Pathology/Lab Coding Alert

Laboratories have new Medicare direction that clarifies and simplifies a host of issues. Published as the "Final Rule for Coverage and Administrative Policies for Clinical Diagnostic Laboratory Services" in the Nov. 23, 2001, Federal Register, the directive establishes national policies and curtails the discretion of individual Medicare carriers while promoting uniformity for clinical lab tests.
 
The provisions of the rule, which clarify coding and claims submission requirements, should be fairly easy to implement and may improve reimbursement for laboratories, says Dennis Padget, CPA, FHFMA, president of Padget and Associates, a Kentucky-based pathology compliance consulting firm.
 
According to CMS administrator Tom Scully, "The Final Rule will make it easier for physicians to order lab tests they need to diagnose and treat their patients, and for labs to be reimbursed for the medically necessary services they provide." Most of the administrative requirements delineated in the rule are effective Feb. 21, 2002, while the new national coverage policies for 23 clinical laboratory tests will not go into effect until Nov. 25, 2002. The rule applies to all lab tests payable under Part B, regardless of setting (hospital, independent lab via physician office, or critical access hospital), ordered by a physician or qualified nonphysician practitioner.
 
The new, uniform coverage policies for tests such as urine cultures (e.g., 87086-87088) and blood counts (e.g., 85007-85048) will replace the current hodgepodge of local medical review policies (LMRPs) for the 23 laboratory tests outlined in the final rule. "Since, according to CMS, approximately 60 percent of laboratory claims will be subject to these regulations, the impact on laboratories could be enormous,"  Padget says.
 
The impact on a laboratory will depend on how much the new policies vary from the individual LMRPs now in place for that locality, according to Kenneth Wolfgang, MT (ASCP), CPC, CPC-H, member of the national advisory board of the American Academy of Professional Coders and director of coding and analysis for National Health Systems Inc., a coding consultation company in Camp Hill, Pa. "Having national coverage standards for these tests will be especially beneficial for labs that operate under the jurisdiction of more than one carrier and are subject to conflicting LMRPs."

"The most disappointing aspect of the final rule is that it does not mandate that the physician who orders the test furnish the requisite medical-necessity information," Padget says. "It leaves labs in the age-old bind, where the lab stands to suffer a Medicare claim denial if the ordering physician fails to supply adequate diagnostic information." The final rule codifies documentation and recordkeeping requirements to ensure that the ordering physician maintains documentation of medical necessity in the medical record, and that the laboratory maintains the documentation it receives from the ordering physician. However, the rule only "encourages physicians to voluntarily provide diagnostic information, and laboratories to submit that information with the claim."
 
"It is positive news that the final rule states that if the Medicare contractor finds insufficient documentation of medical necessity, carriers will request relevant parts of the patient's record from the ordering physician," Padget says. But in the final analysis, if this request is not answered, the Medicare carrier would inform the lab and deny the claim.

The final rule includes clarification for two enigmatic procedure coding issues. The first concerns the use of the word "screening." CPT does not necessarily use "screening" to refer to "a test performed in the absence of signs or symptoms of an illness, disease or condition," so carriers must not deny claims simply because the term appears in the code definition. The rule clarifies that Medicare covers a clinical lab test if it is used diagnostically even if the word "screening" appears in the descriptor. For example, 87081 (Culture, presumptive, pathogenic organisms, screening only) would be covered when used in the diagnosis of a bacterial infection.
 
The second procedure coding clarification involves the reporting of multiple codes that are not normally reported together for the same beneficiary on the same day. The final rule states that when such multiple services are medically necessary to diagnose or treat the beneficiary's condition, the lab must use modifier -59 (Distinct procedural service) or modifier -91 (Repeat clinical diagnostic laboratory test).
 
Although the original proposed rule only mentioned the use of modifier -59, the final rule allows for the use of modifier -91 when suitable. Modifier -91 should be used when the patient requires the same test repeated at different intervals during the day to obtain subsequent results, such as repeat blood gas measurements (82803, Gases, blood, any combination of pH, pCO2, pO2, CO2, HCO3 [including calculated 02 saturation]). Use modifier -59 for repeated tests or tests not normally performed together when they involve separate specimens. For example, multiple lesion samples collected from distinct anatomic sites for bacterial culture would be reported as 87070 (Culture, bacterial; any other source except urine, blood or stool, with isolation and presumptive identification of isolates) for the first culture, and 87070-59 for each subsequent one.

The final rule also clarifies appropriate assignment of ICD-9 codes. If the ordering physician supplies an ICD-9 code, the laboratory must use that code unless it obtains documentation from the physician to allow altering the code. If, however, the ordering physician supplies only a narrative diagnosis, the laboratory must translate the information into an appropriate ICD-9 code, and may do so even if the narrative does not exactly match the descriptor. 
 
For example, a physician may order a fecal occult blood test (82270, Blood, occult, by peroxidase activity [e.g., guaiac], qualitative; feces, 1-3 simultaneous determinations) but provide no ICD-9 code. If the order contained a statement such as "Patient complains of nausea, black- or red-tinged stool, and occasional vomiting," the coder would assign the correct diagnosis code based on the narrative. In this case, two codes would be reported: 792.1 (Nonspecific abnormal findings in stool contents, abnormal stool color) and 787.01 (Nausea with vomiting).
 
Medicare contractors are required to allow laboratories to submit up to eight diagnosis codes under the final rule, using the narrative field if necessary. Carriers will also have to examine all submitted codes for demonstration of medical necessity (even if they are not matched [ICD-9 to CPT]) by the lab. These measures should aid in  processing legitimate claims that are being denied. 

The final rule includes other instructions that may benefit labs in claiming reimbursement. For example, Medicare carriers can no longer deny a claim on the basis of frequency limits unless a national policy or LMRP states the frequency that is reasonable. Even then, the carrier must review any medical documentation to evaluate the necessity of the tests at the frequency ordered.
 
For example, many LMRPs limit the frequency of prothrombin time testing (85610, Prothrombin time) to once every four to six weeks for patients on stable warfarin therapy. Based on this rule, the carrier could not deny a claim for a prothrombin time test at two-week intervals without reviewing the medical documentation.
 
Similarly, there will be no automatic denials for "egregious utilization" of a test under the final rule. Carriers may automatically deny a claim without manual review only if a national coverage decision or LMRP specifies circumstances for denial, and those circumstances exist, or the service is excluded by statute.
 
Labs now have different standards for listing the date of service, but the final rule establishes that the date of service must be listed as the date of specimen collection. "Certain tests don't accommodate the date of collection very easily, such as sensitivity tests (87181-87190, Susceptibility studies, antimicrobial agent ) that may be run on culture isolates several days after the original specimen collection," Wolfgang says. Laboratories may require system adjustments to comply with the date of collection standard, so this element of the final rule does not go into effect until Nov. 25, 2002, and labs may apply for an additional grace period of up to 12 months beyond that implementation date.
 
"Consistent with past direction in the Medicare Carriers Manual, the final rule states that a physician signature is not required to document that a test has been ordered," Wolfgang says. Physicians may document ordering of tests in a medical record by signature on a requisition and by oral request, followed by written authorization within 30 days.