Department of Health and Human Services
 

OFFICE OF 

INSPECTOR GENERAL 

QUESTIONABLE BILLING FOR 

MEDICARE INDEPENDENT 

DIAGNOSTIC TESTING 

FACILITY SERVICES 

Daniel R. Levinson
 

Inspector General
 

March 2012
 

OEI-09-09-00380 
 

  

EXECUTIVE SUMMARY: QUESTIONABLE BILLING FOR MEDICARE 

INDEPENDENT DIAGNOSTIC TESTING FACILITY SERVICES 

OEI-09-09-00380 

WHY WE DID THIS STUDY 

Independent Diagnostic Testing Facilities (IDTF), a type of Medicare provider, offer diagnostic 

services and are independent of physicians’ offices or hospitals. IDTF services have historically 

been vulnerable to abuse. In 1997, the Office of Inspector General found that 20 percent of 

IDTFs were not at the locations on file with the Centers for Medicare & Medicaid Services 

(CMS). In 2007, CMS reported that in Los Angeles, it had denied $163 million in IDTF charges 

and terminated Medicare billing privileges for 83 IDTFs. 

HOW WE DID THIS STUDY 

To describe IDTF billing patterns and identify questionable IDTF claims, we conducted a 

four-part review of such claims among geographic areas—specifically, Core Based Statistical 

Areas (CBSA). Based on an analysis of all Medicare Part B IDTF claims from 2009, we 

(1) identified the top 20 CBSAs with the highest average Medicare payments per beneficiary 

for IDTF services, terming these “high-utilization CBSAs”; (2) compared IDTF billing patterns 

in high-utilization CBSAs to such billing patterns in all other CBSAs nationally; (3) identified 

IDTF claims with questionable characteristics; and (4) compared the prevalence of IDTF 

claims with questionable characteristics in high-utilization CBSAs to the prevalence of such 

claims in all other CBSAs. 

WHAT WE FOUND 

Twenty high-utilization CBSAs accounted for 10.5 percent of Medicare Part B payments for 

IDTF services despite having only 2.2 percent of the total population of beneficiaries. Almost 

four times more beneficiaries in high-utilization CBSAs received IDTF services than 

beneficiaries in all other CBSAs. Nine percent of the IDTFs that served beneficiaries in highutilization CBSAs provided 90.1 percent of IDTF services. Additionally, high-utilization CBSAs 

had twice as many claims with at least two questionable characteristics as all other CBSAs. 

WHAT WE RECOMMEND 

We recommend that CMS: (1) monitor IDTF claims for questionable characteristics, (2) take 

appropriate action when IDTFs submit a high number of questionable claims, and (3) assess 

whether to impose a temporary moratorium on new IDTF enrollments in CBSAs with high 

concentrations of IDTFs. CMS concurred with all of our recommendations. 
TABLE OF CONTENTS 

Objectives ....................................................................................................1 

Background..................................................................................................1 

Methodology................................................................................................4 

Findings .......................................................................................................9 

Twenty high-utilization CBSAs accounted for 11 percent of 

Medicare Part B payments for IDTF services despite having 

only 2 percent of the total population of Medicare 

beneficiaries ....................................................................................9 

Nine percent of IDTFs provided 90 percent of IDTF services 

in high-utilization CBSAs .............................................................10 

High-utilization CBSAs had twice as many IDTF claims with 

at least two questionable characteristics as all other CBSAs ........11
 

Recommendations......................................................................................13 

Agency Comments and Office of Inspector General Response ....14 

Appendixes ................................................................................................15 

A: Table A-1: Comparison of High-Utilization Core Based 

Statistical Areas to All Other Core Based Statistical Areas ........15 

B: Table B-1: Independent Diagnostic Testing Facility Claims
 

With Questionable Characteristics: Comparison of 
 

High-Utilization Core Based Statistical Areas to All Other 

Core Based Statistical Areas ..........................................................16 

C: Agency Comments ...................................................................17 

Acknowledgments .....................................................................................20 
 

 

 

 

 

OBJECTIVES 

1.	 To compare the billing patterns of Independent Diagnostic Testing 

Facilities (IDTF) in high-utilization areas with the billing patterns of 

IDTFs in other geographic areas. 

2.	 To identify IDTF claims with questionable characteristics. 

BACKGROUND 

Independent Diagnostic Testing Facilities 

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 physicians’ 

offices or hospitals.1 From 2002 to 2009, substantial growth occurred in 

the number of IDTFs and in Medicare-allowed charges to IDTFs. The 

number of Medicare-enrolled IDTFs during this time increased from 

2,400 to 6,697, and Medicare-allowed charges for services from IDTFs 

increased from $740 million to $1 billion.2, 3 Previous OIG work has also 

found that high geographic concentrations of providers or services may 

indicate weaknesses in Medicare’s program safeguards.4 

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 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.5, 6 

1

 42 CFR § 410.33(a)(1).
 

2

 Medicare Payment Advisory Commission, Public Meeting: Characteristics of IDTFs and ambulatory 

surgical centers. Accessed at http://www.medpac.gov/transcripts/0404_allcombined_transcripts.pdf on
 

June 7, 2010.
 

3

 Office of Inspector General (OIG) analysis of 2009 Medicare Part B claims for IDTF services.
 

4

 OIG, South Florida Suppliers’ Compliance With Medicare Standards, OEI-03-07-00150, March 2007, and 

OIG, Aberrant Billing in South Florida for Beneficiaries With HIV/AIDS, OEI-09-07-00030, September 2007.
 

