Regulatory Updates: Changes to Billing for Laboratory Services

It is the Ides of May (not quite as famous as the Ides of March), but a good time to think about changes to billing for laboratory services and what to expect in the CMS July 2014 OPPS update. It has been a topic of discussion since the beginning of the year, and continues to create questions given what we know will be coming this summer.

Before this year, clinical laboratory services were assigned a status indicator of A and paid based on the clinical laboratory fee schedule whenever they were present on a claim, even if there was a medical visit APC or a procedure APC also present on the claim. This changed with the January 2014 update to OPPS. CMS decided to package clinical laboratory, with two major exceptions. Meaning, if a lab service is billed with a medical visit APC or with a procedure APC on the claim, it will be packaged (not paid separately). The exceptions are:

  1. If the lab service was provided on the same day as a medical visit or a procedure, but was ordered by a different physician for a different purpose (meaning different diagnosis)
  2. If only lab services are present on the claim

Dealing with the first exception could be very difficult and would require a review of each claim. Most hospitals I have talked to have chosen not to address this exception at this time, but will perhaps look into it in the future.

The second exception is different and many hospitals have worked with their HIS or EMR vender to identify these claims and to make appropriate adjustments so they can be billed properly to receive payment.

During the first half of this year, proper billing for these claims meant that the type of bill (TOB) on the claim would need to be changed to a 14x. With this change, the status indicator for these lab services would be changed from an N (packaged) to an A (paid by fee schedule). With this change, hospitals could receive payment for lab only claims.

In July, that is changing. The July update states that hospitals will not need to bill these on a standard 13x bill type, not the 14x, and add a modifier to the HCPCS codes. This is a new modifier still to be defined by CMS, although there are rumors of what that modifier will be. To effectively manage this change, hospitals will need to again work with their HIS/EMR venders to automate this transition. Take particular note that the use of the modifier, based on the Medlearn Matters article it is built on when the claim is submitted (received by the MAC) and not from the date of the claim.

There is an OCE edit to consider. OCE edit 27 (Only incidental services reported) will surface if only incidental, translated packaged (meaning assigning a status indicator of N) are reported on a claim with a 13x bill type. This edit is a claim rejection. Currently, there is no way to bypass the edit. It is not clear what CMS is going to do with this. I can only speculate that they will need to make some adjustments to allow the billing of these claims with the new modifier. Time will tell what they actually do. I will address it in my quarterly call the last Thursday of June.

On another note: CMS has published the dates for the next HOP (Hospital Outpatient Payment) Panel meeting in the May 9, 2014 Federal Register. It is coming up the end of August. That means we should see the proposed 2015 OPPS rule sometime in July or early August of this year. Please keep your eyes open and take time to review and comment on this rule.

Thank you.

Dave Fee is the Outpatient Products Marketing Manager with 3M Health Information Systems.

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