Court: IDTFs Must Maintain Medical Record Documentation to Support Diagnostic Services Necessity
In a recent case (Medicomp, Inc. v. Secy. U.S. Dept. of Health, 2016 WL 901282 (March 3, 2016)), the United States District Court for the Middle District of Florida upheld the Department of Health and Human Services (HHS) Medicare Appeals Council determination that failure of an independent diagnostic testing facility (IDTF) to maintain documentation in compliance with local coverage decision (LCD) requirements was an appropriate basis for retrospective denial of payment. Medicomp argued that it should not be required to maintain documentation that is created by the physician ordering the diagnostic test, and that is not within its control.
The significance of this case is twofold:
First, it establishes that non-compliance with documentation content requirements is an acceptable basis for making a medical necessity determination (i.e., not documented properly, not medically necessary).
Second, it establishes that an IDTF must comply with LCD documentation requirements. This means that prior to performing a test, an IDTF must receive supporting documentation from the ordering physician AND verify that it is compliant with LCD requirements.
Where the documentation is not compliant with those requirements, but the IDTF performs the test anyway, then bills and receives payment, those payments are subject to recoupment. Where it can be shown that the IDTF knew that the payments were improper and it did not voluntarily refund the improper payments to Medicare, the IDTF additionally could be subject to reverse false claims liability. Fortunately, this case does not establish binding legal precedent, but nonetheless should be considered, from a risk analysis perspective.