:, 
QUALITY ASSURANCE 

INDEPENDENT PHYSIOLOGICAL

lABORATORIES

tIlVICES'. 
UJ' 
'0 
..1t cl3C 
OFFICE OF INSPECTOR GENERAL 
OFFICE OF EVALUATION AND INSPECTIONS 
OCTOBER 1990  QUALITY ASSURANCE 

INDEPENDENT PHYSIOLOGICAL

LABORATORIES

~ c;tIlVI  ES'. UJ' 
..1t~clia 
OFFICE OF INSPECTOR GENERAL 
OFFICE OF EVALUATION AND INSPECTIONS 
OCTOBER 1990  QUALITY ASSURANCE 

INDEPENDENT PHYSIOLOGICAL

lABORATORIES

Richard P. Kusserow 
INSPECTOR GENERAL 
OEI-03.88.01400  OCTOBER 1990  EXECUTIVE SUMMARY 
PURPOSE 
The purpose of this inspection was to assess quality assurance in Independent Physiological 
Laboratories (ILs) by examining thee aspects of the industr: regulation, personnel 
qualifications, and equipment stadads. 
BACKGROUND 
Medicare coverage for IPLs was established in Januar 1979 when the Health Cae Financing 
Administration s (HCFA) Offce of General Counsel (OGC) determined that IPL services 
qualified for reimbursement under TItle XVIII of the Social Security Act. The OGC ruling 
said IPL services qualified for Medicare Par B reimbursement if (1) the laboratory meets all 
State and local licensure requirements, (2) the diagnostic services ar ordered by a referrng 
physician, and (3) the services are determined to be reasonable and necessar by the Medcare 
carer. 
Pror to the OGC ruling, HCFA policy disqualfied IPLs because they had to be certified for 
Medicare parcipation and conditions for parcipation had not been established. These 
standards still have not been developed. 
The HCFA defines IPLs as "  .laboratories operating independent of a hospital, physician 
offce, or rura clinic.... " Tests IPLs typicaly conduct include ultrasound, pulmonar function 
cardiac monitorig, and a varety of other diagnostic procedures. 
METHODOLOGY 
We collected information from four sources: (1) State agencies and health deparents, (2) 
health care and IPL industr experts, (3) a random selection of IPLs, and (4) Medcare carers. 
FINDINGS 
Independent Physiological Laboratory " is Unclear 
The Definition of "
No uniform definition exists of "physiological" as it relates to IPLs. The HCFA has never 
clarfied types of covered IPL tests, acceptable testing sites  or standards and conditions of 
coverage for each test, thus fostering confusion among IPLs and carers. 
Perfonnance Exists 
No Assurance Of Satisfactory  IPL 
We found no uniform and acceptable set of national standards defining satisfactory IPL 
performance. Specifcally, the industr lacks (1) Federal or State oversight of IPL activities,  (2) uniform testing standards or quality control measures, and (3) standads regarding operator 
training and qualifications. 
Concerns About IPLPerformance Are Pervasive 
Nearly 78 percent of the respondents who voiced definitive opinions expressed serious 
concerns about the quality and accuracy of IPL services. The major reason cited for these 
concerns was lack of regulating IPL operations. 
RECOMMENDATIONS 
The HCFA should issue Medicar coverage guidelines and instrctions clarfying (1) 
ar 
what the term "physiological" means with respect to IPLs, (2) what tests IPLs  al
lowed to perform , and (3) what testing sites ar permissible. 
The HCFA should promote stronger quality assurance in IPLs though regulation or cer
tification. This could be accomplished though anyone or a combination of the follow
ing options: (1) Federal regulation, (2) State regulation, or (3) an independent 
certfication progr. The cost of such regulation or certfication should be financed by 
provider fees. Elements common to each option include "a quality control program, wrt
ten testing stadards, and creentialng staf or equivalent stadads. 
COMMENTS AND OIG RESPONSE 
Comments were received from both the Public Health Service (PHS) and HCFA. Although 
PHS expressed support for stronger quality assurance in IPLs, they felt our respondents were 
unaware of Foo and Drug Administration safeguards to assure the safety and effcacy 
diagnostic equipment. The HCFA felt our report failed to provide convincing evidence to 
justify our recommendations, and they have initiated an independent review of IPLs to 
determine if standards should be developed. 
We acknowledge the Foo and Drug Administrtion s effort in equipment safety and 
effectiveness, but we believe regulation or certifcation of the service itself would promote 
stronger quality assurance. In response to HCFA' s comments, we feel the continued lack of 
quality assurance in IPL services is untenable and urge implementation of our 
recommendations. However, we have modifed the recommendation to alow grater 
flexibility in achieving this result.  ..... ..... ...........  .............  ...... .. ..... ...... ............   .............  ... .................   ... 
......................  ............ ................... ..............  .............  ......... ...........  ..... ........... ............ ...... ....... ... .............
TABLE OF CONTENTS 
EXECUTIVE SUMMARY 
NTRO D U CTIO N 

