OIG Permits Hospital to Seek Pre-Authorization for Diagnostic Imaging Services

The OIG released Advisory Opinion 10-13 on August 31, 2010, concerning a proposed-arrangement where a hospital would be providing pre-authorization services for diagnostic imaging. Requestor, a non-profit hospital, provides diagnostic imaging services to patients. Because many commercial insurers have begun requiring pre-authorization prior to covering diagnostic imaging services, the hospital has proposed to provide free pre-authorization services for all patients. Under this proposed arrangement, when a patient comes to the hospital, if the patient’s imaging procedure requires pre-authorization, the hospital’s Pre-Access Department contacts the patient’s insurer, provides it with the necessary information, and obtains the pre-authorization. The patient is not charged for this service and it is provided to all patients and referring physicians without regard to the volume or value of referrals. No physicians are paid under this arrangement.

The OIG determined that the potential remuneration generated under this arrangement did not rise to the level of sanctioning the hospital for the following reasons. First, while this service may relieve a physician’s administrative duties of obtaining pre-authorization him/herself, the arrangement does “not target any particular referring physicians” and any relief of administrative duties would “occur by chance, not design.” Furthermore, this service is offered to all patients and physicians, without regard to referrals. Second, the hospital will “not make payments to physicians under the…[a]rrangement, and it has no ancillary agreements with referring physicians that would otherwise reward referrals” to the hospital. Third, the hospital’s Pre-Access Department is transparent with insurers and physicians. Finally, the hospital has a “legitimate business interest in offering uniform pre-authorization services” because it is the hospital’s payments that are at stake if pre-authorization is not obtained.

Thus, the OIG has determined that, under this particular proposed-arrangement, a hospital providing pre-authorization for imaging services for patients seeking diagnostic imaging procedures is permissible.

This opinion is the second opinion the OIG has released regarding pre-authorization for imaging services. On May 14, 2010, we blogged on the first opinion, Opinion 10-04, in which the OIG approved a proposed-arrangement where an imaging center would provide free pre-authorization services under a similar arrangement as was proposed in Opinion 10-13.

For more information, please contact Adrienne Dresevic, Esq. or Carey F. Kalmowitz, Esq. at (248) 996-8510 or (212) 734-0128, visit the Diagnostic Imaging Arrangements specialty page, or the HLP website.