Pathology/Lab Coding Alert

The Office of Inspector General (OIG) recently issued a report pointing out "widespread problems" with the Clinical Laboratory Improvement Amendments (CLIA) administered by CMS. According to the report, Enrollment and Certification Process in the CLIA Program (OEI-05-00-00251, August 2001), infractions include labs operating without a certificate, and certified labs providing tests they are not authorized to perform or conducting procedures without appropriate protocols to ensure accuracy. "In order to get paid for services provided, and to avoid OIG scrutiny, laboratories must ensure that they correctly perform and report only tests that fall within their certification levels," says Laurie Castillo, MA, CPC, CPC-H, CCS-P, member of the  National Advisory Board of the American Academy of Professional Coders and president of Physician Coding and Compliance Consulting in Virginia.
 
CLIA certificates fall into three main categories based on the complexity of testing conducted by the lab: high complexity, moderate complexity (which includes a sub-category of provider-performed microscopy, or PPM) and waived. The Food and Drug Administration categorizes all laboratory test methods into one of the certification categories based on test complexity. Laboratories can only perform tests at their approved complexity level or below. The test lists are updated frequently, and are available on the Internet at www.fda.gov/cdrh/clia/index.html.

Based on state surveys and random inspections in two states, the OIG estimates that about half of the waived and PPM laboratories may be noncompliant. The chief infractions of waived labs involved testing outside their certificate level and not having or not following manufacturers' instructions for tests performed. PPM labs were also out of compliance by testing outside their certificate level and lacking written procedures, but they also lacked quality-assurance protocols for test accuracy and staff competency.
 
"Based on OIG recommendations, which CMS fully concurs with, waived and PPM laboratories should expect further oversight from CMS, and improve compliance accordingly," Castillo says. Here are four changes labs can expect CMS to implement:
 

Requiring labs applying for waived and PPM certificates to identify which testing systems they will use.
 

Establishing a mechanism for Medicare carriers to inform CLIA oversight agencies (CMS regional offices or approved state agencies) about claims denials for labs billing outside of their certificate.
 

Conducting random onsite "surveys" (inspections) of some waived and PPM labs each year.
 

Using periodic paper self-assessment tools for waived and PPM laboratories.

 
"To stand up to increased scrutiny, PPM and waived-status labs need to ensure they are accurately conducting only appropriate tests and that they are coding them correctly," says Ken Wolfgang, MT (ASCP), CPC, CPC-H, director of coding and analysis for National Health Systems Inc. in Camp Hill, Pa., who serves on the National Advisory Board and the Executive Board of the American Academy of Professional Coders.
 
There are about 40 tests on the waived list, but because several manufacturers may produce their own testing system for each of these analyses, about 840 test systems can be used by CLIA-waived labs. "Since every waived test is not listed by brand name on the FDA list, it is up to the laboratories to ensure that the products and methods they are using meet their certification level. This is true whether the lab is using a purchased kit or reagents made in-house," Wolfgang says. A careful reading of the product literature should identify the test methodology and will often state if the test has CLIA-waived status. 
 
"Laboratories have to be careful because there are assays represented by multiple CPT codes depending on methodology, not all of which may have CLIA-waived status," Wolfgang says. For example, strep tests that identify the antigen directly from a throat swab can be conducted using different methods, such as 87880 (infectious agent detection by immunoassay with direct optical observation; Streptococcus, group A) or 87430 (infectious agent antigen detection by enzyme immuno-assay technique, qualitative or semiquantitative, multiple step method; Streptococcus, group A). The FDA lists about 15 manufacturers' test systems that are CLIA-waived and are described by 87880. However, strep tests described by 87430 are not CLIA-waived. 
 
There are also CPT codes that describe multiple manufacturers' test systems, some of which may have waived status while others do not. For example, 82947 (glucose; quantitative, blood [except reagent strip]) typically describes reagent-based blood glucose assays with an end point determined by instrumentation, such as the hexokinase method on an autoanalyzer. Most of these systems are approved for labs with a moderate complexity or higher license. However, the HemoCue B-Glucose Photometer, which is also described by 82947, is approved for waived-status labs.
 