5

 62 Fed. Reg. 59048, 59071–72 (Oct. 31, 1997).
 6

 62 Fed. Reg. 59048, 59100–01 (Oct. 31, 1997) (adding 42 CFR § 410.33).
 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 1 
 

 

 

 

 

 

The new standards modified staffing, certification, and documentation 

requirements for IPLs. IPLs were also renamed IDTFs to help clarify their 

function. 7 

Also in 1997, 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.8 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.9 

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.10 In 2007, CMS 

reported that it had denied $163 million in IDTF charges and terminated 

Medicare billing privileges for 83 IDTFs in Los Angeles.11 

IDTF Enrollments 

An IDTF that wishes to enroll in Medicare must submit an application. 

The application collects a variety of information, including the procedure 

codes for which the applicant intends to bill, the names of supervising 

physicians and technicians, the location where medical records will be 

kept, and the address at which the IDTF will provide services.12 

Before approving an IDTF’s enrollment, CMS reviews the application and 

conducts an initial site visit, which may help to ensure that information on 

the application is correct. 

IDTF Billing Requirements 

Services from IDTFs must be ordered in writing by the physician treating 

the beneficiary, and the physician must also use the results of these 

services to manage the beneficiary’s medical problem.13 In addition, 

nonphysician practitioners may order tests under appropriate physician 

7

 62 Fed. Reg. 59048, 59071–72 (Oct. 31, 1997).
 

8

 OIG, Independent Physiological Laboratories: Vulnerabilities Confronting Medicare, OEI-05-97-00240,
 

August 1998.
 

9

 Ibid. 

10 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. 

11 CMS, Testimony before the House Budget Committee, July 17, 2007. Accessed at http://www.cms.hhs.gov 

on October 5, 2009.
 

12 Form CMS-855B. Accessed at http://www.cms.hhs.gov on October 13, 2009.
 13 42 CFR § 410.33(d).
 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 2 
 

 

 

 

 

 

 

 

 

 

 

supervision.14 The order must include the diagnosis or the basis for the 

service. 

Postenrollment Site Visits 

According to the Medicare Program Integrity Manual, if an 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.15 For example, if an IDTF that provides sleep studies submits a 

request to start providing ultrasound tests, CMS is required to conduct a 

site visit. 

CMS may also conduct postenrollment site visits at its discretion.16 CMS 

cites the use of unannounced site visits as a successful way to determine 

whether IDTFs are operational and at the locations on file with CMS.17 

According to the Medicare Program 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.18 

Temporary Moratoria 

In addition to taking administrative actions against individual IDTFs, 

CMS may also reduce the potential for fraud, waste, or abuse by 

instituting a temporary moratorium on IDTF enrollment. CMS’s authority 

to do this for specific provider types, specific geographic areas, or both 

was established by the ACA and implemented in 2011.19 

Related Work 

OIG conducted two concurrent evaluations of IDTFs to determine whether 

they complied with select Medicare standards.20 The evaluations involved 

conducting unannounced site visits in areas with a high density of IDTFs 

that demonstrated questionable billing patterns.21 

14 

15 42 CFR § 410.32(a)(2).

 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. 

16 42 CFR § 410.33(g)(14). 

17 Preamble to final rule implementing sections of the Patient Protection and Affordable Care Act of 2010, 

P.L. 111-148 (ACA). 76 Fed. Reg. 5862, 5869. (Feb. 2, 2011). 

18 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 15, § 20.1. Accessed at 

http://www.cms.hhs.gov on February 22, 2011.
 

19 ACA, § 6401(a)(3) (adding section 1866(j)(6) of the Social Security Act, which was designated as 1866(j)(7)
 

by the Health Care and Education Reconciliation Act of 2010, P.L. 111-152, § 1304). Implementing 

regulations for moratoria on newly enrolling Medicare providers and suppliers are at 42 CFR § 424.570.
 

20 The IDTF Medicare standards are at 42 CFR § 410.33.
 

21 OIG, Miami Independent Diagnostic Testing Facilities’ Compliance With Medicare Standards, 

OEI-05-09-00560; OIG, Los Angeles Independent Diagnostic Testing Facilities’ Compliance With Medicare 

Standards, OEI-05-09-00561. 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 3 
 

 

 

 

 

 

 

METHODOLOGY 

Scope 

This evaluation is national in scope and is based on an analysis of all 

Medicare Part B IDTF claims from 2009. We focused the analysis on 

geographic areas with the highest average Medicare payment per 

fee-for-service beneficiary (beneficiary)22 for IDTF services and on claims 

submitted by IDTFs. We define a geographic area as a Core Based 

Statistical Area (CBSA), which is a geographic area based around an 

urban center of at least 10,000 individuals.23 

Data Sources 

Our data sources consist of the 2009 Part B National Claims History 

(NCH) file from CMS, the 2009 Medicare Part A data file, and the 

2009 Denominator File from the Medicare Enrollment Database. The 

Part B NCH file contains claims submitted by noninstitutional providers, 

such as physicians, physician assistants, IDTF providers, and nurse 

practitioners. Claims information includes National Provider Identifiers 

(NPI),24 Provider Identification Numbers (provider ID),25 specialty codes, 

diagnosis and procedure codes, dates of service, the beneficiary’s Health 

Insurance Claim Number (beneficiary identifier), and payment amounts. 

The CMS Denominator File contains enrollment information about each 

beneficiary enrolled in a given calendar year.26 The Medicare Part A data 

file contains claims that were submitted by institutional providers, such as 

hospitals and skilled nursing facilities. 

