Pathology/Lab Coding Alert

Expect more 22 and 21, fewer 81 claims.

Independent labs got a reprieve from place-of-service (POS) billing changes that can impact your reimbursement -- but only until Oct 1.

Update: You read a complete description of the change in Pathology/Lab Coding Alert Vol. 13 No. 5, "81 is Out: Claim POS Based on Patient Location." Now this brief update brings you three pointers to make sure your lab is ready.

Tip 1: Revise Your References

With the implementation-date moving from April 1 to Oct. 1, CMS issued new instructions to accommodate the change.

You should throw out your copy of Transmittal 2407, which CMS rescinded, and replace it with the new Transmittal 2435. The new transmittal changes the implementation date, but "all other information remains the same," according to CMS. You'll also want to keep the new POS MLN Matters article in your file.

You can find the documents at www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads//R2435CP.pdf and www.cms.hhs.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM7631.pdf.

Tip 2: Expect Smooth Transition from 'Grandfather' Phase-Out

The original April 1 POS implementation deadline would have cut short the timeline for independent labs to phase out their technical component (TC) grandfather-exception billing. Labs that can bill Medicare for the TC of pathology services for hospital inpatients and outpatients under the grandfather exception had through June 30 to continue those arrangements.

"The POS reprieve gave us through June 30 to prepare a fee schedule for billing the TC to our grandfathered hospitals once we can no longer bill Medicare Part B for those services," says Stan Werner, MT (ASCP), administrative director of Peterson Laboratory Services PA in Manhattan, Kan.

Tip 3: Learn from POS Billing Examples

Starting Oct. 1, you'll need to adhere to the POS guidelines whether you're a lab billing services paid on the Clinical Laboratory Fee Schedule (CLFS) or a pathologist billing services paid on the Medicare Physician Fee Schedule (MPFS) -- either 26 (Professional component), TC (Technical component) or global.

The general rule will be that you should choose the POS code based on where the patient had the face-to-face service -- which probably won't be the physical location where the lab personnel or pathologist performs the work.

Even stronger: If the beneficiary is a hospital inpatient (POS 21, Inpatient hospital) or outpatient (POS 22, Outpatient hospital), you must use those codes regardless of where the patient face-to-face occurs.

Example 1: The hospital histology lab processes a partial colon resection from a hospital inpatient, and an independent pathologist interprets and reports on the slides at his lab across town.

Solution 1: The pathologist in this example should bill the service as 88307-26 (Level V -- Surgical pathology, gross and microscopic examination, Colon, segmental resection, professional component).

"Providers performing the professional component of interpretation of tests must use the POS where the face-to-face service was performed, such as outpatient facility, ASC [ambulatory surgical center], etc.," says Catherine Brink, BS, CMM, CPC, CMSCS, president of NJ-based Healthcare Resource Management.

That means that even though the pathologist performs the professional service at his independent lab, you should fill in POS 21 in box 24 B on CMS-1500, not 81 (Independent laboratory), because the beneficiary is a hospital inpatient. Line 32 should show the physical address of your independent lab.

Example 2: A patient presents to the physician's office with symptoms of Lyme disease. A blood specimen is drawn at the office and sent to your independent lab for testing. The lab performs a polymerase chain reaction (PCR) test to detect Borrelia burgdorferi.

Solution 2: The lab should code the service as 87476 (Infectious agent detection by nucleic acid (DNA or RNA); Borrelia burgdorferi, amplified probe technique). Rather than reporting POS based on where you run the test (81), you should report POS based on where the specimen was taken from the patient (11, Office).