Pathology/Lab Coding Alert

Molecular pathology exempt, in most cases.

You’ll find more and more lab and pathology services bundled into broader Ambulatory Payment Classifications (APCs) for hospital outpatients in 2016.

That’s because CMS continues to step up efforts to package “integral, ancillary, supportive, dependent, or adjunctive services into primary services,” rather than having APCs function as a fee schedule that pays each service individually.

Read on to see changes to how the 2016 OPPS bundles lab and pathology services this year, and how those revisions might impact your bottom line.

Expect More Pathology Exam Bundles

Last year, CMS conditionally packaged level 1 and 2 pathology services into APC 5671 and 5672 respectively. Now you can expect the bundling to extend to level 3 and 4 pathology services in 2016, as CMS creates two new APCs for those services (5673 and 5674).

Good news: The packaging is conditional on the pathology exam being performed the same date as a surgical procedure (“T-packaged”). The Q2 status indicator will alert payers that they should separately pay for the pathology exam if it is not performed in conjunction with a surgical procedure. CMS also stated in the OPPS final rule that it will not package expensive pathology services into APCs involving less expensive (surgical) procedures. 

Understand Clinical Lab Packaging, Too

Your lab has been dealing with packaging of lab tests into APCs for primary procedures since 2014 — in fact, that’s the main reason CMS lowers the OPPS payment rate by 2 percent this year.

Here’s why: CMS overestimated the impact of lab test packaging, with many more exceptions resulting in separate payments for tests. To account for the nearly $1 billion estimation error, CMS is reducing the 2016 OPPS conversion factor by 2.0 percent.

Bad news: CMS is stepping up clinical lab test bundling for the duration of the outpatient stay, rather than just packaging lab tests provided the same day as the primary procedure. That means the bundling is now effective per claim, rather than per day.

Good news: All molecular pathology tests are now exempt from the lab test bundling rule, even future tests that don’t currently have a code. Also, CMS will pay separately for preventive laboratory tests rather than bundling them into an APC for a primary service.

Modifier help: The OPPS final rule introduces a new conditional packaging status indicator — Q4 — for lab tests. Now, instead of needing to report modifier L1 (Unrelated lab) to get paid for stand-alone lab tests performed without another OPPS service, the status indicator will do the job.

Caution: “’Unrelated’ lab services provided on the day of another outpatient service but ordered by a different physician for a different diagnosis are still reported with the L1 modifier in order to receive separate payment,” advises Debbie Rubio, BS, MT (ASCP), manager of regulatory affairs and compliance for Medical Management Plus, Inc. in her 2016 OPPS analysis at www.mmplusinc.com.