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Follow the Rules of Diagnostic Test Orders for Radiology

Follow the Rules of Diagnostic Test Orders for Radiology

Avoid fighting stacks of denials by adhering to documentation requirements in LCDs.

The importance of diagnostic test orders to proper compliance and reimbursement is well illustrated by a personal story.

Years ago, I received a frantic phone call from an imaging center going through a Medicare contractor prepayment review. Approximately three months before, the program safeguard contractor began requesting records. Over time, the number of requests increased until the center found itself on 100 percent prepayment review.

For several months, the contractor was denying nearly 60 percent of the claims submitted for review, which kept the provider at 100 percent prepayment review. By the time my phone rang, thousands of claims were pending review by the Medicare contractor, and the turnaround time from the medical reviewers was extraordinarily slow.

Within a few days, I was onsite meeting with administration and legal counsel and going through stacks of records and requests. The primary reason for the denials was incomplete or invalid diagnostic test orders, causing the contractor to question medical necessity. I assured those at the center that the identified issues could be corrected, but that it would be an arduous process to receive payment on appeal for those services that had already been denied.

This fiasco could have been avoided if the provider had followed the rules for diagnostic test orders and adhered to documentation requirements contained in applicable local coverage determinations (LCDs).

Meet Diagnostic Test Ordering Protocol

An encounter for radiology services begins with a test order from the treating physician, commonly called the referring physician. The order is taken to an imaging center, hospital, or other provider of diagnostic imaging services. An order may be communicated via the following methods:

  • Written document signed by the treating physician that is hand-delivered, mailed, or faxed to the testing facility;
  • Electronic mail by the treating physician to the testing facility; or
  • A telephone call by the treating physician to the testing facility.
  • If a verbal order is given by telephone, both the treating physician and the testing facility must document the telephone call in their respective copies of the patient’s medical records.

Show Medical Necessity with Signs and Symptoms

A complete and accurate test order is critical to coding compliance because payment for services by Medicare is made only for services that are reasonable and necessary. CMS gives the responsibility of documenting medical necessity to the referring physician as part of the Medicare Conditions of Participation (42 CFR 410.32). The Balanced Budget Act of 1997 reiterates this requirement in Section 4317(b), stating the ordering physician must provide signs/symptoms or a reason for performing the test at the time it’s ordered.

Medicare pays only for items and services that are “reasonable and necessary for the diagnosis or treatment of illness or injury to improve the functioning of a malformed body member,” unless there is another requirement for payment of services (such as in the case of specific screening exams authorized for coverage).

Because this definition is broad, we rely on national coverage decisions (NCDs) and LCDs to provide guidance on conditions that support medical necessity for specific diagnostic tests. In addition to providing a list of covered clinical indications in the form of ICD-10-CM codes, several LCDs specify test order requirements. Providers are encouraged to read all NCDs and LCDs for services provided to ensure all documentation requirements are met.

Medical necessity is determined by the signs/symptoms provided by the ordering physician, making this information vital for final coding, even when the radiology report identifies an abnormal finding or condition. This information also is key to determining whether a finding is merely incidental or, in fact, related to the presenting signs/symptoms.

Medicare also considers a test ordered to rule out a specific condition (in the absence of documented signs/symptoms) to be coded as a screening exam, with a screening code assigned as the primary diagnosis and findings assigned as additional diagnoses. If the referring physician indicates a “rule out,” the signs or symptoms prompting the exam that ruled out the condition must be included in the documentation. If this information is missing, it should be obtained from the ordering physician before proceeding with the exam.

Know Your Place

There is confusion regarding diagnostic test order requirements due to different rules for different settings. The rules for an office-based practice and an independent diagnostic testing facility (IDTF) are more stringent than the rules for the hospital setting.

Each setting is governed by the Medicare Conditions of Participation; however, the conditions are different for hospitals and physicians. For example, the Medicare Conditions of Participation for hospitals states in 42 CFR 482.26, “Radiologic services must be provided only on the order of practitioners with clinical privileges or, consistent with State law, of other practitioners authorized by the medical staff and the governing body to order the services.”

If you work in the hospital setting, this information should be part of your medical staff bylaws. Privileges will be specified in the medical staff bylaws, such as permitting credentialed physicians to write orders as allowed by state law.

The physician conditions of participation in 42 CFR 410.32 state that all diagnostic tests must be ordered by the treating physician. It defines the treating physician as one who “furnishes a consultation or treats a beneficiary for a specific medical problem” and “uses the results in the management of the beneficiary’s medical problem.”
The rules governing diagnostic test orders in IDTFs go further, specifically stating:

  • The supervising physician of an IDTF may not order tests unless the supervising physician is the patient’s treating physician; and
  • The supervising physician may not add procedures based on internal protocols without a written order from the treating physician.

The rules governing IDTFs are the most specific and stringent due to abusive billing practices that were running rampant many years ago, when IDTFs were notorious for routinely adding tests that were not ordered or not medically necessary.

Regardless of setting, remember that the ordering physician is responsible for documenting medical necessity for a test order.
CMS provides further direction on diagnostic test orders in the CMS manuals. Chapter 15, section 80.6 of the Medicare Benefit Policy Manual states, “The following sections provide instructions about ordering diagnostic tests and for complying with such orders for Medicare payment.

NOTE: Unless specified, these sections are not applicable in a hospital setting.”