...................... 1
FI N DI N G S........ 

R E CO M M EN DATI 0 NS . ................ ...... ..... ........... ..... ....... .....  ................. 12
CO M M E NTS ............ ... ........ .... ......... .... .......  .................... 14
APPENDIX  ... g., 
INTRODUCTION 
BACKGROUND 
The Health Car Financing Admnistration (HCFA) defmes independent physiological 
laboratories (IPLs) "  as laboratories operating independent of a hospital, physician s office or 
rural clinic." Pror to Januar 1979, Medcar did not cover services provided by IPLs. 
Medicare disqualified IPLs because they lacked certfication and conditions for paricipation 
of these entities had not been established. Reimburement was prohibited whether IPLs 
submitted claims for their services dictly to Medicar Par B carers or the charges were 
included in physicians ' clais. 
Coverage was established when the HCFA Offce of Genera Counsel (OGC) determned that 
IPL services qualifed for reimbursement under section 1861(S)(3) of Title XVIII of the Social 
Security Act. According to the OGC ruling, IPL services qualifed for Medicare Par B 
reimbursement if (1) the laboratory meets al State and local licensure reuirements, (2) the 
diagnostic services are ordered by a referrng physician, and (3) the services are determned to 
carer. 
be reasonable and necessar by the Medcare 
Typical IPL services include ultrasound, pulmonar function tests, cardiac monitorig, and a 
varety of other diagnostic procedurs. These tests differ from those performed by 
independent clinical laboratories (ICLs) in that bodly functions ar teste (e.  bloo flow

lung capacity, hear rate) rather than bodly fluids or tissues (e.  , bloo, urine, Pap smear). 
The IPL procedures requir the patient s presence whereas clinical laboratory tests are 
performed on a sample taen from the patient. Typically, procedures are performed in a 
varety of locations including frestanding centers, offce space rented from physicians, and 
mobile units. 
Ultrasound devices are used to depict a patient s internal organs by sending high-energy 
sound-waves into the body producing echoes as they encounter diferences in tissue strcturs. 
The data produced by the echoes can be trsmitted into an image, which can be shown on a 
video scren or recorded on tape. Images can be recorded in color as well as black and white. 
ide range of specialties, such as cardiology,
Health care practitioners use ultrasound in a 

