Medicare Laboratory Demonstration Project

on Monday, 07 March 2011. All News Items

CMS is conducting a laboratory demonstration project that will allow laboratories to be paid for certain complex laboratory tests that would otherwise be bundled into the patient’s inpatient DRG payment under the current laboratory date of service rules. The demonstration payment is available to any laboratory (independent and hospital-based) beginning with services provided on and after July 1, 2011. The project runs for two years or until the demonstration dollar threshold is reached.

The types of laboratory tests included in the demo project are:

  • analysis of gene protein expression,
  • topographic genotyping, or
  • a cancer chemotherapy sensitivity assay.

The current laboratory date of service rules state that:

The test/service is bundled into the DRG if:

  1. the test/service is ordered by the patient’s physician less than 14 days following the date of the patient’s discharge from the hospital;
  2. the specimen was collected while the patient was undergoing a hospital surgical procedure;
  3. it would be medically inappropriate to have collected the sample other than during the hospital procedure for which the patient was admitted;
  4. the results of the test/service do not guide treatment provided during the hospital stay; and
  5. the test/service was reasonable and medically necessary for treatment of an illness”.

Note that these types of services are currently separately payable under Part B if ordered greater than 14 days following the patient’s discharge.

Information is available on the CMS webpage Laboratory Demonstration Project, including a link to sign up for the demonstration listserv. Also, specific HCPCS codes included in the demo project will be posted on this webpage. The HCPCS codes will be paid based on a “Section 3113 Demonstration Fee Schedule”.

Laboratories will indicate participation in the project by entering the demonstration project identifier 56:

  • In item 19 on the CMS-1500 form;
  • In locator 63 on the UB04 form;
  • On the electronic claim in X12 837 Professional Claim (HIPAA version) in Loop 2300, REF02, REF01+P4; and
  • On the X12 837 Institutional claim (HIPAA version) in Loop 2300, REF02, G1 in REF01 DE 128.

CMS states that “by submitting a claim with the Section 3113 Demonstration Project Identifier 56, the laboratory agrees to cooperate with the independent evaluation and the implementation contractors selected by CMS for purposes of this demonstration project. This may include providing data needed to assess the impact of the demonstration and participating in surveys and/or site visits as requested by these contractors.”

For more information about this demonstration project, see MLN Matters Article MM7278 and Transmittal 2144.

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