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January 15, 2007

Final Answer? Teleradiology Takes on Final Reads
By Beth W. Orenstein
Radiology Today
Vol. 8 No. 1 P. 12

Over the past few years, teleradiology has grown at a phenomenal pace. The global leader in teleradiology services, credited with inventing the concept, NightHawk Radiology Services LLC, based in Coeur d’Alene, Idaho, now provides teleradiology services for more than 600 radiologist groups and approximately 1,000 hospitals. Virtual Radiologic Corporation in Minneapolis has experienced similar growth; it now enables hundreds of clients to serve nearly 600 medical institutions.

Epic Teleradiology, based in Leesburg, Fla., started off reading roughly 25,000 studies per year. In the past two years that number has grown to 70,000, and “this year, with the up-and-coming contracts, it will more than double, and it just goes up from there,” says Steven Currier, chief operating officer for Epic.

Those in the business attribute the fast-paced growth to numerous factors. “One reason is imaging demands on a practice continue to go up, but practice sizes remain relatively the same,” says Ron Corbisier, executive director of marketing for Virtual Radiologic.

Also, Corbisier says radiology and medicine have become more comfortable utilizing teleradiology services. When teleradiology began emerging in the early part of the decade, it was a new model. Radiologists have since seen that it works well and to their benefit—and so it has been accepted into the mainstream practice of radiology.

Teleradiology providers are also expanding the services they provide. “Most of teleradiology began as a wet read or STAT read for evening or emergency room coverage or vacation-type call coverage,” Corbisier says. That night and weekend call coverage has expanded, and more teleradiology services are offering daytime and subspecialty reads. Also emerging is a trend toward providing final reads.

What happened with NightHawk is typical. “We began doing just night call,” says Jon D. Berger, who cofounded the company in 2001 and has served as director and vice president of sales and marketing since 2004. “But over the course of the last five years, our customers started to tell us that, with the shortage of radiologists, they have struggled to recruit and need us to provide final reads and subspecialty expertise.” Not only did NightHawk listen to its customers, it also “plans to maintain our leadership position in final reads and subspecialties, just as we have in the night coverage business,” Berger adds.

Economics also plays a role, says Corbisier. It often doesn’t make sense financially or time-wise, he explains, for hospitals or imaging centers that rely on teleradiology services for additional support during the daytime to have their local radiologists spend time rereading and finalizing studies. If it’s a nonemergency situation, there’s no need to perform a preliminary read, Corbisier says. From the start, the report should be a final. According to Corbisier, Virtual Radiologic is hearing more frequently from its clients: “If I am going to partner with a teleradiology services provider, I might as well go ahead and get the final done and reduce the work on the other side. It makes economic sense.”

Catching Up to the Technology
However, having teleradiology services involved in final and subspecialty reads is not as straightforward as it may seem. Part of the problem is that because teleradiology is relatively new, the technology and the reliance on it is moving at a faster pace than the laws that govern reimbursements and hospitals’ bylaws regarding credentialing and practice privileges. Some people also believe final and subspecialty reads have their own liability issues. “The fact that teleradiology is so new and malpractice insurance is so complicated, the insurance providers have not really thought all this through yet,” says Scott Seidelmann, president of Franklin & Seidelmann Subspecialty Radiology (F&S) LLC based outside Cleveland.

The most significant source of reimbursement for telemedicine of any kind, including radiology services, is Medicare. In 1997, Congress enacted the Balanced Budget Act, which mandated that Medicare reimburse telemedicine care and fund telemedicine demonstration projects. It took two years for administrative rules to be promulgated and implement telemedicine reimbursement provisions; Medicare began accepting claims for telemedicine in January 1999. However, many have found that the Medicare provisions are highly restrictive and don’t necessarily match the practical realities of how telemedicine, and teleradiology in particular, is practiced.

Seidelmann says preliminary reads can be provided from anywhere in the world because, with preliminary reads, no one is submitting a bill to be paid to an insurer—private or federal. Payment for preliminary reads is between the service providing them and the physician group, facility, or hospital offering them; preliminary reads are not reimbursable.

However, final reads are reimbursable, and therein lies the rub. Under current Centers for Medicare & Medicaid Services (CMS) rules, radiologists who provide final reads for Medicare and Medicaid patients must be physically located within the United States. “If you’re doing final interpretations, you’ve got to be a domestic-based radiologist, and that’s a huge distinction,” Seidelmann says. F&S’s network of more than 30 subspecialty radiologists is licensed in the 50 states.

Because of the requirements, Berger says, NightHawk has doctors located throughout the United States for reading images for Medicare and Medicaid patients. Because the demand for final reads is increasing, Berger says NightHawk plans to open another reading facility in San Francisco. “From our perspective, it’s a more long-term solution … while also helping with patient care.”

Currier says billing is not an issue for Epic Teleradiology because it bills the entity ordering the imaging exams, not the patient or the third-party payers. “Typically, there is a contract price,” he says. “For example, they will pay us so much for a CT scan, which includes the final read. If it is STAT, we change a 20% up-charge. It’s their job to recoup what they can from the patients or their insurance,” he says.

Currier says its billing system in simpler. “We don’t have to deal with the denials. We don’t have to deal with patients who don’t pay their bills. We don’t have to deal with any of that.” However, Currier says, “we normally accept an amount that also considers the imaging entity’s burden for denials. It’s all factored in to be a win-win situation.”

