Pathology/Lab Coding Alert

Medicare's 23 National Coverage Decisions (NCDs) for laboratory tests won't be fully implemented Nov. 25 after all. It's unclear what will happen to claims in the interim.

Because the claims processing software will not be ready by the target date, Medicare announced on June 26 (program memorandum AB-02-087) that enforcement of the NCDs for clinical diagnostic laboratory services will move to Jan. 1, 2003.

"That doesn't mean labs are off the hook for compliance with the NCDs come Nov. 25," cautions Stan Werner, MT (ASCP), administrative director of Peterson Clinical Laboratory in Manhattan, Kan. Although the memo absolves carriers and fiscal intermediaries (FIs) from processing the claims under the new rules on that date, it allows them to "go back and review claims submitted after the effective date for adherence to the new NCDs once the module is in place."

Even though carriers may be unable to process claims in time, they must have local medical review policies (LMRPs) consistent with the NCDs by Nov. 25, or at least have contradictory LMRPs eliminated. NCDs list specific payable ICD-9 codes for about 60 tests payable under the Clinical Diagnostic Fee Schedule.

To relieve individual carriers and FIs from developing complex edit software, Medicare contracted the development of a downloadable system module to enforce the new NCDs. But payers will handle claims differently while awaiting the module.

"Look to your carrier for specific claims processing instructions for clinical lab tests provided between Nov. 25 and Jan. 1, 2003," Werner says. At least one carrier will write its own system to permit claims payments based on NCDs during that time. The company decided it would take as much time and effort to adjust claims when CMS provided the new system as it would to write a system itself.

Established to "promote uniformity" in processing clinical diagnostic laboratory services, the NCDs are part of a larger negotiated rulemaking provision of the Balanced Budget Act of 1997. CMS published the final rule outlining the 23 NCDs and numerous administrative policies in the Nov. 23, 2001, Federal Register (available on the Internet at http://www.access.gpo.gov/su_docs/fedreg/a011123c.html under CMS). Most of the administrative changes were implemented in February and are not impacted by the recently announced delay.

Note: For a discussion of the 23 NCDs, see "Labs Must Prepare for National Medicare Coverage Policies" in Pathology/Lab Coding Alert, June 2002 page 44.