gynecology, and vascular surgery. Typically, the tests ar conducted by specially trained 
individuals known as ultrasonographers or, more commonly, sonogrphers. 
Cardiac monitoring is a diagnostic technique which records a patient s cardiac activity during 
hear 
extended periods of time. This procedure can pinpoint cardiac irgularties, or even a 
attack, of which the patient may not be awar. Cardiac recorders are small, lightweight 
devices with electrodes fastened to the patient s body. All cardiac activity is recorded on tape 
which can be evaluated by a cardiologist or sent to an IPL which specializes in ardiac 
analysis.  Regulation of clinical testing began with TItle XVIII of the Social Securty Act which imposed 
standards and conditions of coverage on clinical laboratories under the Medicare and 
Medicaid programs. In 1967, Congrss passed the Clinical Laboratory Improvement Act 
(CLIA) to regulate the interstate activities of independent clinical laboratories (lCLs). 
certn 
Congress strngthened CLIA in 1988 with amendments which mandated standads in 
kinds of testing. In 1981 , Congrss passed the Consumer-Patient Radiation Health and Safety 
Act. This law established minimum standads for State accrtation of radiologic educational 
programs and State certification or licensure of persons who conducted tests using radiant 
energy. 
No Federal laws exist which regulate the perfonnance of noninvasive physiological testing. 
Severa Federal laws and State statutes have been enacted to regulate clinical and radiant 
ar 
testing. The IPLs which engage in such tests  subject to regulation of those aspects of their 
operations. However, the regulation does not extend to any noninvasive physiological tests 
conducted by IPLs. 
This inspection was originally suggested by HCFA. They raised concerns about the 
perfonnance of IPLs because of the lack of regulations and what they perceived as 
inconsistent practices by carers regarding IPL operations. 
A May 1989 OIG report entitled, "Financial Argements Between Physicians and Health 
Care Businesses" (OAI -12-88-01410), detas effects of physician ownership and 
compensation arngements with health care entities, including IPLs. This study indicated 
that IPLs operated with little or no regulation or stadads imposed by either government or 
the IPL industr itself. As a result, many health care experts and organizations expressed 
concerns about IPLs and the quality of their diagnostic testing services. Accordingly, we 
decided to conduct a study focused on regulation of IPLs. 
During 1987, Medicar paid approximately $290 millon in Par B reimbursements for 
noninvasive diagnostic testing. Although IPLs perform a varety of procedurs, 
tests-Holter monitoring, abdominal ultrasound and peripheral vascular studies-accounted 
for about two-thirds of these reimbursements. In 1987, a tota of 1,674 IPLs had Medcar 
provider numbers. 
PURPOSE 
The objectives of this inspection were 
to determine the nature and extent of regulatory practices regarding IPLs and the 
services they provide; 
to determine the qualifications of personnel who conduct tests and the perceived effect 
on the accuracy of testing if such qualifications appear to be lacking; and  to assess the integrty of testing in IPLs by examining practices and standads related to 
physiological equipment. 
METHODOLOGY 
We obtaned information frm a varety of sources. These sources included State agency and 
health deparent offcials, health care and IPL industr experts, a radom selection of IPLs, 
and Medicar carers.

We collected infomiation from 68 State agency and health deparent representatives in all 50 
States and the Distrct of Columbia. These contacts were designed to determne the existence 
IPL operations. In some cases, we were 
of any present or planned State laws afecting 
referred to additional agencies in the State. 
We obtaned information frm a wide varety of health car experts and organiztions. We 
based selections on their knowledge of the IPL industr. Included among these contacts were 
a number of manufacturers of noninvasive diagnostic equipment tyicaly used in IPLs. 
Health care organizations and associations providing information and material included the 
American College of Cardiology, the American College of Radiology, the Joint Commssion
Manufacturrs
on Accreditation of Healthcare Organizations, the National Electrcal 

Association, and the American Institute of Ultrasound in Medcine. (See the appendix for a 
complete listing of organizations and associations contacted. 
We contacted a sample of IPLs to ascenai the day-today operations of these entities, 
concentrting on types of diagnostic tests performed, where perfonned, and kinds of 
their operations by a State 
equipment used. Other areas reviewed includoo any regulation of 
or other governmental agency, staf qualfications and trning, and quality contrl practices. 
A tota of 35 IPLs in 8 randomly-selected Medcare carer servce aras were contacte. The 
eight carers selected were Travelers of Connecticut; Empire Blue Shield of New York; 
Nationwide of West VIrginia; Blue Shield of Florida; Blue Shield of Michigan; Blue Shield of 
The carers accounted

