Liberty Place, Suite 700
325 Seventh Street, NW
Washington, DC 20004-2802
(202) 638-1100 Phone

Tuesday, July 2nd 2002

Thomas Scully, Administrator
Centers for Medicare & Medicaid Services
200 Independence Avenue, SW, Room 443-G
Hubert H. Humphrey Building
Washington, DC 20201

Dear Tom:

On behalf of our nearly 5,000 member hospitals, health systems, networks, and other providers of care, the American Hospital Association (AHA) requests that the Centers for Medicare & Medicaid Services (CMS) provide further guidance on who can order diagnostic tests in a hospital setting.

We view this letter as part of the model practices initiative with CMS to identify acceptable practices for our members.  We would appreciate your response to the following:

Issue:  CMS has issued a transmittal (No. 1725, dated September 27, 2001) which includes a clarification to 42 CFR 410.32(a), that requires that all diagnostic tests be ordered by the treating practitioner.  Transmittal 1725 indicates that in the Carrier Manual, Section 15021, the treating physician/practitioner must order all diagnostic tests furnished to a beneficiary provided the beneficiary is not an institutional inpatient or outpatient.  (Emphasis added.)  It further states that a testing facility that furnishes a diagnostic test ordered by the treating physician/practitioner may not change the diagnostic test or perform an additional diagnostic test without a new order.  It is our understanding, therefore, that based on transmittal 1725, a radiologist, for instance, must go back to the referring physician to change an order or test, except when the patient is being treated as an inpatient or outpatient of a hospital.

Previously, hospitals were held to the standard that regardless of the patient setting, the physician treating the patient, or using the results of the tests ordered, must order diagnostic services.  There were limited exceptions to this standard, such as mammography.

Since the release of transmittal 1725, there have been numerous articles published that address this “clarification.”  This has resulted in much concern among hospitals as they respond to their physicians, particularly radiologists.  It has been indicated by Paul Kim at CMS that Section 15021 does not apply to the hospital setting and that, in the hospital world, the only restriction on radiologists ordering tests are state law, JCAHO requirements, and hospital bylaws.  A recent article by Thomas W. Greeson, an attorney in Falls Church, VA also indicates that “. . . Transmittal 1725 does not apply to hospitals.  In the absence of specific provisions for ordering tests, hospitals may be guided by Medicare’s conditions of participation for hospitals which state that ‘Radiologic services must be provided only on the order of practitioners with clinical privileges . . . authorized by the medical staff and the governing body to order the services.’  (42 CFR §482.26(b)(4))  Diagnostic radiologists are fully licensed physicians with medical staff appointment and clinical privileges at hospitals.  All radiological procedures ordered and performed by appropriately credentialed radiologists would be covered as inpatient and outpatient services when provided to a hospital patient and these procedures are performed in hospitals under the supervision of radiologists.”

Intermediaries, however, still contend that, with the exception of screening mammography, only the attending physician or the physician, who will use the test results to treat the patient, may order them.  Intermediaries maintain “if a radiologist orders a test, he or she must have records to show that he or she examined the patient and ordered the test on personal knowledge of the patient’s condition.”

AHA Recommendation:  CMS should issue clear instructions to the fiscal intermediaries that Transmittal 1725 supercedes 42 CFR 410.32.  That is, a radiologist need not go back to the referring physician to change or order tests for a hospital inpatient or outpatient.  This would align fiscal intermediaries policies with those of the carriers, eliminating the confusion and conflicts that hospitals face in dealing with their radiologists.  In addition, the AHA recommends that any future transmittals or memorandums that are issued to the carriers by CMS which in any way pertain to hospitals or hospital services, should be issued to the fiscal intermediaries so that they are aware of practice changes.

We look forward to your response.  Should you have any questions, please do not hesitate to contact Mary Beth Savary Taylor, AHA’s executive vice president for executive branch relations, at 202-626-2270.


Rick Pollack

cc:  Tom Grissom, Director, Center for Medicare Management
      Tom Barker, Provider Liaison
      Leslie Norwalk, Counselor to the Administrator


About AHA


Member Constituency Sections

Key Relationships

News Center

Performance Improvement

Advocacy Issues

Products & Services


Research & Trends


155 N. Wacker Dr.
Chicago, Illinois 60606

800 10th Street, N.W.
Two CityCenter, Suite 400
Washington, DC 20001-4956