IDTF Ownership: Can Non-Radiologists Own an Imaging Center?
IDTF ownership is a frequent question for physicians, entrepreneurs and investors interested in outpatient imaging. An independent diagnostic testing facility, or IDTF, is a Medicare enrollment category for many freestanding imaging centers that operate independently of a hospital or physician practice. Whether a non-radiologist can own one, and how that ownership should be structured, depends on federal program rules, state law and the way the center will bill and receive referrals.
This guide gives a general overview of how ownership questions arise, why they matter to lenders and what to discuss with counsel. Ownership rules vary by state, referral laws are complex, and nothing here is legal, billing or compliance advice. Healthcare counsel and qualified compliance professionals should review any specific structure.
What Is an IDTF?
An IDTF is an entity, independent of a hospital or physician office, that performs diagnostic tests such as MRI, CT, ultrasound and other imaging. To enroll with Medicare as an IDTF, a facility generally must meet a set of performance standards that address areas such as:
- Supervising physicians with appropriate qualifications for the tests performed
- Qualified, credentialed technologists
- Equipment maintenance and calibration
- Liability insurance coverage
- Disclosure of owners and managing parties
- Answering patient questions and maintaining a physical location that meets program requirements
Imaging performed within a physician practice may be enrolled and billed differently, which is one reason the structure of an imaging business matters.
Can Non-Radiologists Own an Imaging Center?
In many cases, Medicare program rules for IDTFs focus on supervision, staffing and standards rather than requiring that the owner be a radiologist. Investors, other physicians or business owners may therefore be able to hold IDTF ownership interests in some circumstances. However, several other layers of law can affect whether a particular ownership arrangement is permissible:
- State corporate practice rules: some states restrict who may own entities that provide professional medical services or employ physicians
- State licensing: facility licensing and radiation equipment registration may impose their own requirements
- Referral laws: federal and state laws can limit arrangements in which physicians who own an imaging center refer patients to it
- Certificate of need: some states require approval to acquire certain imaging equipment or open a center
- Payer contracts: commercial insurers may have their own credentialing and ownership requirements
Because of these layers, the answer to who can own a specific center is a question for healthcare counsel, not a general rule.
Why Referring Physician Ownership Raises Questions
The most sensitive IDTF ownership issues often involve physicians who would refer patients to the center they own. Federal and state laws can restrict such arrangements, with exceptions and requirements that are technical and fact-specific. Ownership structures, distributions and lease or service arrangements may need to be designed carefully. Healthcare counsel should review any arrangement involving referral sources before investment.
Similar questions arise in hospital partnerships. Our article on the imaging center joint venture model explains how radiologist-hospital ventures are typically structured with counsel’s guidance.
The Role of the Supervising Physician
Even when a center is owned by non-radiologists, imaging services generally require physician supervision at levels that depend on the type of test. Owners usually arrange supervision and interpretation through employed radiologists, a radiology group under a professional services agreement or other contracted physicians. These relationships should be documented clearly and reviewed by counsel.
Why IDTF Ownership Matters to Lenders
Lenders financing an imaging center want to know that the business can legally operate, bill and receive payment. When reviewing a loan request, they may ask:
- Who owns the center, and in what percentages
- How the center is enrolled with Medicare and commercial insurers
- Whether any required certificate of need or state licenses are in place
- How supervising and interpreting physicians are engaged
- Whether counsel has reviewed the ownership structure
Our overview of imaging center loan requirements covers additional underwriting items.
Ownership Changes and Acquisitions
When an imaging center is sold or a new investor buys in, enrollment updates and ownership disclosures may be required. Enrollments, payer contracts, licenses and certificates should not be assumed to transfer automatically. Timing those updates is an important part of any acquisition plan. Our guide on how to buy an imaging center walks through the broader process, and our article on the MRI certificate of need explains how state approvals can affect a transaction.
Financing Considerations for Investor-Owned Centers
Financing options for an imaging center may include equipment financing, term loans and working capital lines. Conventional practice loans follow each lender’s own underwriting standards, and lenders may evaluate investor-owned centers differently from physician-owned practices. Some government-backed programs have specific eligibility rules about ownership and business type. Every loan is subject to approval, and nothing here is a commitment to lend.
Investors without imaging experience should expect lenders to look closely at the management team, the supervising physicians and the radiology group that will read studies.
Questions to Bring to Counsel
- Does my state restrict who may own this type of facility?
- Will any owners be in a position to refer patients to the center?
- How should supervision and interpretation be arranged?
- What enrollments, licenses and approvals are required, and in what order?
- How would future ownership changes be handled?
Final Thoughts
IDTF ownership is not limited to radiologists in every case, but whether a specific investor can own a specific center depends on state law, referral rules, supervision requirements and payer contracts. Working with healthcare counsel early, and documenting the structure clearly, can help owners and lenders move forward with confidence.
US Medical Funding helps radiologists, physician groups and investors finance imaging centers, acquisitions and equipment. Learn more about our full range of radiology practice financing options.
