Knowledge Base Article

Happy National Laboratory Week to all the laboratorians who work behind the scenes to assist in the diagnosis and treatment of patients. Laboratory science has come a long way since I entered the profession many years ago with a lot more instrumentation and ever evolving tests offerings, such as genetic molecular pathology testing. Thanks to all the dedicated laboratory professionals who play a valuable role in maintaining and improving our nation’s health.

From a Medicare reimbursement standpoint, it has been a tough year for hospital outpatient clinical laboratory services. The 2014 OPPS Final Rule finalized a proposal to package payment for clinical laboratory tests performed during the same encounter with other outpatient services. This means there is no additional separate payment for lab tests performed on Medicare patients in the following areas:

• Patients treated in the Emergency department
• Patients in Outpatient hospital clinics, such as a Wound Care clinic or Cancer clinic
• Patients receiving Observation services
• Patients during an outpatient surgery
• Patients having lab tests performed during the same encounter as any other outpatient services such as imaging studies

Medicare still pays separately for clinical laboratory tests in the following exceptions if the claims are billed correctly:

1. When a specimen is submitted for analysis to a hospital and the patient is not physically present at the hospital. These are commonly referred to as non-patient services, outreach lab services or reference lab tests.
2. When laboratory tests are the only hospital outpatient services that a patient receives during an outpatient encounter. For example, patients that are referred from a physician’s office/clinic to a hospital outpatient laboratory for laboratory testing only and no other outpatient services.
3. When laboratory tests are clinically unrelated to other outpatient services the patient receives during an outpatient encounter and the lab tests are ordered by a different practitioner than the one who ordered the other (non-lab) outpatient services.

And as if this were not confusing enough already, the rules for billing laboratory claims to receive separate payment are about to change again. Effective January 1, 2014, CMS instructed hospitals to bill laboratory claims in the above listed situations on a 14x type of bill. However, because of concerns from hospitals and the National Uniform Billing Committee (NUBC) that all of these situations do not conform to the NUBC definition of a 14x bill as a “non-patient” claim, CMS is modifying the billing instructions effective July 1, 2014 as explained in MLN Matters Article SE1412.

Effective for claims billed on or after July 1, 2014, CMS will create a new modifier (yet to be determined) to be used on the 013X TOB (instead of the 014X TOB) when non-referred lab tests are eligible for separate payment under the Clinical Laboratory Fee Schedule (CLFS) for exceptions (2) and (3) listed above. For claims with dates of service on or after January 1, 2014 that are billed to Medicare on or after July 1, 2014 the following billing instructions apply:

‍Hospitals should continue to bill all exceptions for separate payment for laboratory tests on a 14x TOB until July 1, 2014. It continues to be the hospital’s responsibility to determine when laboratory tests qualify to receive separate payment. Starting with claims received July 1, 2014, and after, when a hospital appends the new modifier to a laboratory service, the provider is attesting that exception (2) or (3) listed above is met. The requirement for all OPPS services to be submitted on a single 13x claim (other than recurring services) continues to apply. In addition, laboratory tests for molecular pathology tests described by CPT codes in the ranges of 81200 through 81383, 81400 through 81408, and 81479 are not packaged in the OPPS and do not require the new modifier.

MMP will provide more information, specifically the new modifier and any accompanying instructions, as it becomes available. Please refer to the MLN Matters Article reference above for more information, including some billing scenarios.