Kansas City; Blue Shield of Arkansas, and Occidental of Calfornia. 
Medcar payments for Par B services in 1986. We also 
for approximately 30 percent of tota 
contacted each carer to determine if it had any special policies to monitor the activities of the 
IPLs in its coverage area.  ...
FINDINGS 
The Definition of "Independent Physiological Laboratory" is Unclear 
No unifonn definition exists of "physiological" as it relates to IPLs. The HCFA has never 
covered IPL tests, acceptable testig sites, or stadads and conditions of 
clarfied types of 
carers. 
coverage of each test. This has fostered confusion among IPLs and 
We encountered a diverse aray of entities operating as IPLs. These ranged from large 
corporations conducting a multitude of diagnostic testing to sole ownership enterprises 
performng an occasional EKG. Equipment ra the gamut from a $100 bloo pressure cuff to 
almost a milion-dollar magnetic resonance imagig (MI) device. A wide varety of IPL 
types were categorized by testing sites. Moreover, despite HCFA' s defmrituion  of an IPL as a 
laboratory operating "  .independent of a hospita, physician s office, or  health clinic... 
we found a number of IPLs conducting tests in hospita settings and in physicians ' offces. 
The HCFA's guidelines provided no  the tests could be perfonned or exactly
diction on  where 
what was meant by the phrse, "  operating independent... 
On the advice of a medcal consultant, we intended to exclude from this study any diagnostic 
harul 
services which were invasive or potentially  to a patient. Thus, we proceeded on the 
basis that invasive and radiant tests, such as bloo tests and x-rays, were not "physiological" 
tests and would not be included in our study. However, we leared that many IPLs were 
even though a fonn of 
conducting these tests. We included ultrasound as a noninvasive test 
radiation is used in the procedure. The tye of radiation used, however, is "non-ionizing" and 
is considered to be harless to the patient. 
In 1979, when OGe determned that IPL services qualified for coverage, the only 
requirements were the three stipulations referred to previously (see Introduction). In its 
decision, OGC did not offer a definition of the term, "physiological." It did, however, cite 
two noninvasive services as examples of the types of tests for which payment could be made: 
The OGC opinion further 
electrocardiographs (EKGs) and electroencephalogram (EEGs). 
Carers shall advise all affected independent laboratories that HCFA is studying the 
noted, "
type of services furnished by these independent laboratories and that standards and conditions 
for coverage of some or all of these services may be published by regulation. 
To date, an elaboration of those "standas and conditions" has not been delineated, either in 
regulations or in HCFA guidelines. As a result, considerable confusion exists with regard to 
defming an IPL, tests permitted, and IPL qualifcations. 
One carer indicated it would issue an IPL provider number to an entity which. did clinical 
and radiant testing. Another said it would attempt to categorize the entity as a physician 
office and issue a provider number accordingly.  One carer asked its HCFA regional offce to clarfy the kinds of tests which IPLs could 
perform. The carer noted that IPLs in its service ara were conducting the following tests: 
doppler flow studies, ultrasounds, EKGs, EEGs, pulmonar function tests, MRIs, and 
computerize axial tomogrphy (CAT) scans. 
The regional offce responded that a specific list of such services has never existed, other than 
furer  The responsibilty for 
the reference to EKGs and EEGs. The response  noted: "
defining the tests included has been left to the Medcare carers. A practical defmition might 
be that any test which is a clinical laboratory or radological test cannot be considered as a 
physiological test. To that extent, we would disagr with your inclusion of cat scans as being 
physiological, since we consider them to be a radiological proedure. 
Our study encountered a bewildering varety of entities. Some actual examples: 
One of the IPLs we interviewed conducted ultrasound tests, mammographies, and tests 
involving nuclear medicine. 
A representative of a chain of diagnostic testing centers advised us that his centers were 
strctured as physicians' offces rather than IPLs in order to bypass restrctive laws in 
the States where his centers were located. 
One durable medical equipment company had to obtan an IPL provider number 
because it occasionaly perfonned EKGs. In 1988, the company had perfonned only 
four EKG tests. 
s a "middleman" by obtaining referrs from 
One IPL defied description. It acted 

physicians and contrcting out thos  referrals to an IPL. The company itself maintaned 
no staff or equipment. 
We attempted to characterize each of the 35 IPLs contacted accordig to types of tests 
performed, testing locations, and physician-diected or not. We classified the tyes of tests 
into four categories: (1) one tye of noninvasive test only (such as a cardiac monitor), (2) 
both invasive and noninvasive tests conducted, (3) both radiological and noninvasive tests 
conducted (such as mammogr and ultrasound), and (4) multiple noninvasive tests (such as 
ultrasound and pulmonar function).  SUMMARY OF IPL CONTACTS 
TYPES OF TESTS 
NUMBER OF IPLS
One tVDe onlv 
Invasive & noninvasive 
Radiolo  ical & noninvasive 
MultiDle noninvasive 
TESTING LOCATIONS 
StationaI 
Mobile onlv 
Mobile & stationar 
HosDital settin 
ORGANIZATION 
Phvsician-diected 
Non Dhvsician-directed 
lea 
to physicia' offces, tests conducte by IPL 
. Includes equipment 
lea 
staff in  peonned in 
space, and tets analyzed in IPLs afte being 
physicians ' offces. 
No Assurance Of Satisfactory IPL Perfonnance Exists 
stadas 
Our study found that no uniform and acceptable set of national  defming satisfactory 
IPL performance exists. Specifcaly, the industr lacks: (1) Federal and State regulation of 
stadads 
IPL activities, (2) uniform testing stadads or quality control measurs, and (3) 
furer deta 
regarding operator training and qualifications. We discuss these weakesses in 
below. 
Lack of Federal and State Regulation 
No Federal laws exist affecting the performance of noninvasive physiological testing and 
there is virtally no legislation among the States. Severa State respondents indicated their 
legislatures were considering measures to regulate noninvasive physiological testing. 
We also asked State respondents three questions: (1) Should IPLs be regulated? (2) Should

