Pathology/Lab Coding Alert

A proposed rule by the Health Care Financing Administration (HCFA) could have a significant impact on coding and reimbursement for clinical laboratory tests payable under Medicare Part B. The regulation would establish national coverage and administrative policies, thus curtailing the discretion of local Medicare contractors and promoting national uniformity in the coverage of clinical laboratory tests.

HCFAs proposal was published in the March 10 Federal Register, which is available at http://www.nara.gov/fedreg/index/html. The proposal clarifies processes for claims submission, coding, documentation and record keeping. If the final rule becomes effective without changes, approximately 60 percent of Part B laboratory claims would be subject to these regulations; it would affect 23 laboratory procedures. The national rule would replace any local medical review policy (LMRP) that varies from it.

The national coverage decisions could have an enormous impact on labs, claims Dennis Padget, CPA, FHFMA, president of Padget & Associates, a Simpsonville, Ky.-based pathology and laboratory financial consulting firm serving more than 150 clients in 25 states. It could be especially beneficial for labs that are currently subject to different local rules because they operate across state lines.

The rule-making committeewhich included representatives from HCFA and 18 other organizations whose interests may be affected by the ruleacted in response to a federal government mandate. Parties to the negotiation agreed not to submit negative comments on the proposed rule.

I believe the main accomplishment of the committee was the development of the national coverage policies for individual tests, says committee member Ira D. Godwin, MD, FASCP, president-elect of the American Society of Clinical Pathologists (ASCP) and vice-chairman of the board at American Medical Laboratories in Chantilly, Va. This means that everyone throughout the country will be subject to the same test policies. That should eliminate some of the confusion that currently exists in understanding whether or not a test may be covered under Medicare.

Stan Werner, MT (ASCP), administrative director and corporate compliance officer of Peterson Clinical Laboratory in Manhattan, Kansas, agrees. Currently, we operate under different coverage rules for the various states in our service area. Weve had some very confusing situations where weve received specimens from a patient in a neighboring state, and sent out a particular test to a lab in yet another state that is administered under a different set of rules.

I applaud the committee for the clarity of the structure and language of the proposed national-coverage policies, says Padget. By linking the ICD-9 and CPT codes, it should be clear when a test is covered by Medicare. This should minimize the confusion we currently have, where individual carriers are often of different opinion on coverage issues.

Of course, the requirement would continue to be that documentation must support any codes submitted. The proposed policy states that if the Medicare contractor finds insufficient documentation of medical necessity, it may request relevant parts of the patients record from the ordering physician. If this request were not answered, the Medicare carrier would inform the lab and deny the claim.

Comments on the proposed rule are being solicited until May 9, 2000. Changes arising from the regulation will become effective 12 months after publication of the final rule in the Federal Register. Further, a grace period of up to 12 months will be granted after the effective date to accommodate system changes that Medicare contractors may need to make.

There is clarification of some important issues in the proposed rule. Labs need to remark on the proposal while they can and start planning ahead to implement the changes, Werner points out.

Padget agrees. It would behoove those involved in coding and compliance for clinical laboratory testing to familiarize themselves with this proposed rule and take the opportunity to comment.