomas Komaniecki, Deputy Regional Inspector 
General.   
Laura Kordish served as the team leader for this study, and Lisa Minich 
and Mara Werner served as lead analysts.  
We would also like to acknowledge the contributions of Office of 
Evaluation and Inspections central and regional offices.  Contributing 
staff from these offices include Melissa Baker, Tim Chettiath, 
Ben Dieterich, Kevin Farber, Robert Gibbons, Jennifer Gist, 
Rose Goldberg, Melissa Hafner, Scott Horning, Maria Maddaloni, 
Dan Mallinson, Kevin Manley, Conswelia McCourt, Beth McDowell, 
Jeremy Moore, Christine Moundas, Brian Pattison, Margo Rodriguez, 
Megan Ruhnke, Rachel Siman, Arianne Spaccarelli, Mark Stiglitz, 
Holly Williams, and Chetra Yean. 
  OEI-05-09-00560  MIAMI INDEPENDENT DIAGNOSTIC TESTING FACILITIES COMPLIANCE WITH MEDICARE STANDARDS  26    
 
 
Office of Inspector General 
http://oig.hhs.gov 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 
audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying 
out their respective responsibilities and are intended to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and 
mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud, waste, or abuse and promoting 
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 
of fraud and misconduct related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI utilizes its resources 
by actively coordinating with the Department of Justice and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to criminal 
convictions, administrative sanctions, and/or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support for OIGs internal operations.  OCIG represents OIG in all civil and 
administrative fraud and abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program guidance, publishes fraud alerts, and provides other 
guidance to the health care industry concerning the anti-kickback statute and other OIG 
enforcement authorities.