Virtual Radiologic, which has more than 70 radiologists located in the United States to provide final reads, says Medicare billing presents some unique challenges. Medicare’s current rule is that a professional component of a reimbursement claim shall be submitted where the images are read, not where the patient is scanned. “So if you have a hospital in California but a physician in Texas who does the read, you would bill for the technical component in California and for the professional component in Texas,” Corbisier says. “It’s a new type of model and one that is more complex than you would normally find in a traditional practice.” Corbisier says Virtual Radiologic can handle the complexities of billing Medicare and Medicaid for its professional services because it has developed a system to deal specifically with those issues. “It’s a little proprietary how we do it,” he says of the system, “but we’ve basically spent the last year understanding the current Medicare and Medicaid rules and structuring our business to allow us to accommodated for this distributed billing.”

He adds that Virtual Radiologic’s billing system provides different options for its clients so they can choose the one that best suits their environment. Virtual Radiologic believed it had to devise a solution, Corbisier says, because the CMS rules are not written with telemedicine, as it is practiced today, in mind. “The current regulations have a bit of catching up to do,” he says, “and, right now, you probably have to do some additional work to make it work.”

Another issue, Corbisier says, is that different Medicare carriers interpret the CMS rules differently. “We do run across a few carriers who interpret the rules differently, which makes it even a little more challenging,” he says. For example, Corbisier says, some Medicare carriers will pay a claim, no matter where the radiologist sits, as long as the hospital or practice doing the imaging is located in their area. “If the patient is scanned in their area, they’ll pay that claim.” However, other carriers have said no. “You have to bill the carrier in the state in which the physician sits. The rules are not equally applied, and that’s an issue we continually face,” says Corbisier.

Yet another issue with teleradiology services providing final and subspecialty reads is the hospitals’ bylaws. Just as Medicare and Medicaid have not updated their rules, some hospitals have not updated their bylaws to allow for telemedicine. “The means and purposes of teleradiology have evolved greatly, and, as a result, hospitals are having to rewrite their bylaws to accept outside entities or credential certain physicians,” Corbisier says. At some hospitals, bylaws can limit the use of teleradiology, and in some cases, the hospitals have to reassess them based on their needs. Some hospitals may be reluctant to allow teleradiology services to provide final reads because “they are afraid of taking a significant service away from local radiologists in the hospital,” he says.

Still, Corbisier says, most hospitals are going to find that teleradiology companies do not replace local radiologists. Rather, he says, teleradiology serves as a valuable supplement to the local radiology staff. “I don’t foresee it ever replacing radiologists in the hospital,” he says. “In most cases, teleradiology, even [when] it provides final reads, is covering a shortage. It’s not covering a total lack of radiologists.”

Establishing Standards
The American College of Radiology (ACR) has established a set of teleradiology standards that mandate that physicians be licensed in both transmitting and receiving states, as well as be credentialed at each transmitting healthcare facility. To address the issue, some teleradiology firms have applied for accreditation from JCAHO; Epic Radiology is one of them. It recently received its three-year full accreditation from JCAHO and is currently awaiting its status for Global Accreditation based on JCAHO’s continual evaluation and clarification of Global Accreditation standards, Currier says. Virtual Radiologic is also fully accredited by JCAHO.

Some believe liability issues change when teleradiologists are providing final interpretations and subspecialty reads. Seidelmann says the problem is that, like the patients’ insurers, liability insurers don’t understand teleradiology. “Malpractice as it relates to teleradiology is just so complex to begin with because of the multistate entities,” he says. “You have to find a malpractice insurance company that is willing to insure across multiple states. That’s a huge issue.” Teleradiologists, Seidelmann says, have to be insured not only in the state where they are reading, but also in the state that provides the technical component. To help alleviate this issue, F&S has established its own captive insurance vehicle, Seidelmann says. The hope is to be self-insured within the next three to four years.

Because F&S is a dedicated subspecialty teleradiology provider, Seidelmann says it should have less risk for malpractice claims. F&S radiologists have received advanced modality training and dedicated their focus to a specific subspecialty area of radiology. “Those are really experts,” he says. “They have a significant degree of experience, and therefore, you would assume they have a higher degree of accuracy. With subspecialists, there is less room for errors in their interpretations.” In this case, Seidelmann says, it’s not so much a preliminary vs. a final read issue, but the value of the subspecialist reading the exams.

The ACR standards urge teleradiology physicians to consult with their professional liability carrier in order to ensure they have coverage at the sending and receiving sites. However, Currier does not believe liability is different with preliminary vs. final reads. “I really don’t think there is any greater risk for a teleradiologist who does a final vs. preliminary read,” he says. Corbisier agrees. The liability belongs to whoever signs the report, he says. It’s not an issue particular to final vs. preliminary teleradiology. “We carry medical liability and malpractice for all our physicians, just like any other practice. It has nothing to do with jurisdiction as far as liability. It is applicable to whoever signs the report and whoever provides the interpretation. We carry the same industry standard medical liability and medical malpractice insurance as anyone.”

The big question is whether the rules and bylaws regarding billing, liability, and credentialing will ever catch up to the growing reliance on teleradiology services. “That’s the big unknown at this point,” Corbisier says. “If the rules regarding reimbursements, liability, and credentialing are changed, or if they become more telemedicine-centric,” he says, “it will make it a lot easier for everyone, and ultimately make patient care better, because patients will have easier access to care. But we just don’t have the insight to know if and when it’s going to change.”

— Beth W. Orenstein is a freelance health writer and a regular contributor to Radiology Today. She writes from her home in Northampton, Pa.