Data Collection 

CMS considers an IDTF to be a provider specialty rather than a place of 

service. We analyzed the 2009 Part B NCH file for IDTF claims from 

22 The term “fee-for-service beneficiary” refers to a Medicare beneficiary enrolled in a payment system in 

which providers are paid for each service provided to a beneficiary. 

23 In 2003, the Office of Management and Budget (OMB) established CBSAs as a new geographic entity. 

OMB designated two categories of CBSAs: metropolitan statistical areas (based on populations of at least 

50,000 people) and new micropolitan statistical areas (based on a population of 10,000–49,999). During our 

review period, there were 955 CBSAs in the United States and Puerto Rico. OMB, OMB Bulletin 09-01: 

Update of Statistical Area Definitions and Guidance on Their Uses, November 20, 2008. Accessed at 

http://www.whitehouse.gov/sites/default/files/omb/assets/omb/bulletins/fy2009/09-01.pdf on 

September 23, 2010. 

24 An NPI is the standard 10-digit unique health identifier for health care providers. CMS, Glossary. Accessed 

at http://www.cms.gov/apps/glossary/search.asp?Term=npi&Language=English on March 14, 2010. 

25 A provider ID is a provider identifier that local Medicare contractors assign for each provider practice 

setting. Thus, a single provider many have several provider IDs. National Plan & Provider Enumeration 

System, NPI Application Help. Accessed at https://nppes.cms.hhs.gov/NPPES/Help.do?topic=OtherID on 

September 27, 2010. 

26 CMS, Denominator File Identifiable Data Files. Accessed at 

http://www.cms.gov/IdentifiableDataFiles/06_DenominatorFile.asp on October 1, 2010. 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 4 
 

 

 

practice settings that used only specialty code 47—which indicates that a 

claim is for an IDTF service—to bill Medicare.27 

Using specialty code 47 and provider ID fields in the 2009 Part B NCH 

file, we identified IDTFs that submitted claims in 2009. We counted each 

provider ID that had claims only with specialty code 47 as an IDTF. The 

final file included 5,974,969 claims representing $798 million in Medicare 

payments for IDTF services from 6,697 IDTFs. 

Analysis 

To describe IDTF billing patterns and identify questionable IDTF claims, 

we conducted a four-part review of such claims. First, we identified 

CBSAs with the highest average Medicare payments per beneficiary for 

IDTF services. Second, we compared IDTF billing patterns in those 

CBSAs to such billing patterns in all other CBSAs. Third, we identified 

IDTF claims with questionable characteristics. (We describe these 

characteristics in detail on pages 7 and 8 of this report.) Finally, we 

compared the prevalence of such IDTF claims in the two groups of 

CBSAs (i.e., CBSAs with the highest average Medicare payments per 

beneficiary for IDTF services and all other CBSAs). 

Identification of high-utilization CBSAs. Using the 2009 Part B NCH file 

and the 2009 Denominator File, we identified CBSAs with the highest 

average Medicare Part B payments per beneficiary for IDTF services in 

2009. We determined the CBSA to which each beneficiary belonged by 

matching the ZIP Code field from the Part B NCH file and the 

Denominator File with the ZIP Codes corresponding to each CBSA. We 

used the 2009 Denominator File to count the number of beneficiaries in 

each CBSA. We then merged the 2009 Part B NCH file and the 

2009 Medicare denominator file by CBSA. To calculate the average 

Medicare payments per beneficiary for IDTF services within each CBSA, 

we divided the total Medicare payments for IDTF services in 2009 by the 

number of all beneficiaries in each CBSA. 

We analyzed this file to identify the CBSAs (among the total of 

955 CBSAs) with the highest average IDTF payment per beneficiary. 

From this group, we selected the top 20 CBSAs, which we defined as 

high-utilization CBSAs. See Figure 1 for a map showing their locations. 

27 We analyzed claims from practice settings that billed using specialty code 47 only. We did not include 

practice settings that bill using multiple specialty codes. We focused our study in this manner to analyze the 

same type of claims as OIG’s two concurrent IDTF evaluations that conducted site visits to IDTFs. To best 

target their site visits, the evaluation teams that conducted the concurrent evaluations had to identify locations 

most likely to be IDTFs. They did this by selecting practice settings that billed using only IDTF specialty 

code 47. 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 5 
 

 

 

 

 

 

 

 

 Figure 1: High-Utilization CBSAs, 2009 

Source: OIG analysis of 2009 Medicare Part B IDTF claims. 

Comparison of high-utilization CBSAs to all other CBSAs. We compared 

IDTF billing patterns in these 20 high-utilization CBSAs to IDTF billing 

patterns in all other CBSAs. We did this by identifying the CBSAs 

corresponding to the claims in the 2009 Part B NCH file and the 

2009 Medicare Denominator File, based on the beneficiary’s CBSA. 

First, we summarized the 2009 Part B NCH file by CBSA to generate 

totals of IDTF services, payments, and beneficiaries who received IDTF 

services in high-utilization CBSAs and in all other CBSAs. We used the 

2009 Medicare Denominator File to obtain a count of beneficiaries in 

high-utilization CBSAs and in all other CBSAs. We merged these files to 

calculate utilization measures in high-utilization CBSAs and all other 

CBSAs and compared these utilization measures. Utilization measures 

that we calculated include: 

 the percentage of beneficiaries who received at least one IDTF service; 

 the average number of IDTF services received per beneficiary; 

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	 the average Medicare payment per beneficiary who received IDTF 

services; 

	 the number of IDTFs per 10,000 beneficiaries;28 and, 

	 the number of IDTF services those IDTFs provided. 