IPL staf be certified? (3) Should IPL equipment be subject to mandatoryt qhua lity control 
checks? More than 80 percent of those responding answered "yes" to all  questions. One 
typical comment was, "We regulate barber shops in this State. Why not IPLs?"  As of July 1989, three States (Kentucky, Marland, and West VlTginia) had enacted legislation 
affecting the perfonnance of noninvasive physiological testing, exclusive of pulmonar 
function testing. A summar of applicable provisions follows: 
Kentucky  all medical laboratories must be licensed and are subject to periodc 
progr 
inspection. Each laboratory must establish a quality control  acceptable to the 
State. Personnel qualifications may be prescrbed at a later date. 
Maryland  cited elsewhere in this report, the Marland law regulates equipment rather 
than facilities. This law regulates only equipment costing more than $600,00, no 
matter where the testing is conducted. 
West Virginia  similar in most respects to the Kentucky law. However, West Virgiia 
requirs that laboratory staff must be licensed and certfied. 
The only guidelines HCFA has issued regarding IPLs ar the provisions relating to service 
coverage and a prohibition against durable medical equipment (DME) companies from 
owning IPLs. (This prohibition stems from confct-of-interest situations in which IPLs were 
perfonnng oximetr tests for financially related DME companies. Oximetr test results are 
needed before oxygen can be prescrbe for a Medcare beneficiar. 
Only one of the eight carers contacted has a systematic plan for monitoring the IPLs in its 
owners before issuing a provider 
service area. This carer conducts an integrty check on IPL 
number, after the IPL has been operating for 6 months, a review of their services is 
automatically scheduled. The other carers review an IPL's activities only in response to a 
specific complaint or in reaction to a question arsing during proessing an IPL's claim. 
Two carers require IPL directors to be physicians. One carer requires IPL staf to be 
certfied in accordance with local laws. 
Lack of Unifonn Testing Standards or Quality Control Measures 
We contacted a wide varety of health car organizations and expert representing professional 
societies aligned with specifc fonns of diagnostic testing, equipment manufacturers, 
credentialing organizations, and public interest groups. Thireen experts said noninvasive 
physiological testing-no matter where the testing was performed-lacked unifonn testing 
standards or quality control measures. 
Ultrasound tests, in parcular, were singled out as lacking uniform perfonnance stadards or 
quality control measures. Some tyical comments were: 
There is no standardized protocol for doing ultrasound tests. 
Other than ultrasound, there are fairly well docwnented quality control procedures.  " ...
There is no independent standrd that each manufacturer (of ultrasound equipment) 
can be measured against. 
Ultrasound is more of an art than a science. 
Several respondents blamed the Foo and Drg Admnistrtion (FA) for faiing to establish 
standads for ultrasound testing. One expert noted, "FDA has no image quality standads on 
ultrasound equipment. 
The 1976 amndments to the Federal Foo, Drg, and Cosmetics Act empowere FDA to 
regulate medcal equipment devices. One function grted FDA was to develop perfonnnce 
standads for new medcal devices. The amndments penntted FDA to regulate new 
equipment for marketing if the equipment was substatially equivalent to prenactment 
devices. Such equipment may be marketed subject to the same regulatory contrls as their 
preenactment predecessor devices. 
Severa Genera Accounting Offce (GAO) studies as well as a reent OIG study, "Home 
Testing Devices: FDA Clearce and Monitoring Activities" (OAI-12-89-01360), found that, 
although perfonnance standas for medical devices had not ben developed, FDA has 
safeguards in place to assure the safety and effectiveness of equipment. Prmaly, FDA uses 
drt 
its own  guidance instrctions to manufacturers and voluntar stadards to evaluate the 
perfonnance of medical devices. 
During the inspection, we encountered a number of examples of perfonnance standards which 
we considered laudable. For example: 
The American College of Radiology Task Force on Standads Settig developed a 
14-point perfonnance standard on mammogrphy screening. Not only does the stadad 
stipulate technical equipment requirements, but it also cites goals, indications, contra
indications, frequency guidelines, and qualifications for both technicians and 
technologists. 
00 
A Marland law governing equipment costing in excess of $60, mandates that 
every operator of such equipment establish a "Quality Assurance Program" detailing 
appropriate use and monitoring of the equipment. The.Marland law cites appropriate 
elements of the Program as including  documentation of informed consent, checks for 
" The law also requires 
allergies, appropriate medical history prior to testig...
equipment operators to hold monthly meetings to evaluate identified problems regarding 
their services. 
A midwestern IPL conducting more than 20 different ultrsound proced  es produced 
an operating manual which details patient prepartion procedures, clinical indications, 
expected results, contraindications, and technical requirements for each test.  Whenever feasible, we obtained copies of wrnen perfonnance guidelines. These guidelines 
ranged from detailed instrctions on how tests were to be conducted to employee leave 
prepar 
as a result of State or other regulation. 
requests. In no case were these guidelines 
American College of Cadiology has 
All had been prepared voluntarly. For example, the 
promulgated standads on a number of diagnostic cardiovascular tests. However, no 
