Pathology/Lab Coding Alert

Last month we looked at how the outpatient prospective payment system will impact billing by independent laboratories for the technical component of outpatient services. This month we take a broader look at how OPPS impacts pathology coding and billing.

As of Aug. 1, 2000, the new outpatient prospective payment system (OPPS) set forth by the Health Care Financing Administration (HCFA) has taken the thousands of codes used for outpatient services and consolidated them into a smaller group of 451 ambulatory payment classifications (APCs). These new payment groups take into consideration many aspects of outpatient care, including medical supplies, staffing efficiencies and several other operational costs.

Exactly how is OPPS changing the face of coding, billing and reimbursement for pathologists and laboratories? That depends on what part of the business youre in, says Caral Edelberg, CPC, CCS-P, president of Medical Management Resources, an emergency medicine coding company based in Jacksonville, Fla., and nationwide speaker on the topic of APCs. At the broadest level, OPPS affects billing for pathology services to hospital outpatients in the following ways:

Although pathology services for outpatients are still reported using CPT Codes , the technical component is now reimbursed at the APC rate.

Billing for the professional component of these pathologist services does not change. It will continue to be billable separately to the local Medicare Part B carrier using CPT codes, payable under Medicares physician fee schedule.

Beginning Jan. 1, 2001, hospitals must bill for the technical component (TC) of these pathology services, to be paid by the Part A fiscal intermediary. This is true even if an independent laboratory performs the TC. In such cases, the hospital will reimburse the independent lab under arrangements, and the lab may no longer bill Part B directly.

Proposed legislation in Congress would permit existing arrangements (as of July 22, 1999) between independent labs and hospitals to be grandfathered. If the legislation is passed, independent labs could continue to bill Part B for pathology TC for hospital inpatients and outpatients.

OPPS does not impact billing for non-hospital (e.g., office) patients. Therefore, hospital-based independent labs and pathologists can continue to bill Medicare directly for the TC of services to these patients, even if purchased from the hospital.

Clinical diagnostic laboratory services remain payable to the hospital under Medicares clinical laboratory fee schedule. These services are not bundled into APC groups. Billing by independent laboratories that provide these services does not change; they continue to bill the hospital.

Certain hospitals are exempt from OPPS, such as Critical Access Hospitals, and [...]