Medicare Compliance & Reimbursement

Outsourcing to other countries raises HIPAA questions, economic concerns.

Now the growing outsourcing problem extends beyond overseas transcriptions. Committee on Energy and Commerce ranking member Rep. John D. Dingell (D-MI) is worried that hospitals are outsourcing their radiology readings to foreign countries, but still pocketing the full Medicare and Medicaid reimbursements, making a profit on the cheaper labor overseas.

Dingell is concerned that Medicare and Medicaid are unknowingly reimbursing claims for services provided overseas, according to his May 18 letter to Department of Health and Human Services Secretary Michael Leavitt. Many of his outsourcing concerns come from the growing trend of "ghosting," in which a foreign (licensed or non-U.S. licensed) radiologist performs a "preliminary" image interpretation and then a U.S. doctor reviews or approves the reading.

"This U.S. doctor then submits a bill for the radiological reading to Medicare or Medicaid, despite the fact that much of the work was done abroad," Dingell stated.

Dingell submitted three troubling factors surrounding this kind of outsourcing in his letter:
   If a provider outsources overseas, U.S. laws don't apply and the person reading the radiology images might be less qualified than a licensed American radiologist.
   If Medicare or Medicaid pays providers for the complete radiological interpreting services, the provider may use cheaper foreign labor to make a profit.
   Outsourcing medical testing services to foreign countries may violate Medicare law. Practice Affects Job Growth, Privacy Laws Dingell questioned whether Medicare or Medicaid allows reimbursement for outsourced medical services and whether either program allows providers to subcontract medical and administrative services to foreign countries. Dingell also challenged the Centers for Medicare and Medicaid Services' reimbursement of "ghosting"-related services. HHS should define CMS' role in outsourcing,
he said.

"Does CMS have any mechanism to ensure services provided in foreign countries meet Medicare and/or Medicaid program standards? Does CMS have the authority to audit claims to see whether services were provided by legitimate providers and, if so, does CMS audit these claims?" Dingell asked.

Another big concern regarding outsourcing is "how CMS ensures overseas facilities meet HIPAA privacy standards." Dingell pointed out. And, just like outsourcing work in any other industry, the practice cuts American job growth, he added.