Identification of questionable characteristics. We developed a list of three 

characteristics that may identify questionable IDTF claims. We based this 

list on IDTF requirements and previous OIG work that analyzed billing 

patterns.29 The characteristics include: 

1.	 Claims involving a beneficiary linked to four or more IDTFs. A 

beneficiary “linked to” four or more IDTFs is one who had claims 

submitted from four or more IDTFs in a 1-year period. The presence 

of claims for beneficiaries who are linked to four or more IDTFs may 

indicate that providers are inappropriately sharing beneficiary 

identifiers.30 

2.	 Claims for which beneficiaries did not see their referring physicians 

within 90 days before or after receiving the IDTF service. We 

identified the referring physician listed on each IDTF claim and 

determined whether the physician had a claim for treating the 

beneficiary within 90 days before or after the beneficiary received the 

IDTF service. We looked at noninstitutional and institutional claims.31 

The absence of a claim within 90 days before or after the beneficiary 

received the IDTF service may indicate that the referring physician is 

not the treating physician.32 

3.	 IDTF claims on which the diagnosis category33 is not the same as the 

diagnosis category on any other corresponding provider claim for that 

beneficiary. We looked at noninstitutional and institutional claims 

90 days before and after the beneficiary received the IDTF service. 

28 For ease of reporting, our unit of analysis to measure the concentration of IDTFs in CBSAs is based on the 

number of IDTFs per 10,000 Medicare beneficiaries. 

29 OIG, Medicare Part B Billing for Ultrasound, OEI-01-08-00100, June 2009. 

30 This characteristic was based on OIG, Medicare Part B Billing for Ultrasound, OEI-01-08-00100, 

June 2009. 

31 Institutional claims under the Medicare Part A and B data files that we reviewed include claims from 

hospitals, nursing facilities, renal dialysis facilities, hospices, federally qualified health centers, and rural health 

clinics. 

32 This characteristic was based on OIG, Medicare Part B Billing for Ultrasound, OEI-01-08-00100, 

June 2009. 

33 We determined diagnosis categories based on the Clinical Classification Software system for International 

Classification of Diseases, 9th edition Clinical Modification developed by the Agency for Healthcare Research 

and Quality. Accessed at http://www.hcup-us.ahrq.gov/toolssoftware/ccs/ccs.jsp on September 29, 2010. 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 7 
 

 

 

 

The difference in diagnosis categories may indicate that unnecessary 

services were provided.34 

Comparison of IDTF claims with questionable characteristics in 

high-utilization CBSAs and such claims in all other CBSAs. We 

determined whether any of the three questionable characteristics were 

present on IDTF claims. We compared the presence of each characteristic 

on IDTF claims from high-utilization CBSAs and on IDTF claims from all 

other CBSAs. Next, we determined how often at least two of the three 

characteristics were present on IDTF claims. We compared how often at 

least two of the three questionable characteristics were present on IDTF 

claims from high-utilization CBSAs and on IDTF claims in all other 

CBSAs. 

Limitations 

We did not conduct a medical review to determine whether services were 

provided, whether services were medically necessary, or whether claims 

were coded correctly. 

The three characteristics that we used to identify questionable claims are 

not intended to be a comprehensive set of characteristics for identifying 

questionable billing. Further, while the presence of such characteristics 

raises questions about the appropriateness of a given IDTF claim, it does 

not necessarily mean that such claims are inappropriate or fraudulent. 

Our 2009 Part B NCH file (5,974,969 IDTF claims) for IDTF services 

included 43,039 IDTF claims in which the IDTF listed its own NPI as that 

of the referring physician.35 CMS instituted a temporary provision 

allowing billing providers to use their own NPIs in the required field for 

the referring physician’s NPI if the billing provider cannot obtain the 

referring physician’s NPI.36 To be conservative, we counted these 

43,039 claims as though the beneficiaries involved had all seen a referring 

physician within 90 days before or after receiving IDTF services. 

Therefore, our results may underestimate the number of beneficiaries who 

did not see a referring physician within that timeframe. 

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. 

34 We developed this characteristic based on the requirement that IDTF services be ordered in writing by the 

physician who is treating the beneficiary and that the order include the diagnosis or the basis for the service.
 

42 CFR § 410.33(d).
 

35 There were 613 IDTFs that entered their own NPIs in the field for the referring physician’s NPI at least once. 

36 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 14, § 14.5. Accessed at 

http://www.cms.hhs.gov/manuals/downloads/pim83c14.pdf on March 23, 2011.
 

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FINDINGS 

Twenty high-utilization CBSAs accounted for 

11 percent of Medicare Part B payments for IDTF 

services despite having only 2 percent of the total 

population of Medicare beneficiaries 

High-utilization CBSAs accounted for 10.5 percent ($75.8 million of 

$797.9 million) of the Medicare Part B payments for IDTF services in 

2009. However, only 2.2 percent (828,834 of 37.2 million) of 

beneficiaries reside in the high-utilization CBSAs. 

Almost four times more beneficiaries in high-utilization CBSAs 

received IDTF services than beneficiaries in all other CBSAs 

Beneficiaries in high-utilization CBSAs received more IDTF services than 

beneficiaries in all other CBSAs. In 2009, 22.9 percent of beneficiaries in 

high-utilization CBSAs received IDTF services, compared to 6.2 percent 

of beneficiaries in all other CBSAs. The percentage of beneficiaries who 

received IDTF services in high-utilization CBSAs ranged from 

15.2 percent in Troy, Alabama, to 38.8 percent in Jennings, Louisiana. 