requirement exists for any IPL to adopt these standas. Clearly, if the IPL felt no compulsion 
to prepar performance guidelines and stadads or adopt existing ones, it did not do so. 
As with perfonnance stadas, the quality control measur  established by the IPLs we 
contacted were strctly volunta. If an IPL did not want to implement quality contrl 
procedurs or special techniques to verify accurcy, it did not do so. All the IPLs we 
contacted, however, did engage in at least one quality contrl procedure. The rage and extent 
of such procedures appear to var considerably from IPL to IPL. 
Lack of Operator Training Standards and QualifICatons 
At the 35 IPLs we contacted, 18 of 45 equipment operators or technologists were neither 
(meeting all qualifications for 
registered by an accrediting organization nor registr-eligible 
registration except passage of an examnation). Additionally, 15 of these IPLs did not require 
their technologists to tae co tinuing education coures annually. 
The IPLs are not required to hire registered technologists. With limited exceptions (noted 
trning 
below), no laws or requird stadads exist denoting minimum educational or 
stated, 
standads for operators of medical equipment devices. The owner of a midwestern IPL 
Some IPLs can just drag people off the stret and trn them. Personnel qualifications should 
be the same no matter where the test is done-IPL, hospital, or wherever. 
Pulmonar function testing is the only noninvasive physiological test subject to extensive 
regulation. Twenty-four States along with Puerto Rico have legislation reuirg pulmonar 
and respiratory technologists to be licensed by the State in which they practice and certed by 
the National Board for Respiratory Car, the national credentialing body in that field. 
In the two most frequently perfonned IPL tests-ultrsound and cardiac 
monitoring-virualy no standads exist for trning, educational requirments, qualifications, 
or accreditation. Every IPL is left on its own with respect to staf qualifications and 
requirements. If an IPL chooses not to establish any qualifcations or crteria for its 
employees, it is free to do so. 
ultrasound 
While only Utah and West VlTginia have laws afecting sonogrphers (who operate 
legislation. The Utah law, which wil 
equipment), a number of other States ar considering 
certfied 
become effective April 1991, requires sonographers to be licensed by the State and 
, passed in April 1989, 
by a nationally recognized credentialing body. The West Virginia law
requires all "lab technicians and lab technologists" to be licensed and certfied. Although this 
mandated implementation in 90 days, a State offcial advised us that full implementation 
maybe delayed due to moneta problems.  No unifonn national standards exist regarding trning or qualifications of technicians who do 
ambulatory electrocardiogrphy (AECG) analysis. Furter, no recognize credentialing 
crntialng 
bodes offer certification examinations in AECG monitorig. One  organization 
volunta 
does offer a "self assessment" examnation; however, this is offered solely on a 
basis. 
Concerns About IPL Perfonnance are Pervasive 
confi 
that 
Interviews with health care experts, IPL operators, and State respondents 
concerns about the quality of IPL services are pervasive. Nearly 78 percent of all respondents 
who voiced definitive opinions expressed misgivings about IPL perfonnance. One expert 
comment was  Regulation is neeed to assure the patient receives quality testing. 
tyical: "
Among other reactions received from representatives of health care organizations and 
associations were: 
There should be some standrds to protect the public. 
s eas to get 
false negatives. 
Regulation would help to curb improper practices. 
You need quality control, and it should be mandtory. 
Owners and operators of IPLs had similar comments. In genera, these respondents felt that 
the lack of regulation of IPL operations fostere a climate which allowed some IPLs to skimp 
on quality control if it suited them to do so. Some of the comments expressed were: 
Regulation would stop people who have no regard for quality. 
There are lots of bad apples out there. 
We need to keep incompetent people out of the business. 
Some IPLs have poor techniques. It would not hurt to have some oversight. 
Although quality and accuracy of testing were the concerns most frequently expressed, related 
issues were also voiced. These issues included safety of testing, reliabilty of equipment, and 
qualifications of physicians and staff who operate equipment Severa respondents mentioned 
potential hazards associated with IPLs which conducted tests using radiation and nuclear 
medicine. 
A number of experts deplored what they perceived as a lack of attention devoted to equipment 
checks and preventive maintenance. One IPL owner noted, "Some companies use very old  , " 
equipment." Another interviewee stated  Doctors generally buy cheap equipment and use 
poorly trned staff to operate it. 
Three respondents were critical of the qualifications of physicians who conducte tests. One 
expert said, "One-third of all imaging proedures are perfonned by non-qualified physicians. 
Another stated, "Doctors should be crdentialed in the specialty in which they do testing. 
Of 17 health car experts who expressed an opinion, 15 favore minimum educational and 
trning stadards and mandatory crentialng for technologists who operate physiological 
testing equipment. Typical comments were: 
Poorly trained, uncredentialed laboratory techs are one of the major problems 
affecting the quality of physiological testing. 
ha 
If an IPL  only registered people, it would indicate tbey are concerned about 
quality. 
If a tech is considered competent, but is not credentialed, then there is something 
missing in his training.  RECOMMENDATIONS

