Mountain State Medical Policy Bulletin
Section: Miscellaneous
Number: Z-16
Topic: Purchased Services
Effective Date: August 1, 2005
Issued Date: October 10, 2005
Date Last Reviewed: 10/2005

General Policy Guidelines

Indications and Limitations of Coverage

It is acceptable for a provider to report a total procedure when he has purchased the technical component; however, it is not acceptable for him to report a purchased professional component, either performed independently or as part of the total service.

Independent Diagnostic Testing Facilities (IDTFs) are ineligible providers because they are business corporations, and do not meet the definition of an eligible professional provider according to Mountain State's enabling legislation.

Various billing arrangements between two providers or between a provider and another entity, such as an IDTF, are described as follows.

  • The first billing arrangement involves a business or professional corporation which "sells" the technical component of a diagnostic service to a doctor. The doctor then interprets the results of the test and reports the TOTAL procedure. The single fee from the reporting doctor must include his/her cost for the technical portion of the test, as well as the professional interpretation fee. THIS IS AN ACCEPTABLE BILLING ARRANGEMENT.

  • The second arrangement involves an entity which provides both the technical and professional components of a diagnostic service. These entities are often business corporations (e.g., IDTFs) that employ or contract with doctors to interpret test results. This entity then "sells" the TOTAL procedure to the referring doctor who reports the TOTAL procedure. In this situation, the reporting doctor has not actually performed any professional service. Therefore, THIS IS NOT AN ACCEPTABLE BILLING ARRANGEMENT.

  • The third billing arrangement involves a doctor who owns specialized equipment, but performs only the technical portion of the service. The doctor then "purchases" the professional interpretation from another specialist and reports the TOTAL service. The reporting doctor has not performed any professional service. THIS IS NOT AN ACCEPTABLE BILLING ARRANGEMENT.

Description

"Purchased services" are those services that are not actually performed by the physician requesting and reporting them. These services usually involve the technical and professional components of diagnostic tests performed by different entities (e.g., a business corporation and a doctor). The types of service most commonly "split" in this manner are radiological and diagnostic medical procedures.

Procedure Codes


Traditional Guidelines

Refer to General Policy Guidelines

FEP Guidelines

Refer to General Policy Guidelines

PPO Guidelines

Refer to General Policy Guidelines

Managed Care POS Guidelines

Refer to General Policy Guidelines

Publications

References

View Previous Versions

[Version 001 of Z-16]

Table Attachment

Text Attachment

Procedure Code Attachment


Glossary




This policy is designed to address medical guidelines that are appropriate for the majority of individuals with a particular disease, illness, or condition. Each person's unique clinical circumstances may warrant individual consideration, based on review of applicable medical records.

Medical policies are designed to supplement the terms of a member's contract. The member's contract defines the benefits available; therefore, medical policies should not be construed as overriding specific contract language. In the event of conflict, the contract shall govern.

Medical policies do not constitute medical advice, nor the practice of medicine. Rather, such policies are intended only to establish general guidelines for coverage and reimbursement under Mountain State Blue Cross Blue Shield plans. Application of a medical policy to determine coverage in an individual instance is not intended and shall not be construed to supercede the professional judgment of a treating provider. In all situations, the treating provider must use his/her professional judgment to provide care he/she believes to be in the best interest of the patient, and the provider and patient remain responsible for all treatment decisions.

Mountain State Blue Cross Blue Shield (MSBCBS) retains the right to review and update its medical policy guidelines at its sole discretion. These guidelines are the proprietary information of MSBCBS. Any sale, copying or dissemination of the medical policies is prohibited; however, limited copying of medical policies is permitted for individual use.