The CBSAs with the next-highest percentages of beneficiaries who 

received IDTF services were Poplar Bluff, Missouri (35.0 percent), and 

Las Cruces, New Mexico (30.4 percent). See Appendix A, Table A-1, for 

details on use of IDTF services in high-utilization CBSAs and all other 

CBSAs. 

On average, beneficiaries in high-utilization CBSAs received 

more IDTF services than beneficiaries in all other CBSAs 

On average, beneficiaries who received IDTF services in high-utilization 

CBSAs received slightly more such services than beneficiaries in all other 

CBSAs. Beneficiaries who received IDTF services in high-utilization 

CBSAs received an average of 3.5 such services, compared to 2.4 such 

services in all other CBSAs. The number of IDTF services per beneficiary 

who received such a service in high-utilization CBSAs ranged from 2.5 in 

Yuma, Arizona, to 4.5 in Kerrville, Texas. The CBSAs with the 

next-highest number of IDTF services per beneficiary were Granbury, 

Texas (4.3), and Duncan, Oklahoma (4.1). 

The average Medicare payment per beneficiary who received 

an IDTF service in high-utilization CBSAs was almost 

25 percent higher than in all other CBSAs 

The average Medicare payment per beneficiary receiving IDTF services in 

high-utilization CBSAs was $399.90, compared to $321.33 in all other 

CBSAs. The average Medicare payment per beneficiary receiving such 

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services in high-utilization CBSAs ranged from $229.56 in Santa Fe, 

New Mexico, to $484.90 in Troy, Alabama. The CBSAs with the 

next-highest average payment per beneficiary were Miami– 

Fort Lauderdale–Pompano Beach, Florida ($457.75), and Kerrville, Texas 

($414.87). 

Nine percent of IDTFs provided 90 percent of IDTF 

services in high-utilization CBSAs 

A small number of IDTFs provided most of the IDTF services in 

high-utilization CBSAs. Although 1,676 IDTFs provided at least 1 such 

service to beneficiaries in high-utilization CBSAs, 90.1 percent 

(601,933 of 668,252) of the services were provided by only 9.0 percent 

(151) of those IDTFs. In all other CBSAs, 6,620 IDTFs provided at least 

1 such service to beneficiaries; however, 90.0 percent (4,769,358 of 

5,306,717) of the services were provided by 24.1 percent (1,593) of those 

IDTFs.37 Billing patterns in each high-utilization CBSA were consistent 

with the collective IDTF billing patterns among high-utilization CBSAs. 

For example, in Yakima, Washington, although 66 IDTFs provided at least 

1 IDTF service to beneficiaries in that CBSA, 2 IDTFs provided 

89.5 percent of such services to beneficiaries. Similarly, in Danville, 

Virginia, 45 IDTFs provided at least 1 IDTF service to beneficiaries, and a 

single IDTF provided 93.4 percent of such services to beneficiaries. 

Even though a small number of IDTFs provided most of the IDTF services 

to beneficiaries in high-utilization CBSAs, there was a higher 

concentration of IDTFs in those CBSAs than in all others. There was an 

average of 88.3 IDTFs per 10,000 beneficiaries in high-utilization CBSAs, 

compared to an average of 29.5 per 10,000 beneficiaries in all others. 

Seventy-one percent of IDTFs providing services to 

beneficiaries in high-utilization CBSAs were in the Miami–Fort 

Lauderdale–Pompano Beach, Florida, CBSA 

Of the 9.0 percent (151 of 1,676) of IDTFs that provided 90.1 percent of 

IDTF services to beneficiaries in high-utilization CBSAs, 70.8 percent 

(107 of 151) were in the Miami–Fort Lauderdale–Pompano Beach, 

Florida, CBSA (see Table 1). These 107 IDTFs accounted for 5.2 percent 

($41.1 million) of the Medicare payments for all IDTF services in 2009. 

However, only 1.4 percent (518,837 of 37.2 million) of beneficiaries 

resided in that CBSA. In addition, the average Medicare payment per 

beneficiary who received an IDTF service from these 107 IDTFs was 

37 The percentage of IDTFs that provided 90 percent of IDTF services is based on IDTFs that submitted claims 

to Medicare for reimbursement, not on the percentage of Medicare-enrolled IDTFs. 

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$438.98, compared to $294.14 among the remaining 44 IDTFs in this 

group. These 107 IDTFs provided an average of 4.1 IDTF services to 

beneficiaries in high-utilization CBSAs, compared to 2.9 IDTF services 

among the remaining 44 IDTFs in this group. 

Table 1. Billing Patterns From IDTFs That Provided 90 Percent of IDTF Services to 

Medicare Beneficiaries in High-Utilization CBSAs 

CBSA 

Where the 

IDTFs Were 

Located 

Number of 

IDTFs That 

Provided 

IDTF 

Services to 

Beneficiaries 

in HighUtilization 

CBSAs 

Number of 

IDTF 

Services 

Provided to 

Beneficiaries 

in HighUtilization 

CBSAs 

Number of 

Beneficiaries 

Who 

Received 

Services in 

HighUtilization 

CBSAs 

Total 

Medicare 

Payments for 

IDTF Services 

Average 

Number of 

IDTF 

Services 

per 

Beneficiary 

Who 

Received 

Such 

Services 

in HighUtilization 

CBSAs 

Average 

Medicare 

Payment 

per 

Beneficiary 

Who 

Received 

IDTF 

Services in 

HighUtilization 

CBSAs 

Miami–Fort 

Lauderdale– 

Pompano 

Beach, FL 

107 379,748 93,708 $41,135,779.96 4.1 $438.98 

Other HighUtilization 

CBSAs 

44 222,185 75,766 $22,285,647.37 2.9 $294.14 

Total 151 601,933 168,059 $63,421,427.33 3.6 $377.38 

Source: OIG analysis of 2009 Medicare Part B IDTF claims. 

