Pathology/Lab Coding Alert

It seems that labs aren't the only ones confused about consolidated billing: CMS issued incorrect Medicare claims-processing instructions to skilled nursing facilities (SNF) last year, the agency admits in an April 8 program memorandum (AB-02-043). The correction applies to all clinical diagnostic lab HCPCS Codes .

In a Nov. 30, 2001, program memo (A-01-135), CMS incorrectly indicated that clinical diagnostic lab tests for SNF residents could only be billed by the company that performed the tests.

But the truth is, lab tests fall under consolidated billing, CMS clarifies in the new memo. "SNFs must make arrangements under Part A and may make arrangements under Part B under which the SNF bills the intermediary and receives payment from the program and the SNF pays the lab" whatever they'd agreed to, the memo says. The beneficiary can't be charged by the lab at all.

However, such Part B arrangements are voluntary, and absent those, the lab, not the SNF, would bill Medicare directly for certain SNF resident and outpatient services. According to the corrected memo, "hospital labs and labs in other SNFs would bill the intermediary. Independent labs would bill the carrier."

Note: To read the April 8 memo, go to ww.hcfa.gov/pubforms/transmit/AB02043.pdf. To read the November 2001 memo, go to www.hcfa.gov/pubforms/transmit/A01135.pdf.