The HCFA should issue Medicare coverage guidelines and instructions for 
IPLs. The instrctions  physiological" means 
should clarfy (1) what the term "
with respect to IPLs, (2) what tests IPLs are allowed to perfonn to be included in 
ditives wil 
the IPL category, and (3) what testing sites ar permssible. These 
enable carers to treat IPLs in a more unifonn and consistent manner. 
The HCFA should promote stronger quality asurance in IPLs through 
regulation or certification. This recommendation can be accomplished by any 
adess
one or a combination of the options listed below. However, any proposal 
ing quality assurace in IPL services should include these elements: (1) a quality 
control program (2) wrtten testing stadads, (3) crdentialing of staf or 
equivalent experience and trning, (4) continuing education or trning, and (5) 
onsite inspection visits. These elements ar implicit in each of the options listed 
below. The cost of such regulation or certfication should be financed by provider 
fees. 
Federal Regulation 
The HCFA could seek legislation to impose national certfication stadads 
on IPLs along the lines of laws governing ICLs. Such stadards would 
address minimum sta qualifications and trning as well as mandatory 
quality control equipment checks. Periodc on site inspection visits would be 
required. These visits could be done by the same State agencies which 
survey ICLs. Costs could be offset by assessments agaist the inspected 
entities. Any IPLs which fail to meet minimum standads would be bared 
from Medicare parcipation. (If merited, these stadards also could be 
extended to physicians who conduct a large number of diagnostic tests in 
their offces. 
State Regulation 
Medcar 
The HCFA could seek legislation to require, as a condition of 
parcipation, that IPLs be regulate by States. The legislation could 
stadas 
establish a set of minimum  but still allow States considerable 
flexibility in determning the details of their qualty assurce programs, 
with enforcement conducted by each State. Perhaps the progrs now 
effect in Marland, Kentucky, and West Virginia could be used as a basis for 
strcturing these standards.