High-utilization CBSAs had twice as many IDTF claims 

with at least two questionable characteristics as all 

other CBSAs 

In 2009, 17.5 percent of IDTF claims in high-utilization CBSAs had at 

least two questionable characteristics, compared to 8.0 percent of IDTF 

claims in all other CBSAs. These IDTF claims accounted for 

$10.0 million (12.5 percent) of the Medicare payments for IDTF services 

in high-utilization CBSAs. See Appendix B, Table B-1, for a list of 

high-utilization CBSAs with the corresponding percentages of claims with 

at least two questionable characteristics. 

Five times more IDTF claims in high-utilization CBSAs than in 

all other CBSAs involve a beneficiary linked to four or more 

IDTFs 

In high-utilization CBSAs, 15.4 percent (103,220 of 668,252) of IDTF 

claims involve a beneficiary linked to four or more IDTFs, compared to 

2.7 percent of such claims in all other CBSAs. The presence of claims for 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 11 
 

 

 

beneficiaries linked to four or more IDTFs may indicate that providers are 

inappropriately sharing beneficiary identifiers. The percentage of IDTF 

claims for which the beneficiary was linked to four or more IDTFs ranged 

from 0.2 percent in Duncan, Oklahoma, to 21.7 percent in Miami–Fort 

Lauderdale–Pompano Beach, Florida. The high-utilization CBSAs with 

the next-highest percentages were Lafayette, Louisiana (9.1 percent), and 

Fayetteville, North Carolina (6.1 percent). 

Seventeen percent of IDTF claims in high-utilization CBSAs 

had no corresponding claim by the referring physician 

In high-utilization CBSAs, 17.3 percent (115,669 of 668,252) of IDTF 

claims had no corresponding claim by the referring physician within 

90 days before or after the beneficiary received the IDTF service, 

compared to 14.2 percent of IDTF claims in all other CBSAs. The 

absence of a claim 90 days before or after receiving the IDTF service may 

indicate that the referring physician is not the treating physician. The 

percentage of IDTF claims that had no corresponding claim by the 

referring physician ranged from 5.4 percent in Rio Grande City–Roma, 

Texas, to 21.8 percent in Santa Fe, New Mexico. The high-utilization 

CBSAs with the next-highest percentages were Fayetteville, 

North Carolina (21.7 percent), and Miami–Fort Lauderdale– 

Pompano Beach, Florida (19.5 percent). 

More than 46 percent of claims in high-utilization CBSAs did 

not have the same diagnosis categories as any other 

corresponding provider claims 

In high-utilization CBSAs, 46.7 percent (311,910 of 668,252) of IDTF 

claims did not have the same diagnosis categories as any other 

corresponding provider claims 90 days before or after the beneficiary 

received an IDTF service, compared to 35.4 percent of IDTF claims in all 

other CBSAs. If the diagnosis category on the IDTF claim is not the same 

as that on any other corresponding provider claim within 90 days before or 

after the beneficiary received the IDTF service, it may indicate that the 

IDTF provided unnecessary services. The percentage of IDTF claims on 

which the diagnosis categories did not match any other provider claims 

ranged from 2.7 percent in Grand Island, Nebraska, to 61.5 percent in 

Santa Fe, New Mexico. The high-utilization CBSAs with the next-highest 

percentages were East Stroudsburg, Pennsylvania (55.1 percent), and 

Miami–Fort Lauderdale–Pompano Beach, Florida (52.2 percent). 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 12 
 

RECOMMENDATIONS 

This report found that high-utilization CBSAs accounted for 10.5 percent 

of Medicare Part B payments for IDTF services despite having only 

2.2 percent of the total population of beneficiaries. Almost four times 

more beneficiaries in high-utilization CBSAs received IDTF services than 

beneficiaries in all other CBSAs. Nine percent of the IDTFs that served 

beneficiaries in high-utilization CBSAs provided 90.1 percent of IDTF 

services. Additionally, high-utilization CBSAs had twice as many claims 

with at least two questionable characteristics as all other CBSAs. 

Another OIG review of IDTFs—Los Angeles Independent Diagnostic 

Testing Facilities’ Compliance With Medicare Standards 

(OEI-05-09-00561)—recommended that CMS impose a moratorium on 

new IDTF enrollments in the Los Angeles area while CMS develops 

additional safeguards for IDTFs in the area. Because services provided by 

IDTFs are also available at physicians’ offices and hospitals, an enrollment 

moratorium on IDTFs is unlikely to have a negative impact on 

beneficiaries’ access to these services. 

We recommend that CMS: 

Monitor IDTF claims for questionable characteristics 

CMS should monitor IDTF claims for questionable characteristics to 

identify vulnerabilities. Claims exhibiting readily identifiable 

questionable characteristics may include those on which the beneficiaries 

were linked to four or more IDTFs; claims that lacked corresponding 

claims by the referring physicians; and claims for which the diagnosis 

categories were not the same as those on any other provider claims for 

those beneficiaries. 

Take appropriate action when IDTFs submit a high number of 

questionable claims 

When IDTFs are found to have a high rate of questionable billing 

characteristics, CMS should review those claims before payment to ensure 

that they are appropriate. If CMS determines that inappropriate claims 

have been submitted, it should take steps to suspend payments for these 

providers and/or recover inappropriate payments made to them. 

