CMS Pub. 100-04, ch. 13, § 150

Component (PC or Interpretation) and the Technical Component (TC)

of Diagnostic Tests

(Rev. 3315, Issued: 08-06-15, Effective: 01-01-16, Implementation: 01-04-16)

Many of the diagnostic services, including radiology services, provided by

physicians/practitioners contain both a technical component (TC) and a professional

component (PC). Often, the PC and TC of diagnostic services are furnished in different

settings. As a general policy, the POS code assigned by the physician/practitioner for the

PC of a diagnostic service shall be the setting in which the beneficiary received the TC

service.

A. Interpretation Provided Telephonically by Wireless Remote

Teleradiology services (radiology services that do not require a face-to-face encounter

with the patient furnished through the use of a telecommunications system) are discussed

in Pub. 100-02, Medicare Benefit Policy Manual, chapter 15, section 30. The

interpretation of an x-ray, electrocardiogram, electroencephalogram and tissue samples

are listed as examples of these services.

In cases where the face-to-face requirement is obviated such as those when a

physician/practitioner provides the PC/interpretation of a diagnostic test, from a distant

site, the POS code assigned by the physician /practitioner shall be the setting in which the

beneficiary received the TC service. The POS code for a teleradiology interpretation is

generally the place where the beneficiary received the TC, or face-to-face encounter. The

POS code representing the setting where the beneficiary received the TC is entered in the

ASC X12 837 professional claim format or in item 24B on the paper claim Form CMS

1500. In cases where it is unclear which POS code applies, the Medicare contractor can

provide guidance.

For example: A beneficiary receives an MRI on an outpatient hospital campus near

his/her home. The outpatient hospital submits a claim that would correspond to the TC

portion of the MRI. The physician furnishes the PC portion of the beneficiary’s MRI

from his/her office location - POS code 22 (On Campus-Outpatient Hospital) shall be

used on the physician’s claim to indicate that the beneficiary received the face-to-face

portion of the MRI, the TC, on the campus of an outpatient hospital.

B. Interpretation Provided Outside of the United States

Generally, Medicare will not pay for health care or supplies that are performed outside

the United States (U.S.). The term “outside the U.S.” means anywhere other than the 50

states of the U.S., the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam,

American Samoa, and the Northern Mariana Islands. See Pub. 100-02, chapter 16,

section 60, for exceptions to the “outside the U.S.” exclusions.

C. Interpretation Provided Under Arrangement - To A Hospital

Separate TC and PC

If a diagnostic test which has a separate TC and PC is provided under arrangement to a

hospital, the physician who reads the test can bill and be paid for the professional

component. Both the technical and professional components of the test are also subject

to the physician self-referral prohibition.

The appropriate POS code for the interpretation (or PC) is the setting where the

beneficiary received the TC service. If the interpretation is performed in the physician’s

office and the patient received the TC service in the provider-based outpatient hospital

setting, the physician assigns POS code 22, for On Campus-Outpatient Hospital, or POS

19, for Off Campus-Outpatient Hospital, on the claim for the interpretation or PC.

Global Service

When a physician performs a diagnostic test under arrangement to a hospital and the test

and the interpretation are not separately billable, the interpretation cannot be billed by the

physician. In this scenario, the hospital is the only entity that can bill for the diagnostic

test which encompasses the interpretation. There is no POS code for the interpretation

since a physician claim is not generated.

D. Global Billing

Billing globally for services that are split into PC and TC components is only possible

when the TC and the physician who provides the PC of the diagnostic service are

furnished by the same physician or supplier entity and the PC and TC components are

furnished within the same Medicare physician fee schedule payment locality. Merely

applying the same POS code to the PC as that of the TC (as described in “A” above) does

not permit global billing for any diagnostic procedure.

E. Determination of Payment Locality

Under the Medicare physician fee schedule (MPFS), payment amounts are based on the

relative resources required to provide services and vary among payment localities as

resource costs vary geographically as measured by the geographic practice cost indices

(GPCIs). The payment locality is determined based on the location where a specific

service code was furnished. For purposes of determining the appropriate payment

locality, CMS requires that the address, including the ZIP code for each service code be

included on the claim form in order to determine the appropriate payment locality. The

location in which the service code was furnished is entered on the ASC X12 837

professional claim format or in Item 32 on the paper claim Form CMS 1500.

Global Service Code

If the global diagnostic service code is billed, the biller (either the entity that took the test,

physician who interpreted the test, or separate billing agent) must report the address and

ZIP code of where the test was furnished on the bill for the global diagnostic service

code. In other words, when the global diagnostic service code is billed, for example,

chest x-ray as described by HCPCS code 71010 (no modifier TC and no modifier -26),

the locality is determined by the ZIP code applicable to the testing facility, i.e. where the

TC of the chest x-ray was furnished. The testing facility (or its billing agent) enters the

address and ZIP code of the setting/location where the test took place. This practice

location is entered using the ASC X12 837 professional claim format or in Item 32 on the

paper claim Form CMS 1500. As explained in D above, in order to bill for a global

diagnostic service code, the same physician or supplier entity must furnish both the TC

and the PC of the diagnostic service and the TC and PC must be furnished within the

same MPFS payment locality.

Separate Billing of Professional Interpretation

If the same physician or other supplier entity does not furnish both the TC and PC of the

diagnostic service, or if the same physician or other supplier entity furnishes both the TC

and PC but the professional interpretation was furnished in a different payment locality

from where the TC was furnished, the professional interpretation of a diagnostic test must

be separately billed with modifier -26 by the interpreting physician.

When the physician’s interpretation of a diagnostic test is billed separately from the

technical component, as identified by modifier -26, the interpreting physician (or his or

her billing agent) must report the address and ZIP code of the interpreting physician’s

location on the claim form. If the professional interpretation was furnished at an unusual

and infrequent location for example, a hotel, the locality of the professional interpretation

is determined based on the Medicare enrolled location where the interpreting physician

most commonly practices. The address and ZIP code of this practice location is entered

using the ASC X12 837 professional claim format or in Item 32 on the paper claim Form

CMS 1500.