Time-shares one way to get more use from equipment

Contract Language. By Steven M. Harris, AMNews contributor. March 7, 2005.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

SEE ARCHIVES

Recently I was asked to review a proposed time-share leasing arrangement between a cardiology practice group and referring physicians for use of MRI and CT scanners.

The cardiology group owns and operates the scanners. This practice has been approached by several nonaffiliated physicians and practices to lease the equipment, facility, and personnel on certain days and times.

After completing a utilization analysis and reviewing all revenues and expenses related to the MRI and CT scans being provided to the group practice's patients, the cardiology practice then explored the viability of entering into time-share agreements.

This column will detail the anatomy of such a transaction and highlight key contract issues, including purchased services, billing, supervision requirements and regulatory issues.

It is important that you determine the purchased service limitations available to your practice. You must consider the implications of a per-click lease arrangement, in which you're paid per procedure, versus a time-share arrangement, in which you're paid based on the time used.

Pursuant to the Medicare Claims Processing Manual, if you are providing services to Medicare patients and assignment is accepted, a physician or practice group may submit a claim to receive Medicare Part B payment for the technical component of diagnostic services that the physician or group purchases from an independent physician, medical group or other supplier. In other words, your group would get paid for running the machine, but the physician group leasing the services would get paid for reading the results. You should note that this claim and payment procedure does not extend to clinical diagnostic laboratory tests.