Continue to Bill Medicare for TC of Outpatient Services
Published on Fri Sep 01, 2000
Independent laboratories have a temporary reprieve. They can continue billing the technical component (TC) of physician pathology services for hospital outpatients to Part B Medicare carriers until Jan. 1, 2001, according to Health Care Financing Administration (HCFA) program memorandum AB-00-73 dated Aug. 11, 2000. Prior to issuing the memorandum, labs were scrambling to meet the Aug. 1, 2000 deadline, as part of the implementation of the outpatient prospective payment system (OPPS). The delay in the change of technical component reporting is retroactive to Aug. 1, 2000.
Its a big relief to us, reports Stan Werner, MT (ASCP), administrative director and corporate compliance officer of Peterson Clinical Laboratory in Manhattan, Kan. The change requires new systems for billing and reimbursement on the part of both laboratories and hospital, and many are just not ready, he continues. This news also gives us a temporary reprieve from our biggest concern the lower reimbursement rates for the TC services under the new ambulatory payment classifications (APC), especially at rural hospitals.
Background on New Billing Rules
Many pathology procedures represent both a technical and a professional service. The technical component of the service includes the equipment, supplies and technician labor involved in doing the procedure (e.g., preparing surgical or cytopathology slides). The professional component represents the physicians evaluation and interpretation.
Now independent laboratories providing the technical component of these services seek reimbursement directly through the Medicare Part B physician fee schedule.
But with the proposed rule published in the Federal Register, July 22, 1999, change was on the horizon for hospital inpatient billing. When the rule was finalized (Federal Register, Nov. 2, 1999), HCFA declared that it would end payments to independent laboratories under the physician fee schedule for technical component physician pathology services furnished to hospital inpatients. For these services, the independent laboratory would have to make arrangements with the hospital to receive payment. The effective date for this change is Jan. 1, 2001.
Then HCFA announced that the same restriction would be placed on hospital outpatient services for the technical component billing effective Aug. 1, 2000. HCFA explained its position in a communication with the College of American Pathologists (CAP) on June 16, 2000 (www.cap.org/html/Advocacy/capdocs/ppsemail.html).
The communication states, An independent laboratory will not be able to bill for the technical component of a pathology service under the outpatient PPS. The outpatient final rule requires that the hospital must provide directly, or under arrangements, all services furnished to hospital outpatients. This restriction was to take effect on the same date as OPPS Aug. 1, 2000. Largely through the efforts of CAP, [...]