Independent Certification 
In conjunction with industr groups, the HCFA could recognize an 
independent oversight organization to monitor and certify IPLS. (Lgislation 
may be needed to effect this approach.) Certfication would be required 
before an IPL could paricipate in Medcare. The Joint Com  n on Accreditation of Healthcar Organizations (JCAHO) favors this approach. 
According to the JCAHO, IPLs have many characteristics in common with 
ICLs; many of the stadads established for ICLs could also apply to IPLs. 
The JCAHO stadads used for hospita clinical, radiant, and physiological 
testing could be used as a model for an independent oversight program.  COMMENTS

We received comments on the draft report from both the Public Health Servce (PHS) and 
HCFA. 
The PHS expressed support for stronger qualty assurce in IPLs and included a number of 
general and technical comments. Prmarly, PHS questioned whether our respondents were 
fully awar of FDA's procedures and safeguards designed to assure the safety and 
effectiveness of diagnostic equipment, in parcular, ultrasound devices. The FDA has been 
volunta 
strving to achieve quality assurance in diagnostic equipment by promoting 
stadas 
performance stadads. In association with a  organization, FDA has developed a 
manual on ultrasound equipment perfonnce. In response, we feel our respondents were not 
singling out FDA for criticism; rather, they were expressing frstration with a health care 
system which they perceive as being less than perfect. As we indicate previously, 
acknowledge FDA has safeguards in place to assur the safety and effcacy of equipment. 
We have made certain revisions with regard to PHS' technical comments concerning FDA 
procedures. The PHS had no comments on the reommendations. 
The HCFA felt our report faied to provide convincing evidence to justify our 
recommendations. Although HCFA declined to implement the recommendations, they have 
initiated an independent review of specific kinds of IPLs to determine if standards should be 
developed. Moreover, HCFA indicated a wilingness to consider the need for legislation if 
their findings supponed such action. 
In response to HCFA's comments, we believe the absence of quality assurance in IPL 
operations is untenable. Medcare beneficiares have a right to expect a basic level of quality 
performnce and, at the present time, such assurace with respect to IPLs does not exist. We 
have, however, modfied our reommendations to provide more flexible mechanisms for 
quality assurance, paricularly for options involving State governments or an independent 
certfying entity. 
We wish to thank PHS and HCFA for their comments, and we ar pleased by their expressions 
of interest in our study.  APPENDIX 
INSPECTION CONTACTS 
American Association for the Continuity of Care 
American Association of Retid Persons 
Acuson, Inc. 
Advanced Technology Laboratories 
American Association for Respiratory Cae 
American Association of Medical Assistants 
American College of Cardiology 
American College of Radiology 
American Imaging Association 
10.  American Institute of Ultrasound in Medicine 
11.  American Medical Technologists 
12.  American Registr of Clinical Radiogrphy Technologists 
13.  American Registr of Diagnostic Medcal Sonogrphers 
14.  American Society of Echocardiography 
15.  American Society of Internal Medicine 
16.  CCI/BCVT (fonnerly Cardiovascular Credentialing Internationalational Board 
for Cardiovascular Testing) 
17.  Citech (Center for Infonnation on Technology for Health Care) 
18.  Center for the Advancement of Ambulatory Monitoring 
19.  Circadian 
20.  Credentialing Commssion  21.  Diagnostic Health Services 
22.  ECRI (fonnerly Emergency Car Research Institute) 
23.  Federation of State Medical Boards 
24.  Foo and Drug Administration 
25.  Health Industr Manufacturers Association 
26.  Hewlett-Packard 
27.  Joint Commission on Accreditation of Healthcare Organizations 
28.  Keith Mauney & Associates 
29.  Marquette Electronics, Inc. 
30.  Medical Technology Practice Pattern Institute 
Car 
31.  National Board of Respiratory 
32.  National Commission for Health Certifying Agencies 
33.  National Electrcal Manufacturers Association 
Assurce 
34.  National Organization for Competency 
35.  National Society for Cardiovascular Technologists 
36.  Nuclear Associates 
37.  Office of Licensing & Certification Programs, State of Marland 
38.  Public Citizen Health Research Group 
39.  Radiation Measurements, Inc. 
40.  Society of Diagnostic Medical Sonographers 
41.  Society of Vascular Technology 
42.  Ultramed, Inc.