Assess whether to impose a temporary moratorium on new 

IDTF enrollments in CBSAs with high concentrations of IDTFs 

Given that a small number of IDTFs provide most IDTF services in 

high-utilization CBSAs, CMS should assess whether to impose a 

temporary moratorium on new IDTF enrollments in those CBSAs. Such a 

moratorium would prevent new enrollments while CMS develops program 

safeguards, such as more frequent in-depth reviews of lDTFs. In the 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 13 
 

report entitled Los Angeles Independent Diagnostic Testing Facilities’ 

Compliance With Medicare Standards (OEI-05-09-00561), OIG 

recommended that CMS impose a moratorium on new IDTF enrollments 

in the Los Angeles area. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

In its written comments on our draft report, CMS concurred with all of our 

recommendations. CMS stated that it is using predictive modeling 

technology to detect and generate alerts for suspicious billing by IDTFs. 

CMS indicated that it is using authorities granted in the ACA to address 

potential vulnerabilities in the enrollment and claims payments processes 

for IDTFs. 

In our draft report, we recommended that CMS monitor IDTF claims for 

questionable characteristics. In response, CMS stated that it is streaming 

every Medicare fee-for-service claim before payment through its 

predictive modeling technology, known as FPS. The FPS uses a series of 

algorithms to identify potentially fraudulent claims and prioritize the most 

egregious situations. CMS is intent on building reliable models in the FPS 

that can detect and generate alerts for suspicious billing by all major 

provider types, including IDTFs. Furthermore, IDTFs have been and will 

remain a key focus for CMS’s program integrity operations. OIG supports 

CMS’s continued development of FPS and its predictive modeling efforts 

to identify fraudulent claims and prevent payments. 

We recommended that CMS take appropriate action when IDTFs submit a 

high number of questionable claims. In response, CMS stated that it is 

taking a variety of administrative actions against many provider types 

around the Nation, including IDTFs. Administrative actions may include, 

but are not limited to, verification of operational status, prepayment 

review, auto-deny edits, payment suspensions, and revocations. OIG 

supports CMS’s administrative action efforts and agrees that they may 

help address IDTFs that submit a high number of questionable claims. 

In our draft report, we recommended that CMS assess whether to impose a 

temporary moratorium on new IDTF enrollments in CBSAs with high 

concentrations of IDTFs. In response, CMS stated that in developing its 

approach for implementing the new temporary moratorium authority, it 

will assess whether moratoria are appropriate for a variety of provider 

types, including IDTFs. OIG supports CMS’s use of a variety of data and 

information, including factors such as high concentration of IDTFs and 

high IDTF utilization, to determine whether a moratorium would be 

appropriate. For the full text of CMS’s comments, see Appendix C. 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 14 
 

 

 

APPENDIX A 

Table A-1. Comparison of High-Utilization Core Based Statistical Areas to All Other Core 

Based Statistical Areas 

Core Based Statistical Areas (CBSA) 

(Alphabetical Order) 

Percentage of 

Medicare Beneficiaries 

Who Received 

Independent 

Diagnostic Testing 

Facility (IDTF) Services 

Average Number of 

IDTF Services per 

Medicare Beneficiary 

Average Payment 

per Medicare 

Beneficiary Who 

Received IDTF 

Services 

1 Alamogordo, New Mexico 22.0% 2.7 $358.67 

2 Danville, Virginia 30.3% 2.6 $266.83 

3 Duncan, Oklahoma 28.3% 4.1 $273.91 

4 East Stroudsburg, Pennsylvania 26.4% 2.7 $337.11 

5 Fayetteville, North Carolina 26.5% 2.6 $258.87 

6 Granbury, Texas 24.8% 4.3 $327.96 

7 Grand Island, Nebraska 23.8% 2.9 $354.14 

8 Jennings, Louisiana 38.8% 2.8 $284.63 

9 Kerrville, Texas 16.4% 4.5 $414.87 

10 Lafayette, Louisiana 22.0% 3.0 $354.75 

11 Las Cruces, New Mexico 30.4% 3.2 $325.72 

12 Miami–Fort Lauderdale–Pompano 

Beach, Florida 

21.5% 3.9 $457.75 

13 Natchez, Mississippi–Louisiana 28.9% 3.0 $344.38 

14 Opelousas–Eunice, Louisiana 19.0% 3.0 $354.71 

15 Poplar Bluff, Missouri 35.0% 3.4 $338.13 

16 Rio Grande City–Roma, Texas 20.4% 2.7 $339.44 

17 Santa Fe, New Mexico 29.4% 3.1 $229.56 

18 Troy, Alabama 15.2% 3.1 $484.90 

19 Yakima, Washington 21.8% 2.6 $308.70 

20 Yuma, Arizona 22.4% 2.5 $387.65 

All High-Utilization CBSAs Combined 22.9% 3.5 $399.90 

All Other CBSAs 6.2% 2.4 $321.33 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 15 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX B 

Table B-1. Independent Diagnostic Testing Facility Claims With Questionable 

Characteristics: Comparison of High-Utilization Core Based Statistical Areas to All Other 

Core Based Statistical Areas 

Core Based Statistical Areas 

(CBSA) (Alphabetical Order) 

Total 

Number of 

Independent 

Diagnostic 

Testing 

Facility 

(IDTF) 