Regarding the definition of a testing facility, the same section states, “A ‘testing facility’ is a Medicare provider or supplier that furnishes diagnostic tests. A testing facility may include a physician or a group of physicians (e.g., radiologist, pathologist), a laboratory, or an independent diagnostic testing facility (IDTF).” Note that a hospital is not included in this definition of a testing facility.

Although hospitals are not governed by the same rules as IDTFs, independent laboratories, or office-based practices, it’s important that medical necessity is documented for all tests ordered and performed in the hospital setting. Although hospital radiologists are permitted to request additional tests or to modify test orders, it may be prudent to request additional orders and modified orders in writing from the referring physician to ensure submitted claims can withstand scrutiny, such as in the case of ordering a breast ultrasound after an abnormal mammogram or requesting 3D reformatting to make a definitive diagnosis. Facilities should take care when establishing “routine” testing protocols and consider each case on an individual basis and evaluate for medical necessity.

The definition of treating physician in the Medicare Benefit Policy Manual is the same as in the Medicare Conditions of Participation for physicians. In the context of radiology services, a radiologist performing a diagnostic radiological procedure (including diagnostic interventional radiology procedures) is not considered a treating physician; however, if an interventional radiologist performs a therapeutic intervention, the radiologist is considered a treating physician. This section also references treating practitioners. A treating practitioner is a nurse practitioner, clinical nurse specialist, or physician assistant. The same rules apply to treating practitioners who are permitted to order diagnostic tests.

Meet Criteria for Changes to Orders

Testing facilities should not routinely modify diagnostic test orders from the ordering physician. Although orders may conditionally request an additional diagnostic test, the conditional request must come from the ordering physician. New orders must be obtained when a test is determined to be clinically inappropriate or suboptimal, or when the result of an ordered diagnostic test is normal and the radiologist believes another diagnostic test should be performed for correct diagnosis.

If the testing facility (non-hospital) cannot reach the treating physician/practitioner to change the order or obtain a new order, and documents this in the medical record, then the testing facility may furnish an additional diagnostic test when all the following criteria apply:

  • The originally ordered test was performed.
  • Based on the result, the additional test(s) was necessary.
  • Delaying the performance of the test would have an adverse effect.
  • The result is communicated to treating physician and used in treatment.
  • The interpreting physician clearly documents why additional tests were performed.

Perhaps the most critical point in the above five criteria is the one stating that delaying performance of the test would have an adverse effect on the patient. If this is not the case, an additional diagnostic test should not be performed without a new order from the referring physician, even if all the other criteria can be met.

There are a few circumstances in which the testing facility may provide different or additional tests.

Test Design. The test design exception allows the radiologist to determine certain parameters of a diagnostic test when not specified by the ordering physician. This exception includes the number and types of views for X-ray exams, unless otherwise specified by the ordering physician, or the use of contrast material (such as with computed tomography or magnetic resonance imaging exam, when the physician has not made any mention of contrast). If the ordering physician has specified either the number or types of views, or use or non-use of contrast, the testing facility should not automatically modify the test order and should request a corrected order.
Clear Error. A test order may be modified if there is clear error, such as when the order specifies an exam to be performed of the left extremity, and the patient is symptomatic in the right extremity.
Patient Condition. The radiologist may cancel an order when the condition of the patient prevents completion of the ordered diagnostic test. Medically necessary preliminary scout imaging may be billed.

Get It in Writing, the Right Way

CMS has stated that a signature is not required on orders for tests paid under the clinical laboratory or physician fee schedule.

According to CMS Transmittal 94, however, the ordering physician must clearly document in the record the intent for the test to be performed. If an order is unsigned, the treating physician must document (typically in the form of a progress note) the intention that the clinical diagnostic test be performed. The documentation showing intent must be authenticated by the author via a handwritten or electronic signature. Use of a rubber stamp signature is not an approved method of authentication.

Get Claims Paid

To sum it up, there are four rules you must follow to ensure claims for diagnostic tests are paid: First, make sure there is a written order or documented intent from the treating physician; second, make sure documented signs and symptoms support medical necessity for the tests being ordered; third, follow local and national guidelines specific to the place of service; and, fourth, make sure criteria are met for changes to orders.

Medicare Benefit Policy Manual, Chapter 15 – Covered Medical and Other Health Services:
CMS Transmittal 80:
CMS Transmittal 94:
42 CFR 410.32 – Diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests: Conditions:
42 CFR 410.33 – Independent diagnostic testing facility:
42 CFR 482.26. Condition of participation: Radiologic services:
Balanced Budget Act of 1997, Section 4317:

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Stacie L. Buck, RHIA, CIRCC, CCS-P, RCC, RCCIR, AAPC Fellow, is president and senior consultant at RadRx in Stuart, Fla. ( She is a national speaker who provides consulting services to providers of diagnostic and interventional radiology services and is the author of the book Cracking the IR Code: Your Comprehensive Guide to Mastering Interventional Radiology Coding and creator of Mastering Interventional Radiology & Cardiology Online Education Program. Buck may be contacted at She is a member of the Stuart, Fla., local chapter.

One Response to “Follow the Rules of Diagnostic Test Orders for Radiology”

  1. Jeff O. says:

    I have a customer who has a call center that schedules diagnostic testing before the patient sees the vascular surgeon for a consultation. I have explained to them that this is not ok, however they are asking for something in writing. This is a very large institution and somehow they feel that it streamlines processes, however I see abuse, fraud and harm being done. Any advice?