Medicare Compliance & Reimbursement

If a screening is deemed medically unnecessary, Medicare will deny the claim.

If labs don't know when a test stops being a screen and becomes a diagnostic tool, they could be losing valuable reimbursement. Here's help.

"Screening tests are used when there's no reason to believe a particular medical condition exists," explains Jim Root, an independent lab consultant in Tucson, AZ. Screening tests are meant to identify problems that need medical attention in otherwise well patients.

The problem with screening tests is that Medicare won't pay for tests that have no medical necessity, says Pat Trela with PaTrela Consulting in Quincy, MA.

However, the Medicare Modernization Act opened the payment doors for several screenings, Trela notes. Labs will be reimbursed for these screenings: pap smear, cardiovascular, colon cancer, prostate and diabetes

Important: While Medicare will cover these tests, each contains its own requirements and limitations. Labs can access specific information on each test at www.medicare.gov.

"Diagnostic tests come in when there's a series of symptoms that suggest a condition may exist, but it needs to be defined," Root says. Diagnostic tests are highly specific and are meant to root out the reason for the condition.

"The trick is to use the right diagnosis code," points out Anne Pontius, president of Laboratory Compliance Consultants in Raleigh, NC. The CPT codes will identify the test, but the ICD-9 code will identify the test as diagnostic. And using the wrong ICD-9 code will earn a lab a denial.

Example: A doctor decides to screen a patient for diabetes during her annual physical. Because the patient has a family history of pancreatic cancer and thyroid disease, the physician tests for those as well.
 
Wrong: The lab bills all these as screening tests.

Right: The pancreatic cancer and thyroid disease tests are conducted because of (diagnostic) the patient's history. If the lab bills them as screening, Medicare will not pay.

Without proper documentation about why a doctor is ordering a particular test, a lab may not be able to justify billing it as diagnostic over screening, Root notes.

Try this: Labs could create a field on their test requests that asks docs to write down their rationales.