Claims 

Percentage of 

IDTF Claims 

With Two or 

More 

Questionable 

Characteristics 

Percentage 

of IDTF 

Claims on 

Which the 

Medicare 

Beneficiary 

Is Linked to 

Four or 

More IDTFs 

Percentage 

of IDTF 

Claims That 

Lacked a 

Claim by 

the 

Referring 

Physician 

Percentage of 

IDTF Claims 

With 

Unmatched 

Diagnosis 

Categories 

1 Alamogordo, New Mexico 5,336 2.6% 2.0% 14.1% 10.0% 

2 Danville, Virginia 15,717 9.5% 0.3% 13.4% 49.7% 

3 Duncan, Oklahoma 10,012 3.6% 0.2% 6.3% 43.5% 

4 East Stroudsburg, Pennsylvania 16,382 12.0% 1.8% 15.4% 55.1% 

5 Fayetteville, North Carolina 25,874 10.1% 6.1% 21.7% 36.1% 

6 Granbury, Texas 12,248 5.9% 2.6% 9.6% 38.6% 

7 Grand Island, Nebraska 7,169 0.8% 2.6% 6.4% 2.7% 

8 Jennings, Louisiana 5,582 1.8% 3.1% 8.4% 5.8% 

9 Kerrville, Texas 9,715 1.4% 1.8% 9.7% 10.3% 

10 Lafayette, Louisiana 21,807 11.0% 9.1% 12.3% 46.2% 

11 Las Cruces, New Mexico 23,242 7.5% 5.7% 12.8% 39.0% 

12 

Miami–Fort Lauderdale– 

Pompano Beach, Florida 435,781 22.7% 21.7% 19.5% 52.2% 

13 Natchez, Mississippi–Louisiana 8,886 5.4% 5.5% 14.8% 21.1% 

14 Opelousas–Eunice, Louisiana 8,811 9.0% 3.7% 11.7% 46.3% 

15 Poplar Bluff, Missouri 10,164 5.3% 3.7% 11.5% 26.1% 

16 Rio Grande City–Roma, Texas 4,072 3.0% 3.3% 5.4% 23.0% 

17 Santa Fe, New Mexico 16,704 16.8% 2.5% 21.8% 61.5% 

18 Troy, Alabama 2,247 6.8% 1.6% 8.7% 45.3% 

19 Yakima, Washington 16,160 2.7% 1.7% 8.3% 11.4% 

20 Yuma, Arizona 12,343 7.5% 3.5% 11.1% 43.0% 

All High-Utilization CBSAs 

Combined 668,252 17.5% 15.4% 17.3% 46.7% 

All Other CBSAs 5,306,717 8.0% 2.7% 14.2% 35.4% 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 16 
APPENDIXC 

Agency Comments 

/fP.o;lC:~.~ 

Centers lor Medicare & Medicaid Services ( DEPARTMENT OF HEALTH & HUMAN SERVICES Office 01 Strat. Opef8tions 

and RflgtJls/O<y Aff....

<~~ 200 Independence Avenue SW 

Washington, DC 20201 

DATE: DEC 2 3 2011 

TO: 	 Daniel R. Levinson 


ll\~peotor General 


FROM: 	 Mwil,yn TjlVenner 


Acting Aibninis1rator 


SUBJECT: 	 Office of Inspector General (OIG) Draft Report: "Questionable Billing for 

Medicare Independent Diagnostic Testing Facility Services" (OEI-09-09-00380) 

'The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and 

comment on the Office oflnspector General (010) draft report entitled, "Questionable Billing 

for Medicare Independent Diagnostic Testing Facility Services." The purpose ofthis report was 

to compare the billing patterns oflndependent Diagnostic Testing Facilities (IDTFs) in highutilization areas with billing patterns oflDTFs in other geographic areas and to identify IDTF 

claims with questionable characteristics. 

IDTFs offer diagnostic services and are independent of a physician's office or hospital. 


According to OIG's report, the number ofMedicare -enrolled IDTFs from 2002 to 2009 


substantially grew, as did the Medicare-allowed charges for IDTFs. 


IDTF services have historically been vulnerable to abuse. CMS is currently streaming every 

Medicare fee-for-service claim in real-time through its predictive modeling technology, known 

as the Fraud Prevention System (FPS). 'The FPS uses a series of algorithms to identify 

potentially fraudulent claims and prioritize the most egregious situations. As each claim streams 

through the predictive modeling system, the system builds profiles ofproviders, networks, and 

billing patterns. Using these profiles, CMS estimates a claim's likelihood offraud and prioritizes 

providers with billing behavior that seem to pose an elevated risk to Medicare for a closer 

review. CMS will explore opportunities to build reliable models in the FPS that Can detect and 

generate alerts for suspicious billing behavior by IDTFs. 

In addition, 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 screening provisions ofCMS 6028-FC1 alllDTFs are 

I eMS 6028.FC entitled, uMedicare, Medicaid and Children's Health Insurance Programs; Additional Screening 

Requirements, Application Fees, Temporary Enrollment Moratoria, Payment Suspensions and Compliance Plans for 

Providers and Suppliers" was published in the Federal Register on February 2, 20 II . 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 17 
 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 18 
 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 19 
 

Acknowledgments 

This report was prepared under the direction of Timothy S. Brady, 

Regional Inspector General for Evaluation and Inspections in the San 

Francisco regional office, and Michael Henry, Deputy Regional Inspector 

General. 

Veronica Gonzalez served as the team leader for this study, and 

Loul Alvarez served as lead analyst. Other principal Office of Evaluation 

and Inspections staff from the San Francisco regional office who 

contributed to the report include Christina Lester; central office staff who 

contributed include Robert Gibbons, Scott Horning, Scott Hutchison, and 

Kevin Manley. 

OEI-09-09-00380 Questionable Billing for Medicare IDTF Services 20 
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 OIG’s 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.