"Waived-status laboratories have to remember to use the HCPCS modifier -QW (CLIA-waived test) when reporting lab tests to Medicare," Wolfgang says. Waived-status labs can only conduct waived tests and, except for a few codes, these must be reported with -QW for Medicare reimbursement. The exceptions are the tests from the original CLIA-waived list:
 

81002 urinalysis; non-automated, without microscopy
 

82270 blood, occult; feces, 1-3 simultaneous determinations
 

81025 urine pregnancy test, by visual color comparison methods
 

83026 hemoglobin; by copper sulfate method, non-automated   
 

82962 glucose, blood by glucose monitoring device(s)
 

85013 blood count; spun microhematocrit
 

84830 ovulation tests, by visual color comparison methods for human luteinizing hormone
 

85651 sedimentation rate, erythrocyte; non-automated.

Moderate- and High-Complexity Labs

Despite the fact that moderate- and high-complexity labs are surveyed by CLIA oversight agencies every two years, the OIG study also noted vulnerabilities in these settings. A surprising finding was that 30 to 40 percent of moderate- or high-complexity labs failed to have written protocols for PPM tests or to follow manufacturers' instructions for waived tests, which are not normally reviewed in the biennial CLIA survey. The OIG study also found that although not performing tests outside their certification level, many moderate- or high-complexity labs may be conducting tests outside their listed testing specialties and, as such, may not have appropriate oversight for those tests.
 
"CMS has stated that they agree with the OIG recommendations to enlarge the surveys of moderate- and high-complexity labs to include review of waived and PPM tests," Castillo says. CMS is changing its review policy to survey new laboratories about three months after the application process is complete, rather than permitting the lab to operate up to 24 months without oversight, as allowed by law.

Have Appropriate Certification for Tests

Congress passed CLIA in 1988 to establish "quality standards for all laboratory testing to ensure accuracy, reliability and timeliness of patient test results regardless of where the test was performed." Any laboratory conducting tests on human specimens for preventive care and diagnosis or treatment of disease must be certified. "This includes physician office labs, even if they only run a few routine tests such as dipstick urinalysis," Castillo says. Also, Medicare requires CLIA certification as a condition of payment. "A laboratory's CLIA certification number must be recorded on line 23 of HCFA form 1500 [CMS 1500] for all Medicare claims," Castillo says.
 
"Despite the fact that labs must have CLIA certification to be paid by Medicare, the OIG study indicates that many laboratories may not be certified," Castillo says. "Currently, CMS relies on laboratories to self-identify for enrollment in CLIA. But CMS has stated their intention to establish a workgroup to develop methods to identify uncertified laboratories."
 
More than 170,000 laboratories are registered under CLIA, with about 53 percent operating under a certificate of waiver. "The FDA has determined that tests approved for CLIA-waived labs have an insignificant risk of erroneous results because they are simple and accurate, or because they pose no risk of harm to the patient if performed incorrectly," Castillo says. "Waived-status labs are simply required to use only the listed tests and to follow manufacturer instructions. They are not routinely inspected as are labs with higher-complexity certification."
 
PPM-certified labs represent about 22 percent of all CLIA labs and can perform certain moderate-complexity microscopy procedures in addition to all waived tests. "PPM labs must have written procedures for tests, and a quality-assurance system to evaluate personnel and test- method accuracy," Castillo says. "However, PPM labs are not subject to periodic inspections."
 
Only about 25 percent of CLIA labs operate with a moderate- or high-complexity certification. "These labs are inspected within 24 months of initial registration and again every two years to verify compliance with CLIA standards," Castillo says. These and PPM labs must report their intended testing specialties selected from the CMS categories of histocompatibility, microbiology, diagnostic immunology, chemistry, hematology, immunohematology, pathology, radiobioassay and clinical cytogenics. The labs must notify CMS of any changes to their specialties in order to perform tests from another category.