Do you Provide Services in an Independent Diagnostic Testing Facility (IDTF)? If so, you might receive a letter regarding the Physician Quality Reporting System (PQRS) 2015 payment adjustment.

In previous years, physicians working in Independent Diagnostic Testing Facilities (IDTFs), although an eligible provider, were not able to participate in PQRS due to their billing methodology. The Centers for Medicare & Medicaid Services (CMS) recently determined that services provided at an IDTF do, in fact, follow the billing methodology used for the PQRS program, and as such, these eligible professionals (EPs) are eligible to participate in the program.

Some providers working in IDTFs have recently received letters from CMS regarding the PQRS payment adjustment on their 2015 Medicare Physician Fee Schedule (MPFS) Part B reimbursements. CMS is working on correcting this problem and has stated that EPs working in an IDTF WILL NOT receive the negative payment adjustment in the 2015 or 2016 PQRS program. If the provider does, in fact, receive the negative payment adjustment of 1.5% in 2015 or 2.0% percent for 2016 for services rendered in an IDTF, CMS will automatically reprocess those claims making corrections to those adjustments. This process may take several months. The claims adjustment reason code (CARC) and remittance advice remark code (RARC) that will identify the penalty and adjustment will appear as such:

  • “CARC 237-Legislated/Regulatory Penalty, to designate when an upward payment adjustment will be applied”1
  • “RARC N699-Payment adjusted based on the Physician Quality Reporting System (PQRS) Incentive Program”2

Services Rendered in IDTFs, Providers now Eligible to Participate In PQRS in 2015
Participation is now required for EPs working in an IDTF in the 2015 PQRS program which runs from Jan. 1, 2015 to Dec. 31, 2015. Providers should participate in the program when providing services in the IDTF to avoid the negative payment adjustment in 2017. 

Example 1:   A physician works for an IDTF providing the professional component of a diagnostic test at the IDTF location. The services are billed under the MPFS electronically or on the 1500 form. If the service rendered is included in the denominator of a PQRS measure for 2015, the EP is able to report on the measure to avoid the 2017 penalty.

Example 2:  Professional Component of the diagnostic test is interpreted off site of the IDTF. The IDTF contracts with an independent practitioner to perform the interpretation of the diagnostic test. These services are preformed off site of the IDTF. The IDTF then bills for that interpretation under the MPFS electronically or on the 1500 form. If the service rendered is included in the denominator of a PQRS measure for 2015, the EP is able to report on the measure to avoid the 2017 penalty.

In Summary, to quote CMS:  “EPs at IDTFs will not be assessed for the 2015 or 2016 PQRS negative payment adjustment; however, EPs who render services at IDTFs should participate in the PQRS starting in 2015 to avoid the PQRS negative payment adjustment in 2017 and beyond.”3

1Centers for Medicare and Medicaid Services (CMS) PQRS Payment Adjustment and Providers Who Rendered Services at IDTFs.
2Id.
3Id.

Author - Female

About the author

Cathy Woodall, CHC, CPC is Compliance Director in Radiology of McKesson Business Performance Services