Technical services, such as the technical component of a diagnostic test, may be purchased. A provider may report the technical component of a service ordered from and rendered by another entity.

Independent Diagnostic Testing Facilities (IDTFs) often provide technical services. IDTFs are business entities that generally do not provide a direct service to the member. IDTFs do not meet the definition of an eligible professional provider according to Mountain State’s enabling legislation. Because of this, IDTFs are not able to receive reimbursement directly from Mountain State. However, providers may purchase and report technical services from IDTFs. (See Example A)

In some instances, IDTFs contract with physicians to interpret test results. The IDTF then “sells” the total service to the ordering physician. Providers may not report purchased total services because they may not report a professional service performed by another entity. (See Example B)

Here are examples of various billing arrangements:

Example A - acceptable billing arrangement

A cardiologist purchases the technical component of cardiac monitoring services from an IDTF. The cardiologist interprets the results of the service and reports the total procedure. The single fee from the physician includes his or her cost for the technical portion of the test, as well as his or her professional interpretation fee.

Example B - unacceptable billing arrangement

A family practitioner purchases a total radiology service from an IDTF or a radiologist. The family practitioner cannot report this service since he or she did not interpret the results and therefore has not provided a covered professional service. In this example, the radiologist who interprets the study should report the total service.

Example C - acceptable billing arrangement

An internist requests a diagnostic cardiac test from a cardiologist. The internist interprets the results of the service and reports the professional component. The cardiologist who owns the equipment reports the technical component of the test. There is no "purchased" service in this example. Each physician reports the applicable component he or she rendered.

For reporting purposes, total component procedures should be reported with the appropriate procedure code. No modifier is necessary to identify a code as a "total" service. When reporting only the professional or technical components, use the appropriate procedure code for the individual component, if applicable, or use an appropriate modifier with the procedure code (modifier 26 - professional component; modifier TC - technical component).

Description

Purchased services are defined as those that are not actually performed by the provider that orders and reports them. The concept typically applies to procedures with separate professional and technical components, such as radiological and diagnostic medical tests. The patient's physician may perform the professional component (interpretation), however, that physician may also purchase the technical component from another entity.

The provider that performs the professional services, including the professional component (interpretation) of diagnostic tests, must always report them. A provider may not report a professional service that is performed by another entity. In other words, a provider may not “purchase” professional services.